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United Specialty Insurance Co. v. Dorn Homes Inc.

United States District Court, D. Arizona

August 2, 2019

United Specialty Insurance Company, Plaintiff,
v.
Dorn Homes Incorporated, et al., Defendants. Dorn Homes Incorporated, Counter Claimant,
v.
United Specialty Insurance Company Counter Defendant.

          ORDER

          Dominic W. Lanza United States District Judge.

         Pending before the Court is the Motion to Extend the Amended Scheduling Order (Doc. 68) filed by Plaintiff/Counter-Defendant United Specialty Insurance Company (“USIC”). Defendant/Counter-Claimant Dorn Homes, Inc., (“Dorn”) has filed an opposition (Doc. 72) and USIC has filed a reply (Doc. 74). For the following reasons, the motion will be denied.

         BACKGROUND

         In or around April 2017, Dorn became aware of alleged construction defects in a subdivision of homes it had built in Prescott Valley, Arizona. (Doc. 68 at 2; Doc. 72 at 2.) In response, Dorn hired two engineering firms, Felten[1] and PGG, to conduct an investigation. (Id.) Dorn also alerted its insurance company, USIC, that it had potential exposure. (Id.)

         Through its investigation, Dorn concluded that “two interconnected issues”- specifically, expansive soils and truss movement-had contributed to the damage. (Doc. 72 at 2.) As a result, “Dorn implemented certain repairs to address these issues.” (Id.) Dorn then sought reimbursement from USIC “in excess of $3, 700, 000.” (Doc. 74 at 2.) USIC denied this reimbursement claim, and this lawsuit ensued.

         On May 5, 2018, USIC filed its complaint. (Doc. 1.) In a nutshell, USIC seeks declaratory relief concerning its insurance coverage for the costs incurred by Dorn. (Doc. 68 at 2.)

         On July 24, 2018, the Court issued a scheduling order that, among other things, set (1) a fact discovery deadline of March 15, 2019, (2) expert disclosure deadlines of August 16, 2019 (for the party with the burden of proof) or September 20, 2019 (party without the burden), (3) a deadline of January 3, 2020 for the close of “all” discovery, and (4) a dispositive motions deadline of February 7, 2020. (Doc. 21.)

         On March 20, 2019, five days after the fact discovery deadline had expired, the parties filed a stipulation requesting the extension of various deadlines. (Doc. 30.)

         On March 25, 2019, the Court granted in part and denied in part the parties' stipulation. (Doc. 31.) The Court stated:

Here, the parties' sole reason for seeking an extension, including an after-the-fact extension of the fact discovery deadline, is that “the trial schedule of counsel for plaintiff” made it impossible to schedule certain unspecified depositions before the fact discovery deadline. (Doc. 30 at 1.) This is a particularly half-hearted attempt to comply with Rule 16's “good cause” requirement. When was the trial? How long was it? Was Plaintiff's counsel already aware of it when the parties agreed to the scheduling order in this case, which provided eight months to complete depositions? Are the other three attorneys who have made appearance on behalf of Plaintiff incapable of conducting depositions? The absence of such information, coupled with the belated timing of the extension request and the fact that docket doesn't reflect the service of any discovery, the noticing of any depositions, or any other action over the last three months, strongly suggests a showing of diligence can't be made here.

(Id. at 2.) The Court “grudgingly” agreed to “a modest extension” of the fact discovery deadline, extending it to May 3, 2019 (a seven-week extension, rather than the 13-week extension to which the parties stipulated). (Id.) The Court expressly declined to extend any other deadlines. (Id.)

         Because the case had been reassigned to the undersigned judge, the Court also issued an entirely new Amended Case Management Order (Doc. 32), “altering various procedures and the fact discovery deadline but otherwise retaining the deadlines from the original Scheduling Order.” (Doc. 31 at 2.) The Court further ordered that “any motion or stipulation to modify the Amended Case Management Order . . . will be viewed with disfavor by the Court and will be granted only in the case of demonstrable good cause.” (Id. at 2-3.)

         On May 1, 2019, the parties filed a second stipulation to amend case deadlines, requesting an extension of the fact discovery deadline from May 3, 2019 to January 3, 2020. (Doc. 58.) The parties asserted that good cause supported the request because (1) “due to technology issues (corrupt files), a supplemental disclosure of documents by USIC failed, ” (2) the parties were attempting to resolve a discovery dispute, (3) “as in most cases, the depositions of the key witnesses disclosed additional fact witnesses that the parties may wish to depose, ” and (4) “repairs of construction defects are continuing.” (Id. at 3.)

         On May 2, 2019, the Court granted the parties' stipulation and extended the fact discovery ...


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