United States District Court, D. North Dakota
Robert Mau, Eagle Well Services, Inc., Plaintiffs/Counterclaim Defendants,
Twin City Fire Insurance Company, Defendant/Counterclaim Plaintiff,
Eagle Operating, Inc., Counterclaim Defendant.
Charles S. Miller, Jr., Magistrate Judge United States
the court is Twin City Fire Insurance Company (“Twin
City”)'s Motion to Stay Discovery, (Doc. No. 55),
wherein Twin City seeks a stay in discovery until the pending
motions for summary judgment have been resolved. (Doc. No.
27, 47). Robert Mau, (“Mau”), Eagle Well
Services, Inc., (“EWS”) and Eagle Operating, Inc.
(“EOI”) (collectively “Plaintiffs”)
oppose the motion, arguing discovery should be allowed to go
forward. (Doc. No. 60)
following facts are either undisputed or simply assumed to be
true for purposes of this motion. EOI entered into an
insurance contract with Twin City that was effective from
April, 2013 through April, 2014. This contract covered
certain losses stemming from any EOI
“subsidiary.” The contract contained a number of
attached endorsements, the most pertinent of which is
Endorsement 2, which defined “subsidiary” as
including EWS, Star Well Services, Inc., and MW Industries,
Inc. (“MW”) (Doc. No. 27-4). The policy generally
provided coverage for the directors of the defined
subsidiaries. During its effective period, Mau served as
President of MW and was on its board of directors. Mau was
also the President of EWS and a shareholder.
Sun Well, EWS Sale and Litigation
February 2012, Sun Well Services, Inc., through one of its
predecessors, purchased assets from EWS. The Asset Purchase
Agreement (“APA”) consummating the sale, which
Mau signed as the President and shareholder of EWS, contained
a noncompete clause. In April 2012, MW sold two well
servicing rigs to American Well Services, LLP,
(“AWS”), which Mau owned with Gregory Wiedmer. At
the time of this sale, Mau was President of MW. On December
27, 2013, Sun Well sued Mau, AWS, EWS, and Wiedmer, alleging
MW's sale of these servicing rigs was on terms so
favorable as to constitute competition violating the
noncompete clause in the APA. As is relevant here, Sun Well
pled causes of action for breach of contract relating to the
APA's noncompete provision, fraud, and civil conspiracy
against both Mau and EWS.
January 17, 2014, Mau submitted a notice of claim to
representatives for Twin City. (Doc. No. 27-9). Mau also
forwarded a copy of the Sun Well complaint. On June 6, 2014,
Twin City denied coverage for the lawsuit. (Doc. No. 27-12).
From that point, Mau represented himself in the Sun Well
litigation, which, although not completely clear, ended in a
August 17, 2016, Mau and EWS initiated the current action in
state district court in Ward County. (Doc. No. 1-1). In the
complaint, Mau and EWS pled a cause of action for declaratory
relief seeking a declaration they were insureds under the
contract with Twin City, pled a cause of action for breach of
the implied duty of good faith and fair dealing, and pled a
cause of action for breach of contract. (Doc. No. 1). Twin
City removed on September 8, 2016. (Doc. No. 1).
moved for partial summary judgement on January 27, 2017.
(Doc. No. 27). In the motion, the Plaintiffs seek summary
judgment insofar as the court should declare, as a matter of
law, Twin City owed a duty to defend Mau in the Sun Well
litigation and Twin City breached that duty. Twin City also
filed a motion for summary judgment. (Doc. No. 46-1). In the
motion, Twin City seeks summary judgment, arguing that, as a
matter of law, Twin City did not owe a duty to defend or
indemnify Mau in the Sun Well litigation. Alternatively, Twin
City argues that, if it had such a duty, its failure to abide
by that duty was not in bad faith as a matter of law.
motion currently before the court, Twin City seeks an order
staying discovery until resolution of the pending motions for
summary judgment. (Doc. Nos. 27, 46-1). Twin City argues
discovery should not go forward because the pending motions
for summary judgment will, in essence, either dispose of this
case or significantly reduce the matters in dispute and
possibly render any further discovery wasteful. The
Plaintiffs contest the motion, arguing the current motion is
a delay tactic and further discovery is necessary to ...