United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER GRANTING EMERGENCY
MOTION TO STAY
Stewart United States District Judge
Judge Ted Stewart This matter is before the Court on
Defendant Sprint Solutions, Inc.'s (“Sprint”)
Emergency Motion to Stay. Sprint has also filed an Emergency
Motion to Vacate Trial, Reopen Discovery, and Extend Time for
Filing Dispositive Motion. Plaintiff opposes both Motions.
For the reasons discussed below, the Court will grant the
Motion to Stay and vacate the trial. Because the Court will
stay this action, it need not address the other arguments
raised in the Motion to Vacate Trial and Plaintiff's
response thereto, and that Motion will be denied as moot. The
Court will address whether it is appropriate to reopen
discovery and extend the dispositive motion deadline once the
stay is lifted.
initially filed this action against his former employer,
Connected Wireless, Inc. (“Connected Wireless”).
Plaintiff filed an Amended Complaint on August 2, 2018,
adding Defendant Sprint. Plaintiff alleges that Connected
Wireless is an agent of Sprint and thus Sprint is vicariously
liable for Connected Wireless' actions.
February 12, 2019, Connected Wireless provided notice that it
filed for bankruptcy. Pursuant to 11 U.S.C. § 362(a)(1),
this case is automatically stayed as against Connected
Wireless. Sprint now brings this Motion, requesting this case
be stayed with respect to both Defendants until the
bankruptcy of Connected Wireless is revolved or the
bankruptcy court lifts the automatic stay.
automatic stay prevents the continuation of judicial
proceedings “against the debtor.” As a general
rule, “the stay provision does not extend to solvent
codefendants of the debtor.” However, there is a narrow
exception to this general rule “when there is such
identity between the debtor and the third-party defendant
that the debtor may be said to be the real party defendant
and that a judgment against the third-party defendant will in
effect be a judgment or finding against the
debtor.” “An illustration of such a situation
would be a suit against a third-party who is entitled to
absolute indemnity by the debtor on account of any judgment
that might result against them in the
Sprint argues that it is entitled to indemnification from
Connected Wireless under the terms of the Authorized
Representative Agreement between the parties. “As a
result, if there is a judgment against Sprint in this case,
it effectively becomes a judgment against Connected Wireless
and becomes a claim on its bankruptcy
estate.” Plaintiff offers nothing to dispute this
characterization. Without formally deciding whether
Sprint's interpretation of that agreement is correct,
allowing a continuation of this action may adversely affect
the bankruptcy proceeding and the assets of Connected
Wireless' estate. Therefore, extension of the automatic
stay is appropriate here.
regardless of the application of the automatic stay,
“the 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.”The Court
considers the following factors to determine whether to grant
a stay: “(1) whether a stay would promote judicial
economy; (2) whether a stay would avoid confusion and
inconsistent results; and (3) whether a stay would unduly
prejudice the parties or create undue
these factors, the Court finds that a stay is warranted.
First, a stay would promote judicial economy. Plaintiff's
claims against Sprint are largely dependent on establishing
liability against Connected Wireless. Without Connected
Wireless' participation, Plaintiff's ability to move
forward is difficult, if not impossible. It makes little
sense to determine whether Sprint may be vicariously liable
without first determining Connected Wireless' liability.
Plaintiff argues that liability could be found against Sprint
independent of any liability against Connected Wireless.
While this may be true in many instances, Plaintiff fails to
explain how this is the case here. Further, without a stay
the Court and the parties will be forced to litigate the same
issues in two separate trials. This is not an efficient use
of resources. Thus, a stay will help promote judicial
economy. A stay would also avoid confusion and inconsistent
results for substantially the same reasons. Finally, there is
no evidence that a stay would unduly prejudice Plaintiff, nor
would it create an undue hardship. Rather, a stay would
protect the parties' interests while promoting the
efficient resolution of this case. Therefore, the Court will
grant the Motion to Stay.
therefore ORDERED that Sprint's Emergency Motion to Stay
(Docket No. 58) is GRANTED. This case is stayed until the
bankruptcy of Connected Wireless is resolved or the
bankruptcy court lifts the automatic stay. It is further
ORDERED that Sprint's Emergency Motion to Vacate Trial,
Reopen Discovery, and Extend Time for Filing Dispositive
Motion (Docket No. 60) is DENIED AS MOOT. It is further
ORDERED that the above-captioned case be administratively
closed and removed from the list of active pending cases.
This case may be reopened upon motion by any party.
trial and final pretrial ...