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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

BRIAN A. MULLALLY, M.D., 

 Plaintiff/Counter-Defendant, Case No. 14-cv-14433 

 Hon. Matthew F. Leitman 

v. 

STANDARD INSURANCE COMPANY, 

 Defendant/Counter-Plaintiff. 

_________________________________/ 

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND FOR 

DEFAULT JUDGMENT (ECF #22) AND DISMISSING PLAINTIFF’S 

FIRST AMENDED COMPLAINT (ECF #15) WITH PREJUDICE 

INTRODUCTION 

This action is a dispute between an insurance company and one of its 

insureds. Plaintiff/Counter-Defendant Brian A. Mullally, M.D., (“Dr. Mullally”) 

alleges that Defendant/Counter-Plaintiff Standard Insurance Company 

(“Standard”) failed to make certain payments owing to him under a “Business 

Overhead Expense” insurance policy he purchased from Standard (the “Policy”). 

(See First Am. Compl., ECF #15 at 2, Pg. ID 96.) Standard disputes that it owes 

Dr. Mullally any payment under the Policy, and it has filed counterclaims seeking 

recovery of certain payments it did make to Dr. Mullally (totaling $133,103.29). 

(See Def.’s Ans., ECF #11 at 7, Pg. ID 74.) 

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Standard has now filed a motion to dismiss Dr. Mullally’s claims and for a 

default judgment on its counterclaims (the “Motion”). (ECF #22.) For the reasons 

explained below, the Court GRANTS the Motion. 

RELEVANT FACTUAL BACKGROUND 

Dr. Mullally purchased the Policy from Standard in 2004. (See Policy, ECF 

#16-1 at 6, Pg. ID 121.) The Policy permits Dr. Mullally to seek reimbursement 

for his business’s “Covered Expenses” during periods of personal disability. (See 

id. at 7, Pg. ID 122.) The Policy defines “Covered Expenses” as the insured’s 

“share of business expenses incurred or allocable in [the insured’s] regular 

occupation...that are ordinary and necessary in the operation of [the] business or 

profession.” (Id. at 8, Pg. ID 123.) 

 In mid-2013, Dr. Mullally was diagnosed with liver cancer.1

 (See First Am. 

Compl., ECF #15 at 2, Pg. ID 96.) On May 20, 2013, Dr. Mullally submitted a 

claim for Covered Expenses under the Policy while he sought treatment for his 

cancer. (See Def.’s Ans., ECF #16 at 12, Pg. ID 109.) According to Standard, it 

paid Dr. Mullally a total of $133,103.29 in monthly installments from August 2013 

through May 2014. (See Def.’s Ans., ECF #16 at 13, Pg. ID 110.) Dr. Mullally 

                                                            

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 Dr. Mullally alleges that the cancer is terminal. (See First Am. Compl., ECF #15 

at 2, Pg. ID 96.) Standard admits that Dr. Mullally was diagnosed with liver 

cancer, but not that his diagnosis is terminal. (See Def.’s Ans., ECF #16 at 4-5, Pg. 

ID 100-01.) 

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alleges that Standard wrongfully stopped making payments to him in May 2014 

despite his ongoing disability. (See First Am. Compl., ECF #15 at 3, Pg. ID 97.) 

 In response, Standard denies that it failed to reimburse Dr. Mullally for any 

Covered Expenses owing under the Policy. (See Def.’s Ans., ECF #16 at 9, Pg. ID 

106.) Indeed, Standard alleges that it actually overpaid Dr. Mullally. (Id.) More 

specifically, Standard asserts that Dr. Mullally closed his medical practice “in or 

around June 2013,” and thus was no longer entitled to reimbursement for Covered 

Expenses following that closure. (See id. at 7-9, Pg. ID 104-06.) Standard says 

that despite the closure, Dr. Mullally nonetheless continued to accept payments 

from Standard. (See id.) Standard also claims that “[e]xpenses for which [Dr. 

Mullally] claims reimbursement were not ‘ordinary and necessary’ in the operation 

of his business and otherwise fail to satisfy” the Policy’s definition of Covered 

Expenses. (See id. at 7-8, Pg. ID 104-05.) Standard alleges that Dr. Mullally 

wrongfully accepted $133,103.29 in benefits to which he was not entitled. (See id.

at 13, Pg. ID 110.) 

PROCEDURAL HISTORY

 Dr. Mullally filed his First Amended Complaint on April 8, 2015. (See ECF 

#15.) On April 22, 2015, Standard filed its Answer. (See ECF #16.) Standard also 

filed counterclaims for breach of contract, unjust enrichment, and restitution. (See 

id. at 15-17, Pg. ID 112-14.). 

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In early July 2015, Standard contacted the Court by letter to complain that 

Dr. Mullally had not responded to interrogatories and document requests it had 

served upon him. On July 2, 2015, the Court held a phone conference with the 

parties. (See Dkt.) During that conference, counsel for Dr. Mullally informed the 

Court that Dr. Mullally had not responded to the outstanding discovery requests 

because he was receiving treatment for liver cancer. Dr. Mullally’s counsel then 

asked the Court stay this action while Dr. Mullally received treatment. The Court 

instructed Dr. Mullally’s counsel to file a formal motion requesting a stay, and 

counsel did so on July 16, 2015 (the “Stay Motion”). (See ECF #19.) 

In the Stay Motion, Dr. Mullally requested additional “time to focus on his 

health and his treatment” because litigation can be particularly taxing on a party 

who is “battling terminal cancer at the same time.” (Id. at 1-3, Pg. ID 155-57.) On 

August 12, 2015, the Court denied the Stay Motion to the extent that it requested 

an indefinite stay. (See ECF #21 at 3. Pg. ID 188.) But the Court was sympathetic 

to Dr. Mullally’s condition, and issued the following Order in an effort to fairly 

accommodate the interests of both parties: 

The Court fully understands and is sympathetic to the challenges Dr. 

Mullally faces as he battles liver cancer. The Court must carefully 

balance Dr. Mullally’s circumstances against Standard’s right to a fair 

and efficient adjudication of Dr. Mullally’s claims and its 

counterclaim. If Standard is not permitted to take discovery from Dr. 

Mullally now, it may forever lose a critical opportunity to develop 

support for its serious counterclaim against him. The Court also notes 

that while Dr. Mullally’s diagnosis appears to be undisputed, the 

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motion requesting a stay is not supported by a letter from Dr. 

Mullally’s physician attesting that Dr. Mullally cannot participate in 

any discovery. Under these circumstances, the Court does not believe 

that an indefinite stay of proceedings is appropriate. 

 

However, given Dr. Mullally’s medical condition, an extension of 

time to respond to Standard’s outstanding discovery is not 

unreasonable. The discovery was first served on Dr. Mullally on May 

12, 2015. The Court will grant Dr. Mullally an additional 30 days 

from the date of this Order to respond to the discovery. This will have 

provided Dr. Mullally, in total, roughly four months to respond to the 

discovery. As this action moves forward, the Court will consider 

granting Dr. Mullally additional and/or other accommodations to 

enable him to participate in discovery and in the litigation. 

Accordingly, for the reasons stated above, it is hereby ordered that Dr. 

Mullally’s Motion for Stay of Proceedings (ECF #19) is denied. It is 

further ordered that Dr. Mullally is directed to respond to Standard’s 

outstanding discovery within 30 days of this Order. 

(Id.at 2-3, Pg. ID 186-87.) 

Despite the Court’s order that Dr. Mullally provide discovery responses by 

September 11, 2015, (and the despite the Court’s willingness to provide Dr. 

Mullally with additional accommodations to allow him to continue participating in 

this action), he did not do so – and still has not done so more than two months 

later. Nor has Dr. Mullally sought an additional extension or suggested that he is 

preparing (or contemplating preparing) the discovery responses. 

On September 24, 2015, Standard filed the Motion. (See ECF #22.) In the 

Motion, Standard asserts that Dr. Mullally has failed to produce any documents 

despite the Court’s extension and Standard’s own good faith efforts to confer with 

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Dr. Mullally and his counsel by telephone and in writing. (See id. at 3-4, Pg. ID 

191-92.) Dr. Mullally failed to file a response to the Motion. It does not appear 

that Dr. Mullally has not taken any action in this case since July – roughly four 

months ago – and neither Dr. Mullally nor his counsel has indicated that he is 

considering any future participation in the action. 

On October 16, 2015, Standard filed a reply brief – despite not receiving a 

response from Dr. Mullally – in which it once again requested that this Court 

dismiss Dr. Mullally’s First Amended Complaint and that it grant Standard a 

default judgment on its counterclaims. (See ECF #23.) 

ANALYSIS

 Dr. Mullally’s First Amended Complaint is subject to dismissal for two 

reasons. First, he has failed to comply with this Court’s Order (ECF #21) requiring 

him to provide discovery responses to Standard. Under Federal Rule of Civil 

Procedure 41(b), “[i]f the plaintiff fails to prosecute or to comply with . . . a court 

order, a defendant may move to dismiss the action or any claim against it.” The 

Court applies the following four factors to determine whether dismissal under 

Federal Rule of Civil Procedure 41(b) is appropriate: 

(1) whether the party's failure is due to willfulness, bad faith, or fault; 

(2) whether the adversary was prejudiced by the dismissed party's 

conduct; (3) whether the dismissed party was warned that failure to 

cooperate could lead to dismissal; and (4) whether less drastic 

sanctions were imposed or considered before dismissal was ordered. 

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United States v. Reyes, 307 F.3d 451, 458 (6th Cir. 2002). And “[a]lthough no one 

factor is dispositive, dismissal is proper if the record demonstrates delay or 

contumacious conduct.” Id.

 The record in this case demonstrates clear delay and complete 

unresponsiveness on the part of Dr. Mullally. He has failed to comply with the 

Court’s Order requiring him respond to Standard’s discovery requests no later than 

September 11, 2015. Dr. Mullally also never contacted the Court to communicate 

that he was having problems complying with the Order or that his treatment 

prevented him from meeting the deadline. Nor has Dr. Mullally taken any steps to 

indicate that the discovery responses are being prepared and/or will be served upon 

Standard. Dr. Mullally’s failure to respond to Standard’s discovery requests has 

materially prejudiced Standard. Simply put, without the discovery responses, 

Standard cannot effectively defend against Dr. Mullally’s claims or prosecute its 

own counterclaims. And if, as Dr. Mullally has suggested, his health status will 

continue to deteriorate, Standard may forever lose the ability to obtain the needed 

discovery responses. Finally, the Court has considered less drastic sanctions but 

does not believe that any are appropriate given Dr. Mullally’s complete abdication 

from this case and the resulting serious prejudice to Standard. 

Second, Dr. Mullally failed to respond to the Motion which sought dismissal 

of his claims. Local Rule 7.1(e)(1)(B) requires a party to respond to an opponent’s 

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dispositive motion within 21 days. “Numerous cases have held that where a 

plaintiff fails to respond to a motion to dismiss, his or her claims are deemed 

abandoned.” Williams v. Chase Bank, No. 15-10565, 2015 WL 4600067, at *3 

(E.D. Mich. July 29, 2015); see also Schafer v. City of Defiance Police Dep’t, 529 

F.3d 731, 739 (6th Cir. 2008) (“[A] party that does not act in bad faith, but 

nevertheless shows willfulness and fault in that he was at best extremely dilatory in 

not pursuing his claim, indicates an intention to allow his case to lapse”) (internal 

quotations and citation omitted). The Court thus deems Dr. Mullally’s claims 

abandoned and dismisses them for this second, independent reason. 

 Next, Standard is entitled to a default judgment on its counterclaims. Rule 

37(b)(2)(vi) of the Federal Rules of Civil Procedure authorizes a district court to 

enter a default judgment against a party who fails to comply with a discovery 

order. Here, as described in detail above, Dr. Mullally failed to comply with the 

Court’s Order directing him “to respond to Standard’s outstanding discovery 

within 30 days” of August 12, 2015. (Order Denying Stay Motion, ECF #21 at 3, 

Pg. ID 188.) The Court issued that Order to preserve Standard’s “critical 

opportunity to develop support for its serious counterclaim against” Dr. Mullally. 

(Id. at 2, Pg. ID 187.) Dr. Mullally’s noncompliance, even after the Court granted 

him an extension, has further compromised that opportunity. Thus, Dr. Mullally’s 

noncompliance with the Court’s Order is sufficiently serious as to warrant the 

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extreme sanction of entry of a default judgment. See Bank One of Cleveland v. 

Abbe, 916 F.2d 1067, 1073 (6th Cir. 1990) (“Simply put, if a party has the ability 

to comply with a discovery order and does not, dismissal and we add entry of 

default, is not an abuse of discretion”) (emphasis added; internal quotations and 

citation omitted). 

The Court remains sympathetic to Dr. Mullally and has done its best to 

accommodate him. But the Court must continue to balance Dr. Mullally’s 

circumstances against Standard’s right to a fair and efficient adjudication of Dr. 

Mullally’s claims and its counterclaims. Under the unfortunate circumstances 

presented here – where Dr. Mullally has failed to comply with a court order, failed 

to respond to a dispositive motion, failed to request any additional 

accommodations from the Court, and has given no indication that he intends to 

continue participating in this action – granting the relief requested by Standard is 

appropriate. 

Accordingly, IT IS HEREBY ORDERED that the Motion (ECF #22) is 

GRANTED; that Dr. Mullally’s First Amended Complaint is DISMISSED 

WITH PREJUDICE; and that a default judgment (on liability only) shall enter in 

favor of Standard on its counterclaims. 

 s/Matthew F. Leitman 

 MATTHEW F. LEITMAN 

Dated: November 16, 2015 UNITED STATES DISTRICT JUDGE 

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 I hereby certify that a copy of the foregoing document was served upon the 

parties and/or counsel of record on November 16, 2015, by electronic means 

and/or ordinary mail. 

 s/Shawna C. Burns 

 Case Manager 

 (313) 234-5113 

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