Maxum Indemnity Company v. Fun Zone Entertainment, LLC

District Court, M.D. Florida·Decided March 25, 2020·No. 3:18-cv-00477·Unknown

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

MAXUM INDEMNITY COMPANY,

Plaintiff, Case No. 3:18-cv-477-J-34PDB v.

CHARLES SHAW and TERRANCE JONES,

Defendants.1 /

ORDER THIS CAUSE is before the Court on the Report and Recommendation (Doc. 105; Report) entered by the Honorable Patricia D. Barksdale, United States Magistrate Judge, on February 5, 2020. Judge Barksdale recommends that Defendants Terrance Jones and Charles Shaw’s Third Amended Motion for Relief (Doc. 95; Motion) be granted in part and denied in part, and that the Court order Plaintiff Maxum Indemnity Company to show cause why this insurance coverage dispute should not be dismissed without prejudice or stayed pending the outcome of the underlying litigation in state court. See Report at 53- 54. Jones and Shaw filed their objections to the Report on February 26, 2020, see Jones and Shaw’s Objections to the Report and Recommendation of the Magistrate (Doc. 112; Jones and Shaw’s Objections), and Maxum filed its objections to the Report on February 27, 2020, see Maxum’s Objections to the Magistrate’s Report and Recommendation (Doc. 113; Maxum’s Objections). Maxum responded to Jones and Shaw’s Objections on March 11, 2020. See Maxum’s Response to the Defendants’ Objections to the Magistrate’s

1 The parties are directed to utilize this corrected case style in future filings. Report and Recommendation (Doc. 118; Response to Objections). Accordingly, this matter is ripe for review. Because the Court finds that both Jones and Shaw’s Objections and Maxum’s Objections are due to be overruled and the Report is due to be adopted as the Court’s opinion, the Court will not repeat the lengthy factual background or the arguments and

authority addressed there. Instead, the Court writes briefly to address the specific objections that warrant discussion and reiterates only the facts necessary to put those objections in context.2 I. Background This insurance coverage dispute arises out of negligence lawsuits filed in state court by Jones and Shaw regarding a July 2017 shooting at an internet cafe in Lake City, Florida. See Shaw v. Fun Zone Palace, LLC, etc., Case No. 17-314-CA (Fla. 3d Cir., Columbia County); Jones v. Fun Zone Palace, LLC, etc., Case No. 17-315-CA (Fla. 3d Cir., Columbia County) (the State Court Actions). Maxum initiated the instant action for declaratory

judgment on April 11, 2018, seeking a declaration that it is not obligated to defend or indemnify Fun Zone Entertainment, LLC (the alleged owner of the cafe and the named insured), Bernard McNeal (the alleged operations manager of the cafe), or Ching Ping Coleman and Allen Coleman (the alleged owners of the property used for the cafe). See Complaint for Declaratory Relief and Damages (Doc. 1; Complaint).

2 As the Magistrate Judge states in the Report, the factual background leading up to the Motion “is long and includes various subjects: the happenings in the state actions, procedural irregularities in this action, a mystery about Fun Zone’s membership and the attendant issue of diversity jurisdiction in this action, and accusations of misconduct in all of the actions.” Report at 3. Because the Report sets out a detailed background explaining all of these events, see Report at 3-18, the Court need not do so again here. The instant Motion stems from three stipulations entered into by Maxum and the defendants in this case: a stipulation of Maxum and the Colemans; a stipulation of Maxum and McNeal; and a stipulation of Maxum, Jones, and Shaw. See Joint Stipulations of Dropping Defendants Based on Stipulation of No Coverage (Docs. 34, 39, 40). In each stipulation, Maxum requests that a particular defendant or defendants be dismissed from

the case based on each defendant’s stipulation that Maxum’s policy provides no insurance coverage applicable to the State Court Actions or the incident prompting those suits. At the time of the stipulation involving Jones and Shaw, these Defendants were represented by Farah & Farah. On August 23, 2018, the Court dismissed Maxum’s claims against the Colemans based on their stipulation. See Order of Dismissal (Doc. 36). One month later, on September 28, 2018, Farah & Farah moved to withdraw as counsel for Jones and Shaw. See Motion to Withdraw as Counsel for Charles Shaw and Terrance Jones (Doc. 45; Motion to Withdraw). Referencing the Jones and Shaw stipulation, counsel asked the

Court to “refrain from entering any orders prejudicial to [Jones or Shaw] until they have been afforded an opportunity to retain new counsel or make their positions known regarding this issue.” Id. at 2. At a telephonic status conference held on October 10, 2018, to address the Motion to Withdraw, the Court dismissed Fun Zone based on Maxum’s filing of a notice of voluntary dismissal,3 dismissed McNeal based on the stipulation of Maxum and McNeal, and permitted Farah & Farah to withdraw as counsel

3 Maxum dismissed its claims against Fun Zone on September 24, 2018, after unsuccessful attempts to establish the citizenship of Fun Zone’s members for purposes of diversity jurisdiction. See Notice of Voluntary Dismissal (Doc. 44). for Jones and Shaw. See Minute Entry (Doc. 48); Order (Doc. 49); Hearing Transcripts (Doc. 80) at 22-23. On October 17 and 19, 2018, the law firm of Gary, Williams, Parenti, Watson, & Gary, P.L.L.C filed notices of appearance on behalf of Jones and Shaw. See Notices of Appearance (Docs. 50-55). Through their new counsel, Jones and Shaw then filed a

motion asking the Court to “vacate” the following filings pursuant to Rule 60, Federal Rules of Civil Procedure (Rule(s)): the stipulation of Maxum and the Colemans and the corresponding order dismissing the claims against the Colemans; the stipulation of Maxum and McNeal and the corresponding order dismissing the claims against McNeal; and the stipulation of Maxum, Jones and Shaw. See Defendants, Charles Shaw and Terrance Jones’, [sic] Motion for Relief Under Fed. R. Civ. P. 60(b)(3) and (6) (Doc. 56). An amended motion, a second amended motion, and the instant third amended motion followed. See Defendants, Charles Shaw and Terrance Jones’, [sic] Amended Motion for Relief Under Fed. R. Civ. P. 60(b)(3) and (6) (Doc. 57); Defendants, Charles Shaw and

Terrance Jones’, [sic] Second Amended Motion for Relief Under Fed. R. Civ. P. 60(b)(3) and (6) (Doc. 58). Maxum responded to the Motion on August 28, 2019. See Maxum’s Response in Opposition to Charles Shaw’s and Terrance Jones’s Third Amended Motion for Relief from “Judgments” or Alternative Motion to Vacate Joint Stipulations (Doc. 101; Response to Motion). In the Report, Judge Barksdale recommends: (1) denying in part Jones and Shaw’s third amended motion for relief, Doc. 95, to the extent they seek vacatur of the stipulation of Maxum and the Colemans, the stipulation of Maxum and McNeal, and the resulting orders dismissing the claims against the Colemans and McNeal; (2) granting in part Jones and Shaw’s third amended motion for relief, Doc. 95, to the extent they ask this Court to decline to enforce the stipulation of Maxum, Jones, and Shaw, Doc.

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