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Century Indemnity Co. v. Begley Co.

United States District Court, E.D. Kentucky, Central Division

January 3, 2018

BEGLEY COMPANY, et al., Defendants.


          Joseph M. Hood Senior U.S. District Judge

         This matter is before the Court upon Defendant Begley Company's Motion for Leave to File a First Amended Counterclaim and Crossclaim for Declaratory Relief. [DE 34');">34');">34');">34');">34');">34');">34');">34]. The time to file a response having lapsed, and the Court being otherwise sufficiently advised, this matter is ripe for the Court's review. For the reasons stated herein, Defendant's Motion is GRANTED.


         As an initial matter, the Court notes that, by failing to respond, co-Defendant Travelers and Plaintiffs have waived opposition to the motion. See Humphrey v. U.S. Att'y Gens. Office, 29 Fed.Appx. 328, 331 (6th Cir. 2008); Resnick v. Patton, 258 Fed.Appx. 789, 790-91 n.1 (6th Cir. 1989); Walker v. Jones, No. 09-cv-393-GFVT, 2010 WL 1838969, at *1 (E.D. Ky. May 5, 2010). Under local rules, failure to respond is grounds for this Court to grant the motion. See LR 7.1(c).

         But deadlines are important things. And when the Court establishes deadlines, the parties are obliged to follow them. If a party attempts to file an untimely motion, the Court will not blithely grant it without considering the reasons for the delay. As such, the Court will more fully address issue.


         This case involves several parties disputing insurance coverage related to alleged environmental contamination at two dry cleaning facilities currently or formerly operated by Begley. [DE 34');">34');">34');">34');">34');">34');">34');">34, p. 2]. Begley, at various times, maintained different insurance policies with Plaintiffs Century Indemnity Company (“Century”) and Pacific Employers Insurance Company (“PEIC”) as well as with Defendants Travelers Property Casualty Company of America, Travelers Indemnity Company, Travelers Indemnity company of America, and Charter Oak Fire Insurance Company (collectively “Travelers”).

         Begley argues that, under the policies at issue, Travelers must indemnify Begley or defend the claims in this case. [DE 34');">34');">34');">34');">34');">34');">34');">34, p. 2]. After being named as a defendant, Begley asserted counterclaims against Century and PEIC, as well as a crossclaim against Travelers. These claims sought declarations that Century and Travelers (1) “must provide Begley a complete defense against claims that Begley is liable for property damage” related to the alleged contamination and (2) “must indemnify Begley, up to their respective policies' limits, if Begley becomes legally obligated for damages due to property damage” from the alleged contamination. [Id.].

         Begley's original crossclaim addressed only potential property damages. Begley now seeks to amend its crossclaim to include requests for declarations regarding personal injury and advertising injury under the policies. [DE 34');">34');">34');">34');">34');">34');">34');">34, p. 3]. Prior to filing this motion, Begley sent a letter to Travelers discussing the policies. [DE 34');">34');">34');">34');">34');">34');">34');">34, Ex. 2]. In response, Travelers wrote “we would expect all of the issues you have raised to be resolved as part of the ongoing coverage litigation filed by Century Indemnity Company and Pacific Employers Insurance Company in the Eastern District of Kentucky, USDC Case No. 5:17-cv-00138-JMH.” [DE 34');">34');">34');">34');">34');">34');">34');">34, Ex. 3]. Thus, Travelers itself expects this Court to resolve these matters.


         In civil cases, district courts must issue scheduling orders under Rule 16 of the Federal Rules of Civil Procedure. The contents of the scheduling order must include a limit on the time to amend the pleadings and file motions. Fed.R.Civ.P. 16(b)(3)(A). This Court issued a scheduling order on June 1, 2017. [DE 29]. The order required parties to file motions to amend pleadings by August 1, 2017. [Id.]. Rule 16 “ensure[s] that ‘at some point both the parties and the pleadings will be fixed.'” Leary v. Daeschner, 34');">34');">34');">34');">34');">34');">34');">349 F.3d 888');">34');">34');">34');">34');">34');">34');">34');">349 F.3d 888, 906 (6th Cir. 2003)(quoting Fed.R.Civ.P. 16, 1983 advisory committee's notes). A scheduling order maintains orderly proceedings and is “not a frivolous piece of paper, idly entered, which can be cavalierly disregarded . . . without peril.” Birge v. Dollar Gen. Corp., No. 04-2531 B, 2006 WL 1334');">34');">34');">34');">34');">34');">34');">3480, at *1 (W.D. Tenn. Jan. 12, 2006).

         Begley acknowledges that its motion has been filed after the deadline in the scheduling order. [DE 34');">34');">34');">34');">34');">34');">34');">34, p. 4]. But Begley argues this Court should allow the late motion under Fed.R.Civ.P. 6(b)(1)(B), which states: “[w]hen an act may or must be done within a specified time, the court may, for good cause, extend the time: on motion made after the time has expired if the party failed to act because of excusable neglect.” Fed.R.Civ.P. 6(b)(1)(B).

         Although Begley moves under Rule 6, Rule 16 governs modifications to scheduling orders. Fed.R.Civ.P. 16(b)(4). Rule 16 allows changes to the scheduling order only for “good cause and with the judge's consent.” Id. Thus, failing to move for an amendment before the expiration of a scheduling order deadline implicates Rule 16. Leary, 34');">34');">34');">34');">34');">34');">34');">349 F.3d at 905. In Leary, the Sixth Circuit applied Rule 16's “good cause” standard to the plaintiff's motion to amend the complaint that the plaintiff filed after the deadline established in the scheduling order. Id. at 906-09. The Court did not mention Rule 6 in its analysis, and it affirmed the district court's denial of the plaintiff's motion based on plaintiff's failure to show good cause. Id.

         This does not mean, however, that Rule 6 has no applicability in this context. A recent opinion in this district wrestled with the relationship between Rule 16 and Rule 6 when a party files a motion after a scheduling order deadline. See First Tech. Cap., Inc. v. BancTec, Inc., No. 5:15-CV-138, 2017 WL 2735516 (E.D. Ky. June 26, 2017). In BancTec, the defendant attempted to amend its answer a month after the cutoff date in the case schedule. Id. In denying the defendant's motion, the Court first rejected the argument that Rule 6 never applies: “The Sixth Circuit has applied, and other Circuits regularly apply, Rule 6(b) when reviewing decisions to amend (or not) a case schedule.” Id. at *4 (citing cases). Although courts have not consistently applied Rule 6 when parties file motions after case schedule deadlines, no Sixth Circuit case has ever held that Rule 6(b) does not apply. Id. at *4, n.7. Indeed, Judge Wier wrote that the Circuit's “lack of consideration of Rule ...

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