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Excel Fortress Ltd. v. VerlWilhelm

United States District Court, D. Arizona

August 13, 2019

Excel Fortress Limited, et al., Plaintiffs,
Vaughn La Verl Wilhelm, et al., Defendants.



         Pending before the Court are (1) Plaintiff EFG America, LLC's (“EFG”) Rule 56(d) motion to defer consideration of Defendant Vaughn La Verl Wilhlem's (“Wilhelm”) motion for summary judgment (Doc. 160) and (2) the parties' stipulation to stay depositions (Doc. 169). For the following reasons, EFG's motion will be denied and the parties' stipulation will be granted.


         Although this case once involved an array of different parties and claims, it now involves a single negligence claim by one plaintiff (EFG) against one defendant (Wilhelm).[1] Specifically, EFG alleges while Wilhelm was working for EFG “on a consultant basis, ” with “responsibilities” that “included acquiring the ingredients and overseeing the mixture of specialty chemical compounds required in [EFG's] devulcanization rubber technology operation, ” Wilhelm “negligently ordered the wrong amount of chemicals, the wrong chemicals and failed to order some chemicals entirely.” (Doc. 160 at 2.) As damages, EFG seeks to recover both the cost of the purportedly wasted chemicals and the consulting payments that were made to Wilhelm.

         On July 2, 2019, Wilhelm filed a motion for summary judgment on EFG's negligence claim. (Doc. 157.) In that motion, Wilhelm argues the negligence claim fails as a matter of law because (1) EFG failed to retain an expert and thus cannot establish the standard of care, (2) the claim arises from his work as an independent contractor and is thus barred by the economic-loss rule, (3) there is no causal connection between his purported negligence and the consulting payments, which would have been paid regardless of whether he performed in a negligent manner, and (4) the consulting payments were made to a pair of LLCs, not to him personally, so he can't be held liable for them. (Id.)

         On July 12, 2019, EFG filed a Rule 56(d) motion. (Doc. 160.) In a nutshell, EFG contends it should be allowed to depose Wilhelm before responding to his summary judgment motion. (Id.) EFG also identifies an array of questions it wishes to ask Wilhelm during his deposition (id. at 8-10) and contends its negligence claim doesn't require expert testimony and won't be barred by the economic-loss rule (id. at 7-8).[2]

         On July 17, 2019, Wilhelm filed an opposition to the Rule 56(d) motion. (Doc. 162.)

         On July 24, 2019, EFG filed a reply in support of its Rule 56(d) motion. (Doc. 163.)

         On August 8, 2019, the parties filed a “Joint Motion to Stay Depositions.” (Doc. 169.) In this motion, the parties ask for a stay of all deposition deadlines in this case “pending resolution of [EFG's] Motion to Defer (ECF No. 160) and, in the event the Motion to Defer is denied, pending resolution of [Wilhelm's] Motion for Summary Judgment (ECF No. 157).” (Id. at 2.) In support of this request, the parties state that “[a]lthough [EFG] seeks to take [Wilhelm's] deposition for purposes of [Wilhelm's] Motion for Summary Judgment, the Parties wish to avoid the unnecessary expenditure of time and resources of taking all depositions by both sides while di[s]positive motions are still pending and in the event the Court decides that [Wilhelm's] deposition is unnecessary to consideration of his Motion for Summary Judgment.” (Id.)


         I. The Rule 56(d) Motion

         Rule 56(d) of the Federal Rules of Civil Procedure provides 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.” A party seeking relief under Rule 56(d) “must make clear what information is sought and how it would preclude summary judgment.” Margolis v. Ryan, 140 F.3d 850, 853 (9th Cir. 1998) (quotation omitted) (emphasis added). Thus, if the party seeking relief would lose at summary judgment even after obtaining the information at issue, the Rule 56(d) request should be denied. Midbrook Flowerbulbs Holland B.V. v. Holland Am. Bulb Farms, Inc., 874 F.3d 604, 619-20 (9th Cir. 2017) (affirming denial of Rule 56(d) motion because “the additional discovery that Holland America sought in its opposition to Midbrook's summary judgment motion” had “no bearing” on the legal issue that provided the foundation for the summary judgment motion).

         Here, EFG seeks a continuance under Rule 56(d) so it can depose Wilhelm before responding to his pending summary judgment motion. As explained below, this request will be denied because nothing Wilhelm might say in his deposition would preclude summary judgment-EFG's failure to obtain an expert means its negligence claim is doomed.

         The parties agree that EFG's negligence claim against Wilhelm is governed by Texas law. (Compare Doc. 157 at 3-4 [Wilhelm's MSJ, citing Texas law] with Docs. 160 at 7-8 and 163 at 4-5 [EFG's Rule 56(d) motion and reply, discussing Texas law on the need for expert testimony].) In Texas, “[e]xpert testimony is necessary when the alleged negligence is of such a nature as not to be within the experience of the layman.” FFETransp. Servs., Inc. v. Fulgham, 154 S.W.3d 84, 90 (Tex. 2004) (citation omitted). When conducting this inquiry, “Texas courts ...

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