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Chu v. Great Northern Insurance Co.

United States District Court, Fourth Circuit

August 26, 2013

PETER L. CHU, Plaintiff,
v.
GREAT NORTHERN INSURANCE COMPANY, et al., Defendants.

MEMORANDUM OPINION

ROGER W. TITUS, District Judge.

On April 16, 2010, Plaintiffs Peter L. Chu and Ying L. Chu filed a six-count Complaint against Defendants Great Northern Insurance Company ("Great Northern"), The Chubb Indemnity Insurance Company, and The Chubb Insurance Group, in the Circuit Court for Montgomery County, Maryland. ECF No. 2. The Plaintiffs dismissed the claims against The Chubb Indemnity Insurance Company and The Chubb Insurance Group, leaving only Counts I breach of contract) and IV (consumer protection violation; unfair and deceptive trade practice) against Great Northern. ECF No. 3. A fire destroyed the Plaintiffs' home in July of 2008, and they request $5, 000, 000 in damages from Great Northern for failing to pay coverage for the loss under a home insurance policy. Compl. at 2, 7, ECF No. 2. On June 2, 2010, Great Northern, the sole remaining Defendant, removed the action to this Court on the basis of diversity jurisdiction. ECF No. 1.

BACKGROUND

The Plaintiffs maintained a residence at 100 Ashton Oaks Court, Ashton, Maryland 20861. Compl. ¶ 1, ECF No. 2. Great Northern provided homeowners insurance coverage for the Plaintiffs' residence. Id. On July 6, 2008, a fire in the Plaintiffs' residence resulted in a total loss of the premises. Id. ¶ 4. The Plaintiffs had paid all premiums due under their homeowners insurance policy, but Great Northern failed to pay for the losses that the Plaintiffs sustained from the fire. Id. ¶¶ 3, 5.

PROCEDURAL HISTORY

On April 16, 2010, the Plaintiffs filed a Complaint in the Circuit Court for Montgomery County, Maryland, in Case No. 330400-V. ECF No. 2. Great Northern removed the action to this Court on June 2, 2010. ECF No. 1. On June 4, 2010, Great Northern filed a Motion to Dismiss Count IV of Plaintiffs' Complaint, which asserts a claim under the Maryland Consumer Protection Act. ECF No. 9. After the Plaintiffs entered a Line of Dismissal as to Count IV, ECF No. 11, the Court denied Great Northern's Motion to Dismiss as moot. ECF No. 16.

On July 20, 2010, Great Northern filed an Answer with Affirmative Defenses and Counterclaim. ECF No. 17. On May 12, 2011, the United States of America filed an Unopposed Motion to Intervene and Stay this Proceeding Pending Resolution of a Federal Criminal Investigation. ECF No. 29. On May 17, 2011, the Court granted the United States' Application to Intervene and stayed discovery in this matter pending the outcome of the federal criminal investigation.

The Plaintiffs filed a pro se Notice of Constitutional Violations on August 16, 2011, ECF No. 31, which the Court denied on September 12, 2011. ECF No. 34. On September 7, 2011, the Plaintiff's counsel filed a Motion to Strike Appearance, ECF No. 33, which the Court granted on September 19, 2011. ECF No. 36.

On February 16, 2013, the United States filed a Motion to Further Stay this Proceeding Pending Resolution of a Federal Criminal Investigation. ECF No. 42. The Court granted the United States' Motion on February 21, 2012, staying discovery in this matter and requiring the United States to provide a status update on or before August 15, 2012. ECF No. 43. On August 15, 2012, the United States filed a letter to the Court, which indicates that the United States was not seeking a further stay of this matter. ECF No. 50.

The Court issued an Amended Scheduling Order on August 28, 2012, which provided that discovery would be completed by January 9, 2013. ECF No. 52. After the Plaintiffs filed a Motion to Compel Discovery, ECF No. 60, the Court referred the case to Magistrate Judge Jillyn K. Schulze for discovery. ECF No. 69. On February 12, 2013, Judge Schulze granted-in-part and denied-in-part the Plaintiffs' Motion to Compel. ECF No. 76.

Great Northern filed Motions to Compel on February 28, 2013, and March 22, 2013. ECF Nos. 77, 80. On March 28, 2013, Plaintiff Nancy Chu filed a Motion to Quash Subpoena for Deposition. ECF No. 84. On April 17, 2013, Judge Schulze issued a Letter Order granting Great Northern's Motions to Compel in full. ECF No. 89. Judge Schulze ordered that the Plaintiffs respond to Great Northern's request for production of documents by May 17, 2013; that the Plaintiffs select a proposed date for depositions by June 7, 2013; and that the discovery deadline of April 9, 2013, be extended solely for the discovery Judge Schulze outlined in the Order. Id. Judge Schulze wrote that the "Plaintiffs have to date refused to cooperate with defense counsel's efforts to obtain discovery." Id. Judge Schulze also called the Plaintiffs' attention to Rule 37(b)(2) of the Federal Rules of Civil Procedure, noting that "they will be subject to sanctions, including dismissal of their claim, for failure to provide documents and cooperate with scheduling and conducting their depositions." Id.

On June 24, 2013, Great Northern filed a Motion to Dismiss Plaintiffs' Complaint and Motion for Default Judgment on its Counterclaim. ECF No. 92. The Plaintiffs filed a Response to Great Northern's Motion on July 11, 2013. ECF No. 95.

STANDARD OF REVIEW

District courts possess "a comprehensive arsenal of Federal Rules and statutes to protect themselves from abuse." Chambers v. NASCO, Inc., 501 U.S. 32, 62 (1991). Rule 37(b) and 37(d) provide that the Court may issue sanctions if a party fails to appear for a deposition, fails to respond to discovery requests, or fails to obey an order to provide discovery. See Fed. R. Civ. P 37(b), (d). Such sanctions may include "dismissing the action or proceeding in whole or in part, " "rendering a default judgment against the disobedient party, " and/or "reasonable expenses, including attorney's fees." Fed.R.Civ.P. 37(b)(2)(A)(v), (vi); Fed.R.Civ.P. 37(d)(3). Rule 41(b) states that ...


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