Opinion ID: 2337629
Heading Depth: 2
Heading Rank: 3

Heading: Stay Must be Limited as Hindering Search for Truth without Balancing of Interests.

Text: While the Court of Appeals correctly declined to mandamus the trial court on the consolidation and amend issues, we are constrained by our own precedent following long-standing United States Supreme Court precedent to hold that the Court of Appeals erred in denying a writ to vacate the stay order entered in the second action. In Rehm v. Clayton, [13] the trial court had entered summary judgment in favor of defendants on the plaintiffs' premises liability claims and the plaintiff appealed. However, the plaintiff's products liability claims were scheduled for trial approximately one year after summary judgment was granted on the premises liability claims. A defendant (sued on both premises liability and products liability claims) moved the trial court for a stay of discovery and trial on the products liability claims, pending the outcome of the appeal of the dismissal of the premises liability defendants. [14] The trial court granted the stay, and the plaintiff requested a writ prohibiting the trial court from staying discovery but not from staying trial. The Court of Appeals denied the writ, and the plaintiff appealed to this Court. [15] This Court reversed, quoting liberally from Landis v. North American Company, [16] for the proposition that a trial court abuses its discretion by ordering `a stay of indefinite duration in the absence of a pressing need.' [17] This Court then explained that the defendants' wish to avoid the burden of having to repeat much of the discovery process if the premises liability claim were reversed on appeal was outweighed by the plaintiff's interest in going forward with discovery because of the possibility of extensive delay resulting in witnesses' becoming unavailable or unable to remember, evidence being lost or destroyed, and physical conditions changing. [18] This explanation supported this Court's finding that: a discovery stay as extensive as the one ordered by the trial court is likely to cause irreparable injury to the Appellants for which no adequate remedy by appeal exists. [19] In the instant case, the Court of Appeals distinguished Rehm , stating that the stay ordered by the trial court was not indefinite in duration; but the stay would be lifted following trial of the first action, which was scheduled to take place a relatively short time from the time the trial court issued the stay order. The Court of Appeals noted in a footnote that the scheduled trial of the first action, ultimately, was continued. And the Court of Appeals erroneously found that the stay would be lifted once trial in the first case was complete. More accurately, the trial court stated in the stay order that the second action shall be held in abeyance pending further orders and pending further action in [the Estate's first-filed case]. As we read the trial court's order, it established no definite terminus. Apparently, the trial court announced that he was staying the second action pending completion of the first actionan ambiguous term which might mean trial or might mean end of any appeal, either of which might take years to complete. [20] In any event, we fail to see how the trial court's stay order in the case before us was more definite than the stay order entered in Rehm pending appeal. Although we recognize that a trial court has inherent power to stay proceedings as part of managing its own docket, it abuses its discretion by ordering an indefinite stay in a pending case without a clear showing of a pressing need. [21] We find no indication in the instant case that the trial court balanced the parties' interests and determined that some pressing need warranted the stay. Arnold argues that the trial court must have ordered the stay in order to resolve an underlying negligence claims before proceeding to the issue of whether to pierce the corporate veil. But we can find no indication on the record that the trial court's issuance of the stay was based on this ground. Rather, the trial court issued the indefinite stay without articulating any basis. In fact, because the trial court issued the stay order on its own motion, the defendants themselves had not advanced any pressing need for such a stay, yet, the potential for losing valuable evidence exists with discovery stayed. And we have found the deleterious effects of the passage of time during a stay to be an irreparable injury with no adequate remedy by appeal in Rehm . Arnold also contends that the stay caused no injury because the Estate had already obtained sufficient discovery, including depositions of individual defendants Arnold and Brandy Hancock, on the issue of piercing the corporate veil; and the Estate had even stated in its pleadings that in its own opinion, it already had enough evidence to justify piercing the corporate veil. But we simply cannot predict whether this evidence would be sufficient to convince the factfinder of the necessity of piercing the corporate veil or to prove any of the other claims. Nor do we know whether additional discovery might yield additional evidence useful for proving other claims. Given the threat that evidence might disappear before it is discovered, we simply cannot uphold the trial court's stay on the basis of speculation that a party might have already obtained enough evidence to prove (or at least create a jury issue as to) one of several claims. Because the issuance of the stay order led to an irreparable injury with no adequate remedy by appeal under our case law, the Court of Appeals erred in denying the petition for a writ of mandamus to compel the trial court to vacate the stay of discovery.