Opinion
Civil Action No. 3:00-CV-1335-D
December 5, 2001
ORDER
In this action by plaintiff Heller Healthcare Finance, Inc., f/k/a HCFP Funding, Inc. ("Heller"), defendant J. Marc Hesse ("Hesse") moves to stay the case and Heller moves to sever its claims against Hesse. The court grants the motion to stay to the extent of staying the case only with respect to Heller's action against Hesse. The court grants Heller's motion for severance and severs its action against Hesse from its actions against the remaining defendants.
I
Hesse moves for a stay based on the insolvency of his insurance carrier, Reliance Insurance Company, and a Texas Insurance Code provision that triggers a six month stay. Heller responds that it has settled with Hesse, notes that it has separately moved for a severance, and requests that any stay apply only to the claims that are the subject of Hesse's motion rather than to the entire case. Defendant Irving D. Boyes ("Boyes"), joined by defendants Stephen K. Morehead ("Morehead") and Donald R. Iglehart ("Iglehart"), oppose a stay on the grounds that it would increase expense to them and that they are prepared to move for summary judgment.
Texas law mandates that a stay be granted, and this court should enter a stay in such circumstances. See Barnhardt Marine Ins., Inc. v. New England Int'l Sur. of Am., Inc., 961 F.2d 529, 531 (5th Cir. 1992) (addressing Burford-type abstention in view of Louisiana's comprehensive framework for the liquidation of insolvent insurance companies and the resolution of claims against them). Even if the claims of injury proffered by codefendants Boyes, Morehead, and Iglehart were valid reasons not to stay the case, the court is adequately addressing those concerns infra at § II by severing Heller's action against Hesse and permitting the balance of the lawsuit to proceed.
II
Heller moves the court to sever its action against Hesse. Hesse opposes the motion until such time as he determines whether his defense will be undertaken by the Texas Property Casualty Insurance Guaranty Association ("TPCIGA") and whether it will accept the settlement he has reached with Heller.
Fed.R.Civ.P. 21 provides that "Any claim against a party may be severed and proceeded with separately." This court has broad discretion to sever issues under Rule 21. Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir. 1994). As the court has already noted, Heller and three remaining defendants want the balance of the case to proceed. In view of the mandatory stay as to Hesse, this cannot occur absent a severance. Hesse will not be prejudiced by a severance unless the settlement is not funded by TPCIGA, Heller then opts to revive its case against him, and Hesse is somehow (he does not say how, see Nov. 14, 2001 Resp. at 1) prejudiced by being sued separately from the other defendants. The harm that Hesse foresees from this hypothetical scenario is simply too speculative to warrant denying a severance and thereby effecting a stay of the entire lawsuit.
The court therefore grants Heller's motion to sever. The clerk of court shall open a new civil action number, assign the case to the "D" docket, place this order in the file as the first pleading, and collect from Heller any filing fee that is required by law. Pleadings filed in Civil Action No. 3:00-CV-1335-D shall not be transferred to the new civil action file except by court order. In view of the stay against Hesse, the clerk of court shall close the new civil action for statistical purposes, without prejudice to its being reopened by subsequent court order.
* * *
Hesse's October 25, 2001 motion to stay proceedings and Heller's October 25, 2001 motion to sever claims are granted.
SO ORDERED