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The Cincinnati Specialty Underwriters Insurance Co. v. C.F.L.P. 1, LLC

United States District Court, W.D. Kentucky, Louisville Division

September 21, 2017

THE CINCINNATI SPECIALTY UNDERWRITERS INSURANCE COMPANY PETITIONER
v.
C.F.L.P. 1, LLC d/b/a/ ARCADIA APARTMENTS RESPONDENT

          MEMORANDUM OPINION AND ORDER

          Dave Whalin, Magistrate Judge

         Two motions are presently before the Court. First is Respondent C.F.L.P. 1, LLC's, d/b/a Arcadia Apartments (“Arcadia”), Motion for Scheduling Order/Hearing on Bifurcated Claims. (DN 112). Second is Arcadia's Motion for Extension of Time to Respond to Petitioner The Cincinnati Specialty Underwriters Insurance Company's (“CSU”) Motion for Summary Judgment. (DN 117). CSU has responded in opposition (DN 113; DN 118), and Arcadia has filed a reply (DN 120). For the following reasons, the Court denies both Arcadia's Motion for Scheduling Order and Arcadia's Motion for Extension of Time.

         Background

         This case arises from a commercial property insurance policy issued by Petitioner CSU covering Respondent Arcadia's apartment complex in Louisville, Kentucky. In April of 2012, Arcadia reported a claim to CSU alleging that the roofs and siding of its apartment buildings were damaged in a hail storm. CSU inspected the siding and issued a payment of $24, 522.25 to cover the damage. Arcadia, however, disagreed with CSU's assessment and alleged the siding damage exceeded $1, 000, 000. As a result, CSU invoked the “appraisal” process from the insurance policy and appointed Marty Refka (“Mr. Refka”) as an appraiser, who assessed the loss at $29, 000. Arcadia eventually appointed Richard Michelson (“Mr. Michelson”) as its appraiser, and he appraised the loss in excess of $1, 000, 000. Because the two appraisers could not agree on an umpire, CSU followed the insurance policy and petitioned this Court to appoint an umpire. (DN 1).

         On February 21, 2014, Arcadia responded to CSU's petition and asserted four counterclaims, including (1) a request for reimbursement for damage to Arcadia's property caused by the April 2012 hailstorm; (2) CSU's violation of the Kentucky Unfair Settlement Claims Practices Act by nominating an improperly biased umpire; (3) a claim of common law bad faith; and (4) a request for a binding declaration that Arcadia was entitled to “cosmetic matching.” (DN 8). Four months later, Arcadia filed a motion to rescind the appraisal clause of the insurance policy (DN 40), which the Court denied (DN 77).

         After a year-and-a-half of contentious litigation, the Court granted CSU's motion to appoint an umpire and selected Jeff Turley (“Mr. Turley”) to serve as the umpire in the case. (DN 78). The Court's Opinion also denied Arcadia's request for “cosmetic matching.” (Id.). The parties then agreed to bifurcate Counts 2 and 3 of Arcadia's Counterclaim (“bad faith claims”) until resolution of the umpire process. (DN 81). Arcadia, however, continued to object to Mr. Turley's appointment as umpire by filing both a motion to disqualify Mr. Turley (DN 82; DN 83) and a motion for reconsideration on the issue of rescinding the appraisal process (DN 85). Following these motions, the Court held a telephonic conference, in which Mr. Turley participated. (DN 98).

         The Court questioned Mr. Turley regarding his ability to serve as an impartial umpire in resolving Arcadia's claim. (Id.). The Court ultimately determined that Arcadia failed to present a valid reason for altering its earlier decisions and denied both the motion to disqualify and motion for reconsideration. (DN 101).

         By early 2017, Mr. Turley completed his inspection and issued an Appraisal Award valuing Arcadia's actual cash loss at $94, 326.05. (DN 106-1). Mr. Turley and Mr. Refka expressed agreement with the Award and signed it. The Award became binding through their execution, pursuant to the policy's language. CSU has now issued payment to Arcadia for the Award amount.

         Only Arcadia's bad faith claims (Counterclaims 2 and 3) remain at issue. Following a telephonic status conference on April 17, 2017, the Court directed the parties to file an agreed order of dismissal within fifteen days or, if the parties could not agree on a resolution, the parties would have twenty days to file dispositive motions. (DN 110). CSU filed a motion for summary judgment on Arcadia's remaining claims on May 22, 2017. (DN 111). In response, Arcadia requested the Court hold a conference and issue a scheduling order for the surviving counterclaims. (DN 112). CSU objected to Arcadia's requests, explaining that no conference or scheduling order is necessary because Arcadia's counterclaims fail as a matter of law. (DN 113).

         Arcadia has also filed a motion for extension of time to respond to CSU's motion for summary judgment. (DN 117). Arcadia urges the Court to enter the earlier-requested scheduling order or, alternatively, grant Arcadia an extension of 120 days to take discovery pertaining to CSU's summary judgment motion. (Id.). Attached to Arcadia's motion is an affidavit from its counsel explaining that discovery in the form of interrogatories and document requests is necessary to obtain evidence of an “undue and improper relationship between CSU and its Umpire nominees both before and after the litigation was filed[.]” (DN 117-1). CSU again opposes Arcadia's requests, explaining that the issue of whether Mr. Turley was a proper umpire has already been decided by this Court and Arcadia does not present compelling reason to reopen it. Arcadia replies that it should be allowed some discovery “beyond the questions asked by the Court in connection with its decision to appoint Mr. Turley as Umpire.” (DN 120, at p. 3).

         Standard

         Federal Rule of Civil Procedure 56 governs motions for summary judgment. Subsection (d) states that “[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.” Fed.R.Civ.P. 56(d). This Rule is intended to provide a mechanism for the parties and the Court “to give effect to the well-established principle that ‘the plaintiff must receive ‘a full opportunity to conduct discovery' to be able to successfully defeat a motion for summary judgment.'” Cardinal v. Metrish, 564 F.3d 794, 797 (6th Cir. 2009) (quoting Short v. Oaks Corr. Facility, 129 F. App'x 278, 281 (6th Cir. 2005) (additional citation omitted)); see also Plott v. Gen Motors Corp., 71 F.3d 1190, 1195 (6th Cir. 1995) (“Before ruling on summary judgment motions, a district judge must afford the parties adequate time for discovery, in light of the circumstances of the case.”).

         The affidavit required by Rule 56(d) must “indicate to the district court [the party's] need for discovery, what material facts it hopes to uncover, and why it has not previously discovered the information.” Cacevic v. City of Hazel Park, 226 F.3d 483, 488 (6th Cir. 2000) (citing Radich v. Goode, 866 F.2d 1391, 1393-94 (3d Cir. 1989)); Price v. AgriLogic Ins. Servs., LLC, 37 F.Supp.3d 885, 891 (E.D. Ky. 2014). The Sixth Circuit has clarified that a motion under Rule 56(d) may be properly denied where the requesting party “makes only general and conclusory statements [] regarding the need for more discovery, ” Ball v. Union Carbide Corp., 385 F.3d 713, 720 (6th Cir. 2004) (citation omitted) (quoting Ironside v. Simi Valley Hosp., 188 F.3d 350, 354 ...


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