United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON DEFENDANT JAMES BURKHART'S MOTION TO
STAY CIVIL PROCEEDINGS
WALTON PRATT, UNITED STATES DISTRICT COURT JUDGE
matter is before the Court on Defendant James Burkhart's
(“Burkhart”) Motion to Stay Civil Proceedings
(Filing No. 87). Burkhart asks the Court to stay the
instant civil lawsuit until thirty (30) days after entry of
judgment regarding his Motion to Vacate or Set Aside Sentence
Under 28 U.S.C. § 2255 filed on December 20, 2018 in
United States of America v. James Burkhart, Case No.
1:16-cr-00212-TWP-TAB-01 (“Crim. Dkt.”). For the
reasons stated below the Court denies the
motion to stay.
October 2016, a federal grand jury returned a thirty-two
count Sealed Indictment against James Burkhart, Joshua
Burkhart, Daniel Benson and Steven Ganote charging them with
violating 18 U.S.C. § 1349 (conspiracy to commit mail,
wire and health care fraud), 18 U.S.C. §§ 1341 and
1343 (mail and wire fraud), 18 U.S.C. § 371 and 42
U.S.C. § 1320a-7b(b) (conspiracy to violate
anti-kickback laws), and 18 U.S.C. §§
1956(a)(1)(B)(i) and 1957 (money laundering). United
States of America v. Burkhart, et al., Case No.
September 15, 2017, Plaintiff American Senior Communities,
L.L.C. (“ASC”), filed the instant civil action
against five individuals, four of whom (James Burkhart,
Joshua Burkhart, Daniel Benson and Steven Ganote) were named
defendants in the above-referenced criminal case, and the
fifth of whom, Roger Werner (“Werner”), served as
the former Chief Financial Officer of ASC. This action also
names several corporate defendants. The Complaint alleges
violations of the Racketeer Influence and Corrupt
Organizations Act (“RICO”), conspiracy to violate
RICO, and several state law and common law causes of action.
December 1, 2017, this Court stayed this action pending the
entry of judgment in the criminal case (Filing No.
44.) The Order directed the Clerk of the Court to
administratively close this case and that the parties may
seek to reopen the case by filing joint status report 30 days
after entry of judgment in the criminal case. Id.
and the other individual defendants in the criminal case each
entered pleas of guilty. Judgments of conviction were entered
against James Burkhart on July 10, 2018, Steven Ganote on
July 19, 2018, Joshua Burkhart on July 20, 2018, and Daniel
Benson on July 27, 2018. The Court left open the issue of
restitution and ordered the parties to meet and confer on
that outstanding issue within sixty (60) days of the dates on
which each defendant was sentenced. A final Amended Order of
Restitution was entered on January 17, 2019. (Crim. Dkt.
entry of judgments of conviction in the criminal case, ASC
and Werner filed a Joint Status Report explaining that the
criminal action has been resolved and requested that the
civil matter be reopened. (Filing No. 51.) The
matter was reopened via a Scheduling Order on August 26,
2018. (Filing No. 53.) On October 17, 2018, counsel
for each of the individual defendants participated in an
initial pretrial conference and thereafter negotiated and
signed a Case Management Plan which was later approved by the
Court. (Filing No. 67.)
December 20, 2018, Burkhart, ACCD LLC d/b/a Crusader
Healthcare Services III, American Senior Care LLC, JACCD LLC
d/b/a Crusader IV, 105214 Investments LLC d/b/a Crusader
Healthcare Services, and 105210 Investments LLC d/b/a
Crusader Healthcare Services II (collectively the
“Burkhart Defendants”) filed an Answer,
Affirmative Defenses and Counterclaims. (Filing No.
83.) On that same date, December 20, 2018, Burkhart
filed a Motion Under 28 U.S.C. § 2255 to Vacate, Set
Aside, or Correct Sentence (the “§ 2255
petition”), and a new civil case was opened under Case
No. 1:18-cv-4013-TWP-DLP in which he asserts ineffective
assistance of trial counsel in his criminal case. On January
2, 2019, Burkhart filed the instant Motion to Stay Civil
Proceedings wherein he asks this Court to stay any further
proceedings in the instant civil action, pending resolution
of the § 2255 petition. (Filing No. 87.) In its
Response in Opposition to Motion to Stay (Filing No.
96), ASC objects to any further stay of these
proceedings and argues that a stay would not serve the
interests of justice and would severely prejudice ASC.
pending in this action is a Motion to Dismiss for failure to
state a claim filed by Werner (Filing No. 75), and
Plaintiff and Counter-Defendant American Senior
Communities' Motion to Dismiss James Burkhart's
Counterclaims (Filing No. 100).
power to stay proceedings is incidental to the power inherent
in every court to control the disposition of the causes on
its docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. North
American Co., 299 U.S. 248, 254 (1936). In considering a
stay request, the Court should consider: “(i) whether a
stay will unduly prejudice or tactically disadvantage the
non-moving party, (ii) whether a stay will simplify the
issues in question and streamline the trial, and (iii)
whether a stay will reduce the burden of litigation on the
parties and on the court.” Pfizer Inc. v. Apotex
Inc. 640 F.Supp.2d 1006, 1007 (N.D. Ill. 2009).
Moreover, “[c]ourts disfavor stays of discovery
‘because they bring resolution of the dispute to a
standstill.'” Red Barn Motors, Inc. v. Cox
Enterprises, Inc., No. 1:14-CV-01589, 2016 WL 1731328,
at *3 (S.D. Ind. May 2, 2016) (quoting New England
Carpenters Health & Welfare Fund v. Abbott Labs, No.
12 C 1662, 2013 WL 690613, at *2 (N.D. Ill. Feb. 20, 2013).
memorandum of law, Burkhart asked that this action be stayed
while his collateral attack on his criminal conviction goes
forward. He argued that the parallel proceedings of this
civil case and his § 2255 “criminal action”
would have implications if he were to prevail and be granted
a new trial. For example, he contends that the potential
exists for exploitation of civil discovery to ...