Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_23-cv-00643/USCOURTS-caed-1_23-cv-00643-11/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

AMERICAN ZURICH INSURANCE 

COMPANY,

Plaintiff,

v.

ESG REPUBLIC, INC, et al.,

Defendants/Counterclaimants.

Case No. 1:23-cv-00643-KES-CDB

ORDER RE REQUEST FOR RESOLUTION 

OF DISCOVERY DISPUTE

(Doc. 76)

ORDER STAYING BRIEFING ON (1) 

DEFENDANTS’ MOTION FOR SUMMARY 

JUDGMENT AND (2) PLAINTIFF’S 

MOTION TO STRIKE

(Docs 73, 75)

ORDER RE COURTROOM DECORUM

AND DIRECTING DENNIS P. 

GALLAGHER TO FILE NOTICE OF 

APPEARANCE

Currently before the Court is a discovery dispute that the parties have agreed to submit to 

the Court for adjudication through the Court’s informal discovery dispute procedure.

Background

Plaintiff American Zurich Insurance Company initiated this action with the filing of a 

complaint against Defendants on April 27, 2023. (Doc. 1). On September 20, 2023, the Court 

entered a scheduling order that adopted all case management dates as proposed by the parties. 

(Docs. 18-21).

Case 1:23-cv-00643-KES-CDB Document 81 Filed 12/11/24 Page 1 of 8
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On January 18, 2024, Plaintiff filed the operative second amended complaint (SAC) that 

added a Defendant (WL Acquisitions, LLC) and included additional allegations. (Doc. 34). All 

appearing Defendants answered and certain Defendants asserted crossclaims. (Docs. 35-37, 40).1

On May 24, 2024, the Court granted the parties’ renewed, first stipulated request for 90-

day extension of all case management dates. (Docs. 50, 52). The Court’s order including the 

following admonition: “The Court expects the parties to properly manage and balance 

completion of all discovery within the modified case management dates [] without regard to 

ongoing and/or parallel efforts to settle the case.” Id.

On the deadline for filing a joint mid-discovery status report one week in advance of the 

mid-discovery status conference, the parties filed instead a second stipulated request for a further 

four-month extension of case management dates (to include a continuance of the mid-discovery 

status conference). (Doc. 53).

In light of their failure to timely file a joint mid-discovery status report, the Court directed 

the parties to file a joint status report no later than August 23, 2024. (Doc. 54). The parties 

thereafter filed their report which revealed that Plaintiff had propounded its initial written 

discovery demands on March 24, 2024 – a full six months after the case was scheduled and 

discovery opened. (Doc. 55). Moreover, with the exception of Defendant Thorn, it appears that 

all other Defendants were afforded more than three months to respond to Plaintiff’s written 

discovery demands. Id. The report further revealed that the Vensure Defendants had propounded 

no written discovery until shortly before the filing of the joint status report. Id. Although 

depositions were noticed within the existing deadline to complete nonexpert discovery, all of the 

noticed depositions were taken off calendar in light of the parties’ hope that the requested 

extensions would be granted. Id.

After convening for the mid-discovery status conference, on August 27, 2024, the Court 

entered an order finding that the parties did not establish good cause sufficient to warrant a fourmonth extension of all case management dates. (Doc. 57). After addressing the reasons why the 

1 At Plaintiff’s request, the Clerk of the Court entered defaults against Defendants ESG 

Republic II, LLC, and ESG Republic, Inc, which have not appeared in the action. (Docs. 29-

30).

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parties failed to carry their burden of showing good cause, the Court nevertheless permitted the 

parties to continue engaging in nonexpert discovery through and including the deadline to 

complete expert discovery (November 27, 2024). Id.

The Parties’ Discovery Dispute

Discovery closed on November 27, 2024. On November 29, 2024, Defendants filed a 

motion for summary judgment. (Doc. 73). Immediately thereafter, Plaintiff requested to convene 

with the Court for an informal discovery dispute conference. In their joint statement of the 

discovery dispute, filed on December 6, 2024, Plaintiff raised two issues for the Court’s 

resolution. First, despite repeated efforts by Plaintiff, Defendants allegedly failed before the 

deadline to complete discovery (November 27, 2024) to make available for deposition certain 

witnesses whose notices of deposition were first transmitted to Defendants on August 19, 2024. 

(Doc. 76 at 2-3). Second, Defendants allegedly have not produced certain documents identified 

by other witnesses during recent depositions that Plaintiff argues are subject to discovery 

pursuant to its document demands. Id. at 4.

In response to these complaints, counsel for Defendants contends that he attempted at least 

nine times between October 27, 2024, and December 6, 2024, to obtain deposition availability 

for the noticed witnesses (presumably without success). Id. at 5. As for Plaintiff’s dispute 

concerning documents, counsel for Defendants contends Plaintiff failed to adequately 

meet/confer concerning this issue, there is no showing the “vaguely” described documents exist, 

and there is no basis to find Defendants have custody of any such documents should they exist. 

Id. at 5-6.

On December 10, 2024, the Court convened with the parties off the record to address the 

discovery disputes. (Doc. 80). Lincoln Horton appeared on behalf of Plaintiff and Christopher 

Cianci appeared on behalf of all appearing Defendants with the exception of Defendant Jeffrey 

Thorn, who failed to appear. At the beginning of the conference, the parties agreed to resolution 

of the identified discovery disputes outside the Local Rule 251 formal parameters, agreed to 

proceed without record, and agreed to abide by an order of the Court after the conference 

resolving the disputes, subject to seeking review by the assigned district judge pursuant to Fed. 

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R. Civ. P. 72(a) under the “clearly erroneous” or “contrary to law” standards.

Governing Legal Standard

“Rule 26 provides that a party “may obtain discovery regarding any nonprivileged matter 

that is relevant to any party’s claim or defense and proportional to the needs of the case, 

considering the importance of the issues at stake in the action, the amount in controversy, the 

parties’ relative access to relevant information, the parties’ resources, the importance of the 

discovery in resolving the issues, and whether the burden or expense of the proposed discovery 

outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “Evidence is relevant if: (a) it has any 

tendency to make a fact more or less probable than it would be without the evidence; and (b) the 

fact is of consequence in determining the action.” Fed. R. Evid. 401.

Relevancy is broadly defined to encompass any matter that bears on, or that reasonably 

could lead to other matter that could bear on, any issue that is or may be in the case. Oppenheimer 

Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). Although relevance is broadly defined, it does 

have “ultimate and necessary boundaries.” Gonzales v. Google, Inc., 234 F.R.D. 674, 680 (N.D. 

Cal. 2006) (quoting Oppenheimer Fund, Inc., 437 U.S. at 351). “The purpose of discovery is to 

make trial less a game of blind man’s bluff and more a fair contest with the basic issues and facts 

disclosed to the fullest extent possible, and to narrow and clarify the issues in dispute.” Jadwin 

v. Cnty. Of Kern., No. 1:07-cv-0026-OWW-TAG, 2008 WL 2025093, *1 (E.D. Cal. May 9, 

2008) (quotation and citations omitted).

Separately, motions to compel are governed by Federal Rule of Civil Procedure 37, which 

states, in pertinent part:

(a) Motion for an Order Compelling Disclosure or Discovery

(1) In General. On notice to other parties and all affected persons, a party may 

move for an order compelling disclosure or discovery. The motion must include a 

certification that the movant has in good faith conferred or attempted to confer 

with the person or party failing to make disclosure or discovery in an effort to 

obtain it without court action. See Fed. R. Civ. P. 37.

Further, pursuant to Rule 37, a Court may impose sanctions if a party, officer of the party, 

or a person designated pursuant to Rule 30(b)(6) fails to appear for a properly noticed deposition. 

Fed. R. Civ. P. 37(d)(1).

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Discussion

During the discovery dispute conference, counsel for Defendants reiterated his 

commitment to making the noticed deponents available for deposition and agreed with the 

undersigned that his inability to accommodate Plaintiff’s noticed depositions to date largely was 

the result of Defendants’ intransigence in responding to his requests for availability. Counsel 

separately agreed that, in the event documents exist as described by Plaintiff in the parties’ joint 

statement (a promissory note, a purchase agreement, and detailed balance and profit/loss 

statements, see Doc. 76 at 4), those documents would be responsive to Plaintiff’s discovery 

demands.

Plaintiff indisputably has suffered prejudice in being deprived of the opportunity to 

examine duly noticed defense witnesses before the expiration of discovery. Among other things, 

Plaintiff has adequately established both in the parties’ joint brief and during the discovery 

dispute conference that the anticipated testimony of the deponents is material both to Plaintiff’s 

ability to oppose Defendants’ pending motion for summary judgment and, potentially, to support 

its own affirmative motion for summary judgment. Further, Plaintiff does not attempt to establish 

that the continuing failure by the noticed defense witnesses to appear for deposition is 

substantially justified – to the contrary, he concedes that Defendants’ noncompliance with the 

deposition notices is unjustified and attributable to intransigent parties.

Construing Plaintiff’s request as a motion to compel pursuant to Rule 37, the Court will 

grant the request and order the noticed deponents to appear for deposition no later than December 

23, 2024. Pursuant to Rules 37(b)(2)(A)(ii), (iv) & (d)(1), (3), as a result of Defendants’ 

prejudicial and unjustified failure to appear for depositions, the Court will prohibit Defendants 

from supporting their pending motion for summary judgment or opposing any motion by Plaintiff 

for summary judgment with testimony elicited during the depositions.

The Court cautions Defendants that their failure to make themselves available for 

deposition in violation of this Order may be grounds for the imposition of additional sanctions, 

including further evidentiary and/or financial sanctions. See Lanier v. San Joaquin Valley 

Officials Ass’n, No. 1:14-cv-01938-EPG, 2016 WL 4764669, at *8 (E.D. Cal. Sept. 12, 2016)). 

Case 1:23-cv-00643-KES-CDB Document 81 Filed 12/11/24 Page 5 of 8
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Moreover, pursuant to Rule 37(d)(3), any noncompliance by Defendants with the requirements 

of this Order will be sanctioned by the Court with the award to Plaintiff of its reasonable 

attorney’s fees and expenses incurred.

The Court separately will direct Defendants to make a diligent search for the identified 

documents (a promissory note, a purchase agreement, and detailed balance and profit/loss 

statements) and transmit to Plaintiff a certification that they have completed a diligent search for 

the documents, describe the results of the search, and produce any responsive documents.

The Court will stay briefing and vacate the noticed hearings on Defendants’ motion for 

summary judgment and Plaintiff’s motion to strike (Docs. 73, 75). Within 14 days of the 

completion of the noticed depositions, the parties shall file a stipulated request for modified 

briefing schedule on the motions. To the extent Plaintiff seeks to file an untimely motion for 

summary judgment following the conclusion of depositions, he shall set forth in the stipulation 

the grounds constituting good cause to permit the late filing.

* * * * *

Finally, the Court takes this opportunity to admonish counsel – including newly appearing 

counsel for Defendant Jeffrey Thorn – that, without express, advance leave of Court, they are not 

authorized to voluntarily absent themselves from duly noticed Court conferences and hearings. 

Nor are they authorized for any reason to purport to relieve one another of their respective 

obligations to timely appear for all conferences and hearings, as apparently happened in 

connection with the instant informal discovery dispute conference. The undersigned generously 

but grudgingly extends the benefit of the doubt to attorney Dennis P. Gallagher that his failure to 

appear at the informal discovery dispute conference was a misunderstanding facilitated in part 

by counsel for Plaintiff’s miscommunication to him of the need to appear.

It remains unclear to the Court whether Mr. Gallagher even is duly noticed in this case: the 

information provided by former counsel in the notice of attorney substitution (Doc. 69) lacks an 

email address and is inconsistent with Mr. Gallagher’s contact information (1) currently on the 

docket, (2) identified on the California State Bar’s website, and (3) listed on the signature line of 

the only pleading in this case bearing his name (see Doc. 79). Accordingly, Mr. Gallagher will 

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be directed to file a complete notice of appearance, to include current firm affiliation, address, 

phone number and email address. 

Conclusion and Order

For the foregoing reasons, it is HEREBY ORDERED:

1. Plaintiff’s request for discovery relief (Doc. 76), construed as a motion to compel 

pursuant to Rule 37, is GRANTED;

2. Alex Campos and the duly noticed Rule 30(b)(6) deponents identified in the parties’ 

joint statement (Doc. 76 at 2) SHALL APPEAR for and complete depositions no 

later than December 23, 2024, and Defendants are prohibited from supporting their 

pending motion for summary judgment or opposing any motion by Plaintiff for 

summary judgment with testimony elicited during the depositions;

3. No later than December 17, 2024, Defendants SHALL COMPLETE a diligent 

search for documents identified in the parties’ joint statement (Doc. 76 at 4) and 

transmit to Plaintiff a certification that they have completed a diligent search for 

the documents, describe the results of the search, and produce any responsive 

documents;

4. Briefing on Defendants’ motion for summary judgment and Plaintiff’s motion to 

strike (Docs. 73, 75) is HEREBY STAYED and the noticed motion hearings before 

the assigned district judge are HEREBY VACATED;

5. No later than January 6, 2025, the parties SHALL FILE a stipulated request for 

modified briefing schedule on the motions. To the extent Plaintiff seeks to file an 

untimely motion for summary judgment, he shall set forth in the stipulation the 

grounds constituting good cause to permit the late filing; and

///

///

///

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6. No later than December 17, 2024, Dennis P. Gallagher, counsel for Defendant 

Jeffrey Thorn, SHALL FILE a complete notice of appearance, to include current 

firm affiliation, address, phone number and email address.

Failure to timely comply with this order will result in the imposition of sanctions as 

further described above.

IT IS SO ORDERED.

Dated: December 11, 2024 ___________________ _

UNITED STATES MAGISTRATE JUDGE

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