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Kras v. Conifer Insurance Co.

United States District Court, N.D. Indiana, Hammond Division

November 23, 2016

NATHAN KRAS, Plaintiff/Judgment Creditor,
v.
CONIFER INSURANCE COMPANY, Garnishee-Defendant, CONIFER INSURANCE COMPANY, Counter Claimant,
v.
NATHAN KRAS, Counter Defendant.

          OPINION AND ORDER

          John E. Martin MAGISTRATE JUDGE

         This matter is before the Court on a “Motion for Extension of Time to Respond to Plaintiff's Motion for Summary Judgment” [DE 20], filed by Garnishee-Defendant Conifer Insurance Company on July 26, 2016. Conifer asks the Court to extend its deadline for responding to Plaintiff Nathan Kras's summary judgment motion until 30 days after the completion of discovery and the resolution of any discovery disputes. Kras has responded, and Conifer has replied.

         I. Background

         In September 2013, Nathan Kras was shot in the leg and abdomen outside a Hammond, Indiana nightclub. Two years later, in September 2015, Kras sued the nightclub and its owners in state court, alleging negligence. The nightclub owners had insurance with Conifer Insurance Company, but Conifer denied the nightclub owners' request for coverage for the attack. In Conifer's view, the policy provided coverage for the nightclub property only, not for the adjoining gravel parking lot where Conifer said the attack occurred.

         The state court litigation proceeded without Conifer's involvement. In March 2016, Kras served 28 admissions requests on the nightclub owners-the Court will refer to them as the insureds-regarding the nature, extent, and amount of Kras's injuries and damages, the location of the attack, and the insureds' fault with respect to the attack. The insureds fairly quickly agreed to a consent judgment by which they admitted negligence and admitted to all 28 admissions requests. The state court entered judgment against the insureds for $2, 955, 056-the amount of damages identified in the consent judgment and in the admissions requests.

         Having received judgment in his favor, in April 2016 Kras filed a motion for a proceeding supplemental. Kras sought to garnish $2, 955, 056 from Conifer in satisfaction of the state court judgment against the insureds. Conifer removed the case to federal court.

         On July 20, 2016, Kras filed a motion for summary judgment. At the time, neither party had conducted any discovery. But two days later, on July 22, 2016, Conifer served interrogatories and document production requests on Kras.

         Conifer now seeks to extend its deadline for responding to Kras's summary judgment motion until 30 days after the completion of discovery and the resolution of any discovery disputes. See Fed. R. Civ. P. 56(d) (“If a nonmovant shows [that] it cannot present facts essential to justify its opposition [to summary judgment], the court may: (1) defer considering the motion or deny it; (2) allow time . . . to take discovery; or (3) issue any other appropriate order.”).

         II. Analysis

         In general, the Court can extend a party's deadline for responding to a summary judgment motion if the party is unable to present facts essential to its opposition. Fed.R.Civ.P. 56(d); Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986) (premature summary judgment motions “can be adequately dealt with under Rule 56(f) [now Rule 56(d)], which allows a summary judgment motion to be denied, or the hearing on the motion to be continued, if the nonmoving party has not had an opportunity to make full discovery”); Woods v. City of Chicago, 234 F.3d 979, 990 (7th Cir. 2000) (“Rule 56(f) [now Rule 56(d)] authorizes a district court to refuse to grant a motion for summary judgment or to continue its ruling on such a motion pending further discovery if the nonmovant . . . demonstrat[es] why it cannot yet present facts sufficient to justify its opposition to the motion.”), cert. denied 534 U.S. 955.

         In a proceeding supplemental, a party is still entitled to discovery, although the Court has discretion to limit or even eliminate discovery to ensure that the procedure for enforcing a judgment remains swift and cheap. Symons Int'l Group, Inc. v. Cont'l Cas. Co., 306 F.R.D. 612, 617-18 (S.D. Ind. 2014) (“Both state and federal rules . . . allow for discovery in proceedings supplemental, and in considering the procedure by which discovery is conducted, the Court has considerable discretion . . . . to fashion procedures ensuring that ‘[p]roceedings to enforce judgments' remain ‘swift, cheap, [and] informal.'”) (alterations in original) (quoting Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1226 (7th Cir. 1993)).

         Here, Conifer argues that Kras's summary judgment motion raises issues that require discovery regarding what factual findings the trial court entered and whether the trial court's judgment amount was reasonable. Conifer says that it has not had an opportunity to obtain evidence relating to those issues, and that good cause exists to extend Conifer's response deadline because Conifer has been diligent in its discovery efforts (for example, serving discovery requests on Kras four days after answering Kras's complaint). See Fed. R. Civ. P. 6(b) (“When an act may or must be done within a specified time, the court may, for good cause, extend the time . . .”); Saul v. Prince Mfg. Corp., No. 12-270, 2013 U.S. Dist. LEXIS 8199, *3 (N.D. Ind. Jan. 22, 2013) (“The good cause standard focuses on the diligence of the party seeking the extension.”).

         Kras argues that no discovery is necessary. In Kras's view, Conifer is bound by the result of the state court lawsuit because Conifer, having had notice of the lawsuit and an opportunity to control the proceedings, chose neither to defend its insureds nor to file a declaratory judgment action. State Farm Fire & Cas. Co. v. T.B., 762 N.E.2d 1227, 1231 (Ind. 2002) (“The doctrine of collateral estoppel applies to insurance contracts and an insurer is ordinarily bound by the result of litigation to which its insured is a party, so long as the insurer had notice and opportunity to control the proceedings.”) (quotation omitted).

         A. Discovery regarding the trial court's factual findings

         Kras is correct that collateral estoppel generally applies when an insurer abandons its insured by neither defending under a reservation of rights nor seeking a declaratory judgment on the coverage issues. State Farm Fire & Cas. Co. v. T.B., 762 N.E.2d 1227, 1231 (Ind. 2002) (“insurer may avoid the effects of collateral estoppel by: (1) defending the insured under a reservation of rights in the underlying tort action, or (2) filing a declaratory judgment action for a judicial determination of its obligations under the policy”); see also Liberty Mut. Ins. Co. v. Metzler, 586 N.E.2d 897, 902 (Ind.Ct.App. 1992) (“An insurer, having knowledge its insured has been sued, may not close its eyes to the underlying litigation, force the insured to face the risk of that litigation without ...


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