Izard v. Quest Energy Corporation
- Valerie Caproni
- 1:20-cv-08608
- U.S. District Court · Southern District of New York
- 3
In Izard v. Quest Energy Corporation, Judge Caproni denied bifurcated discovery but extended the fact-discovery deadline and adjourned the conference.
The plaintiffs and defendants in Izard v. Quest Energy Corporation were affected by the denial of bifurcated discovery, the extension of fact discovery to June 14, 2021, and the adjournment of the pretrial conference to June 25, 2021.
What happened
Izard v. Quest Energy Corporation concerns investors’ claims involving unpaid promissory notes, a royalty agreement, personal guarantees, security for the notes, and alleged transfers of assets to avoid payment. The parties proposed handling discovery and summary-judgment proceedings on the contract claims first, followed by discovery on the asset-transfer claims if needed.
The parties also asked to extend the fact-discovery deadline from May 14, 2021, to June 28, 2021. They jointly proposed separating discovery because the contract claims might resolve the case or make the asset-transfer claims unnecessary.
Judge Valerie Caproni denied the request to separate discovery because it was made three days before the discovery deadline. She extended fact discovery to June 14, 2021, and adjourned the pretrial conference to June 25, 2021.
The detailed version
- Izard v. Quest Energy Corporation · No. 1:20-cv-08608
- Valerie Caproni
- May 11, 2021
Background
The plaintiffs are six investors who collectively invested $400,000 in secured promissory notes issued by Quest Energy Corporation. The notes were backed by assets and rights associated with Samuel Coal Company, Inc. The plaintiffs allege that payment of the notes’ principal was also guaranteed by Quest’s principals, Mark C. Jensen and Thomas M. Sauve. Quest separately entered into a Royalty Agreement requiring payments based on gross coal sales.
The plaintiffs allege that payments on the notes and Royalty Agreement stopped after September 2014. They asserted contract-related claims, claims for breach of the individual defendants’ personal guarantees, and a claim seeking enforcement of the security underlying the notes. They also asserted fraudulent-conveyance claims based on allegations that Jensen transferred personal assets to a trust and that Quest impaired or disposed of collateral securing the notes. The defendants deny that the individual defendants are personally liable and assert defenses including waiver and usury.
Requested Discovery Plan
The parties proposed bifurcating discovery—handling different groups of claims separately. They asked to complete discovery and summary-judgment proceedings on the contract-related claims first. If one or more defendants were found liable on those claims, they proposed allowing additional discovery on the fraudulent-conveyance claims. If the defendants were not liable on the contract claims, or if the case settled after summary-judgment proceedings, the parties stated that the fraudulent-conveyance issues would become unnecessary.
The parties also requested that the May 14, 2021 fact-discovery deadline be extended by 45 days, to June 28, 2021. Alternatively, they requested a 75-day extension, to July 28, 2021, if the court did not approve the proposed bifurcation.
Ruling
The court denied the application to bifurcate discovery. The order states: “The Court will not grant a request to bifurcate discovery three days before the fact discovery deadline.”
The court extended the fact-discovery deadline to June 14, 2021. It also adjourned the May 21, 2021 pretrial conference to June 25, 2021, at 10:00 a.m., and required the parties’ joint letter by June 17, 2021. The court stated that, upon a joint request, it would be willing to refer the case to Magistrate Judge Gorenstein for a settlement conference.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.