1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Continental Casualty Company, et al., No. CV-19-05163-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Platinum Training LLC, et al.,
13 Defendants. 14 15 Pending before the Court is Plaintiffs’ Motion to Transfer Related Case.1 16 (Doc. 117). The Claimant Defendants filed a Response in Opposition (Doc. 120)2, to 17 which Plaintiffs Continental Casualty Company and Valley Forge Insurance Company 18 (“Plaintiffs”) filed a Reply (Doc. 122). The Court will now issue its decision. 19 I. Background 20 On December 7, 2015, Defendants filed a Complaint that began Beecher, et al. v. 21 Biological Resource Center, Inc., et al., in Arizona Superior Court, Maricopa County, 22 Case No. CV2015-013391 (“Beecher”). (Doc. 120 at 1). Approximately four years later, 23 Continental provided a defense attorney for named defendant Mr. Stephen Gore, who 24 appeared in the case on August 22, 2019, two months before the Beecher trial began. (Id. 25 at 2). 26 On September 13, 2019, during trial preparations in the Beecher matter,
27 1 Both parties requested oral argument in this matter. The Court finds that the issues have been fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 28 78(b) (court may decide motions without oral hearings); LRCiv 7.2(f) (same). 2 The Court notes the Defendant’s Response was filed six days after the deadline. 1 Continental filed the Complaint for Declaratory Judgment that started this federal court 2 action (Doc. 1) (“present action”), seeking a declaration that Continental is not liable to 3 indemnify the judgment against Stephen Gore. (Id.) One month later, on October 28, 4 2019, the Beecher trial began. (Id.) On November 19, 2019, the Beecher jury rendered a 5 verdict for $58.5 million in favor of the defendants. (Id.) On April 15, 2021, Gore entered 6 into an Agreement and Covenant Not to Execute with Creditor Defendants. (Id.) The 7 following day, Plaintiffs filed a Motion for Partial Summary Judgment seeking a 8 declaration from this Court that Continental has no duty to indemnify the Beecher 9 judgments against Gore. (Doc. 106). That Motion was ultimately granted. (Doc. 119) 10 On July 16, 2021, Continental filed a new federal court action: Continental 11 Casualty Company, et al. v. Nancy Culver, et al., Case No. CV-21-01251-PHX-DLR (“the 12 Damron action”). (Id.) On July 29, 2021, Continental filed their Motion to Transfer 13 Related Case in which they seek to transfer or consolidate the Damron action with the 14 present action. (Doc. 120). 15 II. Local Rule of Civil Procedure 42.1(a) Transfer of Cases 16 Local Rule of Civil Procedure 42.1(a) provides five grounds upon which parties 17 may file a motion to transfer a case to a single judge. Transfer is proper if the actions “(1) 18 arise from substantially the same transaction or event; (2) involve substantially the same 19 parties or property; (3) involve the same patent, trademark, or copyright; (4) call for 20 determination of substantially the same questions of law; or (5) for any other reason [that] 21 would entail substantial duplication of labor if heard by different Judges.” LRCiv 42.1(a). 22 III. Analysis 23 1. Same Transaction or Event 24 Plaintiffs allege at the heart of both the present action and the Damron action is 25 whether they may be held liable for the judgment entered in Beecher against Stephen Gore 26 under its insurance policies. (Doc. 117 at 10). Defendants argue the events pertinent to 27 determining whether Stephen Gore is an insured in the present action, and whether Stephen 28 Gore has a right to sign an agreement to negate financial risk at issue in the Damron action 1 are different. (Doc. 120 at 3). The Court agrees with Defendants. 2 The transaction at issue in this case concerns Stephen Gore’s employment status, 3 his actions as an agent for certain companies, and the facts surrounding Gore’s sale of 4 various body parts to third parties for non-medical purposes. (Id.) The Damron action, 5 however, concerns separate transactions, such as Continental’s failure to provide a defense 6 for Stephen Gore for almost four years, the decisions Continental made to deny Stephen 7 Gore a defense and what informed those decisions, and Stephen Gore’s desire to protect 8 himself against financial ruin. (Id.) The Court finds that although the same parties appear 9 in both actions and concern issues arising from Gore’s misconduct, the issues presented 10 arise from different transactions, and do not support transfer to this Court for consolidation 11 with the present action. 12 2. Same Parties or Property 13 Plaintiffs argue the only interested parties in this action and in Damron are the 14 Claimant Defendants and Continental. (Doc. 117 at 10). Defendants concede this action 15 involves substantially the same parties but argue litigants who regularly appear in court 16 often cross swords with the same parties and do so without expecting the same judge every 17 time. (Doc. 120 at 4). 18 The Court notes the claim regarding the Claimant Defendants has been adjudicated 19 (Doc. 119) and thus the only remaining party in the present action involves a single 20 individual—Stephen Gore. It includes none of the other parties involved in Damron. Thus, 21 even though Continental is involved in both suits, the Court finds this ground insufficient 22 to justify transfer. 23 3. Patent, Trademark, or Copyright 24 This ground is irrelevant since this case does not involve a patent, trademark, or 25 copyright issue. 26 4. Determination of Substantially the Same Questions of Law 27 Plaintiffs argue this action and the Damron action both involve substantially similar 28 insurance coverage questions, such as whether the insurance policies provide coverage for 1 the judgement in Beecher and whether Continental has a duty to indemnify against that 2 judgment. (Doc. 117 at 11). Defendants argue Continental attempts to shoehorn “the same 3 insurance policies” into this ground. (Doc. 120 at 4). The Court agrees with Defendants 4 and finds the issues are not substantially similar. 5 The present action concerns questions of law regarding Continental’s insurance 6 coverage, who qualifies as an insured under the policy, and contract interpretation. The 7 Damron action, however, concerns different questions of law such as Continental’s bad 8 faith, their failure to defend Stephen Gore for almost four years, their failure to pay, their 9 intentional exposure of Stephen Gore to an excess judgment, and whether Stephen Gore 10 has a right to protect himself against financial ruin by signing a Damron agreement. The 11 Court finds these actions contain different questions of law and therefore finds this ground 12 insufficient to justify transfer. 13 5. “Substantial Duplication of Labor” 14 Plaintiffs argue this action over insurance coverage and the duty to indemnify 15 against the judgment in Beecher—and the Damron action over Continental’s indemnity 16 obligations, if any, for the excess judgment in Beecher—are two sides of the same coin. 17 (Doc. 117 at 12). Defendant argues the discovery in the present action has been completed. 18 (Doc. 120 at 4). Defendant further contends discovery in the Damron action will reveal 19 who decided to deny Stephen Gore coverage, the reasons why, and the sudden reason to 20 provide him a defense after almost a four-year lapse. (Id.) 21 Plaintiffs’ citation to Garcia v. Army where the Court granted a motion to transfer 22 because the judge “ha[d] developed familiarity with the issues involved in the case” is 23 misplaced. 2015 WL 5646640, at *2 (D. Ariz. Sept. 25, 2015) (Doc. 122 at 7)).
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Continental Casualty Company, et al., No. CV-19-05163-PHX-DJH
10 Plaintiffs, ORDER
11 v.
12 Platinum Training LLC, et al.,
13 Defendants. 14 15 Pending before the Court is Plaintiffs’ Motion to Transfer Related Case.1 16 (Doc. 117). The Claimant Defendants filed a Response in Opposition (Doc. 120)2, to 17 which Plaintiffs Continental Casualty Company and Valley Forge Insurance Company 18 (“Plaintiffs”) filed a Reply (Doc. 122). The Court will now issue its decision. 19 I. Background 20 On December 7, 2015, Defendants filed a Complaint that began Beecher, et al. v. 21 Biological Resource Center, Inc., et al., in Arizona Superior Court, Maricopa County, 22 Case No. CV2015-013391 (“Beecher”). (Doc. 120 at 1). Approximately four years later, 23 Continental provided a defense attorney for named defendant Mr. Stephen Gore, who 24 appeared in the case on August 22, 2019, two months before the Beecher trial began. (Id. 25 at 2). 26 On September 13, 2019, during trial preparations in the Beecher matter,
27 1 Both parties requested oral argument in this matter. The Court finds that the issues have been fully briefed and oral argument will not aid the Court’s decision. See Fed. R. Civ. P. 28 78(b) (court may decide motions without oral hearings); LRCiv 7.2(f) (same). 2 The Court notes the Defendant’s Response was filed six days after the deadline. 1 Continental filed the Complaint for Declaratory Judgment that started this federal court 2 action (Doc. 1) (“present action”), seeking a declaration that Continental is not liable to 3 indemnify the judgment against Stephen Gore. (Id.) One month later, on October 28, 4 2019, the Beecher trial began. (Id.) On November 19, 2019, the Beecher jury rendered a 5 verdict for $58.5 million in favor of the defendants. (Id.) On April 15, 2021, Gore entered 6 into an Agreement and Covenant Not to Execute with Creditor Defendants. (Id.) The 7 following day, Plaintiffs filed a Motion for Partial Summary Judgment seeking a 8 declaration from this Court that Continental has no duty to indemnify the Beecher 9 judgments against Gore. (Doc. 106). That Motion was ultimately granted. (Doc. 119) 10 On July 16, 2021, Continental filed a new federal court action: Continental 11 Casualty Company, et al. v. Nancy Culver, et al., Case No. CV-21-01251-PHX-DLR (“the 12 Damron action”). (Id.) On July 29, 2021, Continental filed their Motion to Transfer 13 Related Case in which they seek to transfer or consolidate the Damron action with the 14 present action. (Doc. 120). 15 II. Local Rule of Civil Procedure 42.1(a) Transfer of Cases 16 Local Rule of Civil Procedure 42.1(a) provides five grounds upon which parties 17 may file a motion to transfer a case to a single judge. Transfer is proper if the actions “(1) 18 arise from substantially the same transaction or event; (2) involve substantially the same 19 parties or property; (3) involve the same patent, trademark, or copyright; (4) call for 20 determination of substantially the same questions of law; or (5) for any other reason [that] 21 would entail substantial duplication of labor if heard by different Judges.” LRCiv 42.1(a). 22 III. Analysis 23 1. Same Transaction or Event 24 Plaintiffs allege at the heart of both the present action and the Damron action is 25 whether they may be held liable for the judgment entered in Beecher against Stephen Gore 26 under its insurance policies. (Doc. 117 at 10). Defendants argue the events pertinent to 27 determining whether Stephen Gore is an insured in the present action, and whether Stephen 28 Gore has a right to sign an agreement to negate financial risk at issue in the Damron action 1 are different. (Doc. 120 at 3). The Court agrees with Defendants. 2 The transaction at issue in this case concerns Stephen Gore’s employment status, 3 his actions as an agent for certain companies, and the facts surrounding Gore’s sale of 4 various body parts to third parties for non-medical purposes. (Id.) The Damron action, 5 however, concerns separate transactions, such as Continental’s failure to provide a defense 6 for Stephen Gore for almost four years, the decisions Continental made to deny Stephen 7 Gore a defense and what informed those decisions, and Stephen Gore’s desire to protect 8 himself against financial ruin. (Id.) The Court finds that although the same parties appear 9 in both actions and concern issues arising from Gore’s misconduct, the issues presented 10 arise from different transactions, and do not support transfer to this Court for consolidation 11 with the present action. 12 2. Same Parties or Property 13 Plaintiffs argue the only interested parties in this action and in Damron are the 14 Claimant Defendants and Continental. (Doc. 117 at 10). Defendants concede this action 15 involves substantially the same parties but argue litigants who regularly appear in court 16 often cross swords with the same parties and do so without expecting the same judge every 17 time. (Doc. 120 at 4). 18 The Court notes the claim regarding the Claimant Defendants has been adjudicated 19 (Doc. 119) and thus the only remaining party in the present action involves a single 20 individual—Stephen Gore. It includes none of the other parties involved in Damron. Thus, 21 even though Continental is involved in both suits, the Court finds this ground insufficient 22 to justify transfer. 23 3. Patent, Trademark, or Copyright 24 This ground is irrelevant since this case does not involve a patent, trademark, or 25 copyright issue. 26 4. Determination of Substantially the Same Questions of Law 27 Plaintiffs argue this action and the Damron action both involve substantially similar 28 insurance coverage questions, such as whether the insurance policies provide coverage for 1 the judgement in Beecher and whether Continental has a duty to indemnify against that 2 judgment. (Doc. 117 at 11). Defendants argue Continental attempts to shoehorn “the same 3 insurance policies” into this ground. (Doc. 120 at 4). The Court agrees with Defendants 4 and finds the issues are not substantially similar. 5 The present action concerns questions of law regarding Continental’s insurance 6 coverage, who qualifies as an insured under the policy, and contract interpretation. The 7 Damron action, however, concerns different questions of law such as Continental’s bad 8 faith, their failure to defend Stephen Gore for almost four years, their failure to pay, their 9 intentional exposure of Stephen Gore to an excess judgment, and whether Stephen Gore 10 has a right to protect himself against financial ruin by signing a Damron agreement. The 11 Court finds these actions contain different questions of law and therefore finds this ground 12 insufficient to justify transfer. 13 5. “Substantial Duplication of Labor” 14 Plaintiffs argue this action over insurance coverage and the duty to indemnify 15 against the judgment in Beecher—and the Damron action over Continental’s indemnity 16 obligations, if any, for the excess judgment in Beecher—are two sides of the same coin. 17 (Doc. 117 at 12). Defendant argues the discovery in the present action has been completed. 18 (Doc. 120 at 4). Defendant further contends discovery in the Damron action will reveal 19 who decided to deny Stephen Gore coverage, the reasons why, and the sudden reason to 20 provide him a defense after almost a four-year lapse. (Id.) 21 Plaintiffs’ citation to Garcia v. Army where the Court granted a motion to transfer 22 because the judge “ha[d] developed familiarity with the issues involved in the case” is 23 misplaced. 2015 WL 5646640, at *2 (D. Ariz. Sept. 25, 2015) (Doc. 122 at 7)). The 24 Court’s decision to transfer rested on its conclusion that the case was reasonably viewed as 25 plaintiff’s lead or principal case. (Id.) This is not the case here. The present case concerns 26 one individual: Mr. Gore. The Damron action concerns the ten prevailing claimants in 27 Beecher. The labor necessary for that case is distinct and not duplicative. Moreover, 28 discovery in this action ended on September 25, 2020, whereas discovery in the Darmon 1 || action just began and will address new issues. (Doc. 37 at 4). The Court therefore finds 2|| Continental’s argument that transferring this case somehow prevents “substantial 3 || duplication of labor” insufficient to sustain this ground for transfer. 4) Ir. Conclusion 5 For these reasons, the Court finds Continental failed to establish this case should be 6|| transferred, and therefore the Court will deny Plaintiffs’ Motion to Transfer Related Case. 7 Accordingly, 8 IT IS HEREBY ORDERED that Plaintiffs’ Motion to Transfer Related Case 9|| (Doc. 117) is denied. 10 Dated this 4th day of October, 2021. 11 12 fe □□ 13 norable' Diang4. Huretewa 14 United States District Fudge 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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