Best Partners Mortgage Cooperative, Inc. v. Plaza Home Mortgage, Inc.

Background

Best Partners Mortgage Cooperative, Inc., doing business as Lenders One, sued Plaza Home Mortgage, Inc. The opinion does not decide the parties’ underlying contract dispute. It addresses two motions concerning discovery while Best Partners’s motion for judgment on the pleadings was pending. A motion for judgment on the pleadings asks the court to decide the case based on the pleadings rather than on evidence developed through discovery.

The Motions

Best Partners moved to stay discovery, except damages discovery, until the court decided its motion for judgment on the pleadings. Best Partners argued that Plaza’s requests were broad and far-reaching, including requests involving Best Partners and its affiliates or alter egos, the formation and interpretation of the agreement and first amendment, performance under those documents, claimed damages, and other documents. Best Partners also argued that the pending motion did not require discovery and that pausing discovery would not unfairly prejudice Plaza.

Plaza opposed the stay. It argued that its requests were narrowly tailored, that responding would impose minimal burden, and that it would be prejudiced because it was owed significant amounts and wanted to resolve the issues promptly. Plaza also argued that Best Partners overstated the strength of its pending motion and that Plaza’s denials and affirmative defenses supported denying that motion.

Plaza separately requested a pre-motion conference before filing a motion to compel Best Partners to respond to Plaza’s interrogatories and document requests. Best Partners argued that it did not have to provide responses while its motion to stay discovery was pending.

Court’s Analysis

The court explained that discovery is not automatically stayed merely because a motion has been filed. Under Federal Rule of Civil Procedure 26(c), however, a court may issue a protective order for good cause to prevent undue burden or expense. The party seeking the stay must make a specific factual showing. Relevant considerations include the scope of the requested discovery, the burden of responding, possible prejudice to the opposing party, and the strength of the pending motion.

The court found that Best Partners established good cause because responding to the discovery would impose an undue burden. The court also found that Plaza was unlikely to suffer unfair prejudice from the stay. Because the court granted the stay, it denied Plaza’s request for a pre-motion discovery conference.

Disposition

The court granted Best Partners’s motion to stay discovery, except damages discovery, pending a decision on the motion for judgment on the pleadings. It denied without prejudice Plaza’s motion for a pre-motion conference. The opinion does not state the outcome of the motion for judgment on the pleadings or resolve the parties’ breach-of-contract claims.