Stratford Insurance Company v. Shorewood Forest Utilities Inc

CourtDistrict Court, N.D. Indiana
DecidedFebruary 23, 2024
Docket2:20-cv-00372
StatusUnknown

This text of Stratford Insurance Company v. Shorewood Forest Utilities Inc (Stratford Insurance Company v. Shorewood Forest Utilities Inc) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stratford Insurance Company v. Shorewood Forest Utilities Inc, (N.D. Ind. 2024).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA HAMMOND DIVISION STRATFORD INSURANCE COMPANY, ) ) Plaintiff, ) ) v. ) NO. 2:20CV372-PPS/JEM ) SHOREWOOD FOREST UTILITIES, INC., ) GREG SCHAFER, and CARLOTTA ) HOLMES, Individually and on Behalf of ) All Others Similarly Situated, ) ) Defendants. ) ) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ) ) GREG SCHAFER and CARLOTTA ) HOLMES, Personally and As Agents and ) Assignees of Shorewood Forest Utilities, ) Inc., ) ) Counterclaim Plaintiffs, ) ) v. ) ) STRATFORD INSURANCE COMPANY, ) ) Counterclaim Defendant. ) OPINION AND ORDER This case is part of protracted and complicated litigation filed in both state and federal courts all stemming from a proposed expansion of a sanitary sewer system in the Shorewood Forest Subdivision near Valparaiso, Indiana. The expansion plan was initially supported by board members who were subsequently replaced by different board members. The new board included defendants (and counter -plaintiffs) Greg Schafer and Carlotta Holmes, who did not support the expansion. This slice of the litigation arises from Stratford Insurance’s issuance of a “Directors, Officers, Insured Entity and Employment Practices Insurance Policy” to Shorewood Forest Utilities, Inc.

[DE 1 at ¶15.] Stratford seeks a declaratory judgment that it is not responsible for a $5 million consent judgment that was entered against Shorewood in a state court action that was related to the failed expansion plan. [DE 1 at 36-37.] The counterclaim brought by Holmes and Schafer seeks damages for Stratford’s alleged breach of its duty of good faith and fair dealing. [DE 15.]

This case has been pending for almost 3 ½ years, and Magistrate Judge Martin has expended great time and energy on countless discovery disputes, holding multiple telephonic conferences and issuing a number of orders. (See, e.g., DE 74, 84, 143, 144, 150, 162, 163, 180.) For over a year, defendants Shorewood, Schafer and Holmes have repeatedly found different ways to dispute and challenge Judge Martin’s orders

regarding privilege, party discovery, and non-party discovery (including filing a barrage of motions to compel and motions to expedite rulings). Defendants are attempting to re-litigate many of the same discovery disputes over and over. This is entirely inappropriate and, frankly, not particularly effective advocacy. On May 1, 2023, Judge Martin denied two motions to compel filed by Shorewood

and Schafer/Holmes on discovery sought from Stratford. [DE 143 denying DE 86 and 91]. Also on May 1, Judge Martin granted motions to quash filed by attorneys David Jensen, counsel for the former Shorewood board, and Larry Evans, counsel for Rex 2 Properties (with whom the former board contracted about the proposed expansion), and denied yet another motion to compel by Schafer and Holmes. [DE 144 granting DE 94 and 120 and denying DE 107.]

Thereafter, Judge Martin assessed attorneys’ fees against Schafer, Holmes and Shorewood pursuant to Fed.R.C.iv.P. 37(a)(5)(A) and (B), which require the court, after ruling on certain discovery motions, to assess against the losing party the opponent’s reasonable expenses, unless the losing party’s position was substantially justified or other circumstances make an award of expenses unjust. Attorney fees of $47,711 were

awarded to Stratford against Schafer, Holmes and Shorewood for Stratford’s defense against their motion to compel denied in DE 143. [DE 163.] Related to Judge Martin’s ruling in DE 144, he granted against Schafer and Holmes $6,118.00 to attorney Jensen, $20,337.50 to attorney Evans, and $34,661.50 to Stratford. [DE 162.] Now before me is an appeal of those rulings by Schafer, Holmes and Shorewood in their joint Motion to

Vacate Magistrate’s Order for Sanctions. [DE 164.] Schafer and Holmes have also filed a “Motion to District Judge for Order Enforcing Pending Court Discovery Order” [DE 172], seeking an order to “enforce” Magistrate Judge Martin’s discovery order dated September 2, 2022 [DE 84]. The last sentence of that order directs Stratford to “provide its response to the discovery

requests addressed in the Motion, including a provision of a privilege log and proposed dates for the required depositions, by September 30, 2022.” [DE 84 at 5.] Defendants

3 claim Stratford ignored the order, and has refused to provide dates for required depositions. [DE 172 at 3.] This is really an attempt to make an end-run around Judge Martin’s subsequent

May 1, 2023 rulings in this case, the two lengthy orders now separately appealed by Schafer, Holmes and Shorewood. The May 1 orders denied Defendants’ multiple motions to compel, and dealt with privilege issues and the reach of discovery. [DE 143, 144.] As to a deposition of a Rule 30(b)(6) deponent, Judge Martin ruled “the Court will not order Stratford to produce non-parties involved in the state litigation for

depositions.” [DE 143 at 13.] Judge Martin also noted, “[n]ow that the questions of privilege are resolved, the parties should meet and confer regarding what depositions are necessary and attempt to schedule them at mutually beneficial times.” [DE 143 at 13.] Instead of seeking to meet and confer, Defendants filed motions for reconsideration of the orders denying their motions to compel, then the “Motion to Vacate,” and finally

this motion to enforce, trying to re-open what was already resolved by Judge Martin. The extraneous “motion for order enforcing” will be denied because the rulings at the heart of the issues are before me for review under Rule 72(a) on the Motion to Vacate. Before I get to the appeal itself, I need to clear out some underbrush. Stratford has filed an objection to the filing of separate reply memoranda by Shorewood Forest

[DE 169] and Shafer and Holmes [DE 170]. The two responses to the objection [DE 173 and 174] reasonably explain that separate replies could be filed by distinct parties with

4 distinct issues to address, even if they initially (and efficiently) filed the motion jointly. Stratford has wisely filed no reply in support of its objection which is hereby overruled. Let’s move now to the appeal [DE 164] which the Defendants call a “Motion to

Vacate.” Id. The motion is made pursuant to Fed.R.Civ.P. 72(a), which authorizes a district judge to consider timely objections to a magistrate judge’s non-dispositive decision and “modify or set aside any part of the order that is clearly erroneous or is contrary to law.” After correctly citing the clear error standard of Rule 72(a), the motion incorrectly invokes an inapplicable de novo standard of review without citing any

applicable authority. [DE 164 at 3.] Magistrate judges “enjoy extremely broad discretion in controlling discovery.” Jones v. City of Elkhart, Ind., 737 F.3d 1107, 1115 (7th Cir. 2013). Rule 72(a)’s “clearly erroneous” standard of review is an extremely deferential one. Perez v. Staples Contract & Commercial LLC, 31 F.4th 560, 569 (7th Cir. 2022). Clear error is only found where the “reviewing court...is left with the definite

and firm conviction that a mistake has been committed.” Pinkston v. Madry, 440 F.3d 879, 888 (7th Cir. 2006), quoting Anderson v. City of Bessemer, 470 U.S. 564, 573 (1985). Even if I would have decided the matters differently, Judge Martin’s rulings will stand unless the movants demonstrate that they were clearly erroneous or contrary to law.

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Bluebook (online)
Stratford Insurance Company v. Shorewood Forest Utilities Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stratford-insurance-company-v-shorewood-forest-utilities-inc-innd-2024.