United States District Court, E.D. Texas, Sherman Division
PARK BOARD LTD. Plaintiff,
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY and DANIEL PROUGH, Defendants.
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Defendants' Request for Reimbursement
of Costs (Dkt. #47) and Plaintiff's Request for
Reimbursement of Costs (Dkt. #48). Having considered the
Motions and the relevant pleadings, the Court finds that each
Motion is DENIED.
Park Board Ltd. (“Park Board”) purchased an
insurance policy (the “Policy”) from State
Automobile Mutual Insurance Company (“State
Auto”) in January 2017 for a commercial building in
Collin County. The Policy includes a clause entitling the
insurer and insured to an “appraisal, ” which
determines the amount of loss to damaged property if the
Parties disagree on the initial valuation. Either
side may demand an appraisal, which prompts each side to
select its own appraiser. The chosen appraisers subsequently
select a third-an “umpire”-or have one appointed
by the Court. Working together, the group will determine the
appropriate amount of damage.
March and April of 2017, Park Board's property sustained
damage from severe wind and hail storms. Park Board reported
a claim to State Auto immediately. State Auto's adjuster
assessed the claim and found a damage amount of $8, 097.85
(below the policy's $26, 006.00 deductible) (Dkt. #42,
Exhibit 1 at p. 1, 3). Because the adjuster determined the
damage to be less than the Policy's deductible, State
Auto informed Park Board that it would not pay the claim via
email on April 7, 2017 (Dkt. #42, Exhibit 1 at p. 1). Park
Board contends that State Auto failed to conduct a good faith
investigation into the damages and that a reasonable insurer
would not have valued the claim so low. Not satisfied with
the result from the adjuster, Park Board sought to initiate
appraisal pursuant to the Policy in January 2018 (Dkt. #30,
¶ 32). According to Park Board, State Auto denied the
request for appraisal in breach of the Policy. In response,
Park Board filed suit in April 2018, a year after the storm
November 6, 2018, State Auto filed Defendants' Motion to
Abate (Dkt. #31). On December 3, 2018, the Court entered its
Order granting State Auto's Motion to Abate (Dkt. #34).
The Order stayed all discovery pending the appraisal process.
The Court further ordered that “within seven days of
completion of the appraisal process, Defendants shall file
either: (1) a Motion to Lift Abatement along with the new
proposed scheduling deadlines; or (2) if the appraisal
process resolves all claims, a Stipulation of Dismissal (Dkt.
#34). On April 15, 2019, the parties filed a Joint Notice of
Appraisal Award (Dkt. #35). State Auto issued payment of the
Appraisal Award to Park Board on April 8, 2019. State Auto
claimed that payment of the Appraisal Award resolved all
issues and claims before the Court (Dkt. #35). Thus, State
Auto continued, the case was ripe for dismissal (Dkt. #35).
Park Board disagreed. Park Board countered that it still had
viable claims and causes of action against State Auto (Dkt.
#35). Thus, Park Board stated that it intended to
“continue prosecuting this lawsuit” (Dkt. #35).
Following the Joint Notice of Appraisal Award, the parties
filed dueling Motions to Lift Abatement (Dkt. #38; Dkt. #40).
Both Motions were filed on April 22, 2019 (Dkt. #38; Dkt.
#40). Although Dkt. #38 is State Auto's controlling
Motion, State Auto originally filed a dual motion in Dkt. #36
on April 19, 2019. That Motion was entitled Defendants'
Motion to Lift Abatement and Dismiss (Dkt. #36). The Clerks
Office responded to the filing of Dkt. #36 by marking it
deficient. As such, State Auto filed Defendants'
Unopposed Motion to Lift Abatement (Dkt. #38), the now
controlling Motion, on April 22, 2019. State Auto followed
this Motion with Defendants' Motion to Dismiss-a Motion
which was also filed on April 22, 2019 (Dkt. #39).
State Auto's Motion to Dismiss, counsel for Park Board
served upon State Auto's counsel two deposition notices
(Dkt. #45). One notice was for Defendant Daniel Prough, the
other was for a 30(b)(6) representative of State Auto (Dkt.
#45). The purpose of the noticed depositions, according to
Park Board, was to prepare a defense to State Auto's
Motion to Dismiss (Dkt. #49). In response to the notices,
State Auto filed Defendants' Motion to Quash Notices of
Deposition (Dkt. #45). State Auto also filed Defendants'
Motion for Protective Order (Dkt. #46). On May 17, 2019, the
Court entered its Order Lifting Abatement (Dkt. #50). This
was followed by the Court granting Defendants' Motion to
Quash (Dkt. #51). Defendants' Motion for Protective Order
was denied as moot (Dkt. #53).
the Court now are cross-motions for costs due to the activity
that occurred in this action prior to the Court's Order
Lifting Abatement. On May 7, 2019, State Auto filed
Defendants' Request for Reimbursement of Costs (Dkt.
#47). State Auto argues that it is entitled to costs because
it had to respond to improper notices as well as file a
Motion to Quash, a Motion for Protective Order, and the
instant Motion (Dkt. #47). Park Board filed Plaintiff's
Response to Defendants' Request for Reimbursement of
Costs on May 15, 2019 (Dkt. #49). In its Response, Park Board
argues that State Auto is not entitled to costs due to its
“questionable litigation tactics” (Dkt. #49).
Park Board further argues that it is entitled to costs due to
the costs it incurred in responding to State Auto's
Motions (Dkt. #49).
15, 2019, after responding to State Auto's Motion for
Costs, Park Board filed Plaintiff's Request for
Reimbursement of Costs (Dkt. #48). In its Motion, Park Board
rehashed the arguments made in its Response to State
Auto's Motion. State Auto responded on May 29, 2019, by
filing Defendants' Response to Plaintiff's Request
for Reimbursement of Costs (Dkt. #52). State Auto contends
that it did not err in filing its Motion to Dismiss prior to
the Court's Order Lifting Abatement. State Auto also
disputes the rate for the costs that Park Board seeks (Dkt.
#52). The Court now considers each Motion.
district court “is afforded broad discretion in
allowing the reimbursement of costs.” See Jonathan
C. v. Hawkins, 2007 WL 1138432, at *6 (E.D. TX Apr. 16,
2007) (citing Loewen v. Turnipseed, 505 F.Supp. 512,
517 (N.D. Miss. 1980)); see also Migis v. Pearle Vision,
Inc., 135 F.3d 1041, 1049 (5th Cir.1998) (“The
district court has broad discretion in taxing costs, and we
will reverse only upon a clear showing of abuse of
discretion.”) (citing Alberti v. Klevenhagen,
46 F.3d 1347, 1358 (5th Cir.1995)); Hall v. State Farm
Fire & Cas. Co., 937 F.2d 210, 216 (5th Cir.1991)
(“A trial judge has wide discretion with regard to the
costs in a case and may order each party to bear his own
costs.”). “The judge cannot, however, order the
prevailing party to share, or shoulder all of, the costs of
the non-prevailing party unless the costs serve as a
sanction.” Hall, 937 F.2d at 216 (citing
Three-Seventy Leasing Corp. v. Ampex Corp., 528 F.2d
993, 999 (5th Cir.1976)). A court must state the reasoning
behind its decision should the court determine that the
prevailing party should not be awarded costs. Id.
(citing Walters v. Roadway Express, Inc., 557 F.2d
521, 526 (5th Cir. 1977)); see also Sheets v. Yamaha
Motors Corp., U.S.A., 891 F.2d 533, 539 (5th Cir. 1990)
(“[T]he district court is required to provide
justification for its actions [in denying costs].”).
matter here is simple. Both parties were aware that the
present action was abated until an appraisal award was
entered and the Court issued an order lifting abatement.
Despite this knowledge, State Auto file a Motion to Dismiss
and Park Board issued two notices for depositions prior to
the Court's Order Lifting Abatement-an Order which was
entered on May 17, 2019. State Auto may contend that its
Motion to Dismiss was proper because it had filed a Joint
Notice of Appraisal Award and a Motion to Lift Abatement.
Yet, the abatement had not yet been lifted. Thus, State
Auto's Motion to Dismiss was premature and in violation
of the Court's Order (Dkt. #34). Park Board may argue that it
was entitled to serve State Auto's counsel with two
deposition notices so it could defend against State
Auto's Motion to Dismiss. But, again, discovery was
abated, the Court had not yet lifted that abatement, and
there were other means to contest the validity of ...