EX PARTE MOTION OF THIRD-PARTY DEFENDANTS COMMONWEALTH LAND TITLE INSURANCE COMPANY AND LAWYERS TITLE OF NEVADA FOR AN EXTENSION OF TIME TO RESPOND TO THIRD-PARTY PLAINTIFFS ALAN AND THERESA LAHRS' MOTION FOR PARTIAL SUMMARY JUDGMENT

(FIRST REQUEST)

JAMES C. MAHAN, District Judge.

TO THE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD

PLEASE TAKE NOTICE THAT pursuant to Federal Rule of Civil Procedure 6(b)(1) and Local Rules IA 6-1 and 6-2, third-party defendants Commonwealth Land Title Insurance Company ("Commonwealth") and Lawyers Title of Nevada, Inc. ("Lawyers Title") (collectively "Defendants"), by and through their undersigned counsel of record from Early Sullivan Wright Gizer & McRae LLP, will and hereby do move the Court, on an ex parte basis, for an order extending Defendants' time to respond to the Motion for Partial Summary Judgment ("MPSJ") filed by third-party plaintiffs Alan and Theresa Lahrs' (collectively "Plaintiffs" or the "Lahrs") on February 21, 2019. [ECF No. 127]. Defendants' Response to the MP SJ is currently due on March 14, 2019. [ECF No. 127].

As set forth herein, Defendants were only recently added to this litigation after the Lahrs obtained permission from the Court (in December 2018) to file a Supplemental Third-Party Complaint against Commonwealth and Lawyers Title. [ECF No. 113]. Commonwealth and Lawyers Title filed an Answer to the Lahrs' Third Party Complaint only one month ago, i.e., on February 1, 2019. [ECF No. 122]. The Lahrs filed their Motion for Partial Summary Judgment just 20 days later, on February 21, 2019. [ECF 127]. Defendants have not had, and will not have, an adequate opportunity to conduct discovery before Defendants' Response to the MPSJ must be filed on March 14, 2019. Defendants and the Lahrs have not held a Rule 26 meeting and have not made any initial disclosures to each other. There is no scheduling order from the Court setting any deadlines relative to the Lahrs' newly filed Third-Party Complaint. Defendants respectfully request a 75-day extension of time (i.e., to May 28, 2019), to file their Response to the MPSJ. This is Defendants' first request for an extension of time based upon the reasons set forth in this ex parte motion. This ex parte motion is based upon the pleadings and papers on file in this action, the following Memorandum of Points and Authorities, and the concurrently-filed declaration of Sophia S. Lau.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION AND FACTUAL BACKGROUND

Plaintiff Bank of New York Mellon ("BONY") filed its Complaint in this matter naming the Lahrs as defendants on April 11, 2017. [ECF No. 1]. The Lahrs filed a motion to dismiss BONY's Complaint on November 22, 2017. [ECF No. 52]. The Lahrs filed an Answer to BONY's Complaint on July 16, 2018. [ECF No. 75]. Over one year after first appearing in this action, the Lahrs obtained the Court's permission to file a "Supplemental" Third-Party Complaint against Commonwealth and Lawyers Title. [ECF No. 113]. The Lahrs then filed their Third-Party Complaint against Commonwealth and Lawyers Title on December 17, 2018. [ECF No. 114]. The Lahrs' Third-Party Complaint asserts claims for declaratory relief, breach of contract and breach of the implied covenant of good faith and fair dealing (i.e., "bad faith") relating to the Lahrs' acquisition of a policy of title insurance. [ECF No. 114].

Commonwealth and Lawyers Title filed an Answer to the Lahrs' Third-Party Complaint on February 1, 2019. [ECF No. 122]. On February 21, 2019, just twenty days after Defendants filed their Answer, the Lahrs filed their Motion for Partial Summary Judgment ("MPSJ") against Defendants seeking a declaration that they have title insurance coverage for the matters at issue in this litigation. [ECF No. 127]. Among other things, the Lahrs' MPSJ includes declarations from Alan Lahrs and a declaration from an expert retained by the Lahrs concerning the results of a forensic examination he claims to have conducted of the Lahrs' computers. [ECF Nos. 127-129]. The Lahrs' MPSJ involves several key factual disputes concerning, among other things: the Lahrs' knowledge of a critical "Exception" to coverage in the subject title insurance policy; the Lahrs' receipt and understanding of documents that were provided to the Lahrs by Lawyers Title in connection with the issuance of the policy that identify the Exception and advise the Lahrs that it would remain in the policy; whether the Lahrs received the final and correct title insurance policy. In light of these issues, it is imperative that Defendants be given an opportunity to depose the Lahrs and conduct other relevant discovery on the issues presented in the Lahrs' MPSJ. (Declaration of Sophia Lau ("Lau Decl.") at ¶ 2.)

As of the date of the filing of this ex parte motion, the parties have not yet held a conference of counsel or conferred regarding a discovery plan and scheduling order pursuant to Federal Rule of Civil Procedure 26(f). (Id. at ¶ 3.) There is thus no Scheduling Order from the Court pursuant to Federal Rule of Civil Procedure 16(b) governing the Lahrs' Supplemental Third-Party Complaint.1 Nor have Defendants or the Lahrs served their initial disclosures relative to the Lahrs' Supplemental Third-Party Complaint. (Id. at ¶ 4.) Defendants have not yet had an opportunity to obtain discovery from the Lahrs or notice the depositions of the Lahrs and the technology specialist (whose declaration, along with that of Alan Lahrs) was submitted in in support of the Lahrs' MPSJ. (Id. at ¶ 5.) Defendants are in the process of drafting their initial discovery to the Lahrs; however, given that the Lahrs would have 30 days in which to provide responses, the need to conduct follow-up discovery from the Lahrs and third parties, and to complete the appropriate depositions, there is no way to conduct the required discovery and prepare and file a Response to the Lahrs' Motion for Partial Summary Judgment by March 14, 2019. (Id. ¶ at 6.) Under the circumstances, a reasonable continuance of the deadline for Defendants to file their Response is warranted and appropriate.

In light of the foregoing, on Monday, February 25, 2019, Defendants requested that the Lahrs stipulate to continue the due date for filing Defendants' Response to the Lahrs' MPSJ for a period of at least 75 days to afford Defendants an opportunity to conduct discovery and prepare a meaningful Response. (Id. at ¶ 7 and Ex. A thereto.) On Tuesday, February 26, 2019, the Lahrs' counsel advised that he would not grant Defendants an extension to file the Response and informed Defendants they could "run to the judge as you have said you would do here." (Id. at ¶ 8, Ex. A.) This e-mail exchange precipitated the filing on the instant ex parte motion.

II. GOOD CAUSE EXISTS TO GRANT THIS EX PARTE MOTION

Federal Rule of Civil Procedure 6(b)(1)(A) provides "[w]hen an act may or must be done within a specified time, the court may, for good cause, extend the time . . . if a request is made, before the original time or its extension expires." "Good cause" is a non-rigorous standard that has been construed broadly across procedural and statutory contexts. See Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1258-59 (9th Cir. 2010) (Fed. R. Civ. P. 6(b)(1) is to be liberally construed to effectuate the general purpose of seeing that cases are tried on the merits); see also Dayton Valley Investors, LLC v. Union Pac. R.R. Co., 664 F.Supp.3d 1174, 1179 (D. Nev. 2009) (finding good cause for allowing a late filed opposition to a motion for summary judgment under Fed. R. Civ. P. 6(b)(1) in light of the Ninth Circuit's preference for adjudicating cases on the merits). Consequently, requests for extensions of time made before the applicable deadline has passed should "normally . . . be granted in the absence of bad faith on the part of the party seeking relief or prejudice to the adverse party." California Trout v. F.E.R.C., 572 F.3d 1003, 1027 (9th Cir. 2009) (citing 4B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1154 (3d ed. 1998)).

Good cause exists to grant Defendants' requested extension of time to file a Response to the Lahrs' MPSJ because Defendants only recently appeared in this case (on February 1, 2019) and the Lahrs filed their MPSJ just twenty days later, on February 21, 2019. The Lahrs appeared in this action in 2017 and have actively litigated this case over a year prior to Defendants' entry into the litigation. As evidenced by the Lahrs' MPSJ and supporting exhibits and declarations, the Lahrs have had the opportunity to conduct discovery, including expert discovery, and gather evidence in support of their motion. By contrast, Defendants were in the process of reviewing the pleadings filed in this action, their clients' documents, and preparing discovery to propound on the Lahrs when they were served with the MPSJ. Without the ability to conduct discovery on the Lahrs' claims against Defendants and the arguments and evidence advanced in their MPSJ, including the opportunity to depose the Lahrs and their expert, Defendants will not be able to meaningfully oppose and respond to the Lahrs' MPSJ. For example, Defendants will not have the ability to rebut the Lahrs' primary contention in their motion that they never received the operative policy at issue in their Supplemental Third-Party Complaint. An extension of time for Defendants to respond to the Lahrs' motion is therefore necessary to enable Defendants to obtain the evidence in support of their defense and refute the Lahrs' claims against them. Defendants' requested extension would ensure the parties' case is tried on the merits in accordance with the general purpose of Fed. R. Civ. P. 6(b)(1). See Program Engineering, Inc. v. Triangle Publications, Inc., 634 F.2d 1188, 1193 (9th Cir. 1980) (generally where a party has had no previous opportunity to develop evidence and the evidence is crucial to material issues in the case, discovery should be allowed before the trial court rules on a motion for summary judgment).

Further, Defendants do not seek this continuance for any improper purpose and there is no prejudice that will result to the Lahrs should the Court grant the requested extension as they only recently filed their Supplemental Third-Party Complaint. Defendants reached out to the Lahrs' counsel and sought a stipulation for a reasonable extension of time to file the Response promptly after receiving the Lahrs' MPSJ. (Lau Decl. at ¶¶ 7-8, Ex. A.) In requesting the stipulation, Defendants explained the reasons necessitating the extension in light of Defendants very recent entry into the ongoing litigation. (Id.) However, Plaintiffs refused Defendants' request to stipulate to an extension because, in Plaintiffs' view, Defendants do not need to conduct any discovery to respond to Plaintiffs' motion. (Id.) As detailed above, this is not true as motions for summary judgment are evidentiary in nature and the central issues at issue in the Lahrs' MPSJ involve disputed factual issues. In addition, no prejudice will occur to the Lahrs if the Court grants the Defendants' requested extension. Defendants seek an extension that will not cause any unnecessary or material delay to this litigation nor will the extension cause any party to run afoul of any deadlines or scheduling orders currently set in this case. In reality, it is Defendants who will be prejudiced by having to respond to the Lahrs' motion by the present deadline without the ability to present facts essential to justify its opposition.

The relief Defendants seek may be sought ex parte. As noted above, when Defendants asked the Lahrs to stipulate to an appropriate extension of its responsive deadline, they refused. Even if Defendants had brought a regularly-noticed motion for an extension on February 26, 2019, Plaintiffs would then have 14 days to file a response to the motion, and Defendants would have five days to file a reply in support of the motion on March 18, 2019. See Local Rule 7-2(b). Therefore, the motion would not be fully briefed or ruled on until after Defendants' deadline to respond to Plaintiffs' MPSJ.

Accordingly, taking into account the foregoing, an additional 75-days (or until May 28, 2019) for Defendants to respond to the Lahrs MPSJ is reasonable. This extension will permit Defendants to propound written discovery, receive an evaluate Plaintiffs' responses to written discovery 30 days later, take depositions, receive an evaluate the transcripts of those depositions and, following receipt of evidence and testimony in support of their defense position, sufficiently address and rebut the multiple substantive arguments raise in Plaintiffs' dispositive motion for partial summary judgment. Defendants have not previously requested an extension of time to respond to Plaintiffs' motion for partial summary judgment from the Court. (Lau Decl. at ¶ 9.)

III. CONCLUSION

Defendants respectfully request that the Court grant their ex parte motion and issue an order extending Defendants time to respond to Plaintiffs' motion for partial summary judgment by 75-days to May 28, 2019.

ORDER

IT IS SO ORDERED:

Third-party defendants Commonwealth and Lawyers Title shall have until May 28, 2019 to file their Response to the motion for partial summary judgment filed by third-party plaintiffs Alan and Theresa Lahrs [ECF No. 127].

DECLARATION OF SOPHIA S. LAU IN SUPPORT OF THIRD-PARTY DEFENDANTS COMMONWEALTH LAND TITLE INSURANCE COMPANY AND LAWYERS TITLE OF NEVADA, INC.'S EX PARTE MOTION FOR AN EXTENSION OF TIME TO RESPOND TO THIRD-PARTY PLAINTIFFS ALAN AND THERESA LAHRS' MOTION FOR PARTIAL SUMMARY JUDGMENT

DECLARATION OF SOPHIA S. LAU

I, Sophia S. Lau, declare and state as follows:

1. I am an attorney at law duly admitted to practice before the courts of the State of Nevada and am a partner in the law firm of Early Sullivan Wright Gizer & McRae LLP, counsel for third-party defendants ("Commonwealth") and Lawyers Title of Nevada, Inc. ("Lawyers Title") (collectively "Defendants"), in the above-entitled action. I make this declaration in support of the concurrently-filed ex parte motion for an extension of time to respond to the Motion for Partial Summary Judgment ("MPSJ") filed by third-party plaintiffs Alan and Theresa Lahrs' (collectively, "Plaintiffs" or the "Lahrs") on February 21, 2019. I have personal knowledge of the matters set forth below and if called as a witness could testify competently thereto.

2. Defendants were only recently added as third-party defendants in this litigation by way of the Supplemental Third-Party Complaint filed by the Lahrs on December 17, 2018. [ECF No. 114]. Commonwealth and Lawyers Title filed an Answer to the Lahrs' Third-Party Complaint on February 1, 2019. [ECF No. 122]. On February 21, 2019, just twenty days after Defendants filed their Answer, the Lahrs filed their Motion for Partial Summary Judgment ("MPSJ") against Defendants seeking a declaration that they have title insurance coverage for the matters at issue in this litigation. [ECF No. 127]. The Response to the MPSJ is currently due on March 14, 2019. Among other things, the Lahrs' MPSJ includes declarations from Alan Lahrs and a declaration from an expert retained on behalf of the Lahrs concerning the results of a forensic examination he conducted of Alan Lahrs computer. [ECF Nos. 127-129]. The Lahrs' MPSJ involves several key factual disputes concerning, among other things: the Lahrs' knowledge of a critical "Exception" to coverage in the subject title insurance policy; the Lahrs' receipt and understanding of documents that were provided to the Lahrs by Lawyers Title in connection with the issuance of the policy that identify the Exception and advise the Lahrs that it would remain in the policy; whether the Lahrs received the final and correct title insurance policy. In light of these issues, it is imperative that Defendants be given an opportunity to depose the Lahrs and conduct other relevant discovery on the issues presented in the Lahrs' MPSJ.

3. As of the date of the filing of Defendants' ex parte motion, the parties have not yet held a conference of counsel or conferred regarding a discovery plan and scheduling order pursuant to Federal Rule of Civil Procedure 26(f).

4. The parties have also not received a scheduling order from the Court pursuant to Federal Rule of Civil Procedure 16(b) relative to the new pleading (the Third-Party Complaint) filed by the Lahrs, nor have the Lahrs or Defendants served their initial disclosures in connection with the Third-Party Complaint.

5. Defendants have not yet had an opportunity to propound discovery to the Lahrs or notice the depositions of the Lahrs and the expert they rely on in support of their motion for partial summary judgment.

6. Defendants are in the process of drafting their initial discovery to the Lahrs; however, given that the Lahrs would have 30 days in which to provide responses, the need to conduct follow-up discovery from the Lahrs and third parties, and to complete the appropriate depositions, there is no way to conduct the required discovery and prepare and file a Response to the Lahrs' motion for partial summary judgment by March 14, 2019.

7. After receiving the Lahrs' motion for partial summary judgment, on February 25, 2019 our office requested that the Lahrs' counsel stipulate to continue the due date for Defendants' Response to the Lahrs MPSJ for a period of at least 75-days to afford Defendants an opportunity to conduct discovery and meaningfully prepare the Response. A true and correct copy of the e-mail request is attached hereto as Exhibit A.

8. On February 26, 2019, the Lahrs' counsel responded that he would not grant Defendants the requested extension and informed Defendants they could "run to the judge as you have said you would do here." A true and correct copy of the February 26, 2019 email response from the Lahrs' counsel is included in the e-mails attached hereto as Exhibit A.

9. Defendants have not previously requested an extension of time to respond to Plaintiffs' motion for partial summary judgment from the Court.

I declare under penalty of perjury under the law of the United States of America and the State of Nevada that the foregoing is true and correct.

Exhibit A

I can't agree to as much Chris as this issue causes my clients tremendous stress, i.e., this is their home in which they reside, and Commonwealth has been dragging its feet on this issue since early 2017 when we tendered their ALTA title policy to it for defense and coverage. Indeed, we tendered on May 18, 2017, and did not receive a coverage explanation, i.e., `reservation of rights' letter, until October 27, 2017, sans your version of the policy you claim applies here. We finally got that fabricated policy the next month by email from Emily Heidbreder, a version never received by my clients, a `fact' we have also confirmed forensically now, too, as you know. Moreover, defense counsel didn't even enter his appearance on their behalf in this case until 1/5/18, after discovery had already expired, and then failed to even disclose these policies as required by law, meaning the rules (FRCP 26). You can only imagine what my clients think here.

Indeed, we also have asked for proof from your side showing that my clients received the policy you claim applies here, as well as to share our expert's report showing that they did not, and Commonwealth declined both of these mitigation offers. In short Commonwealth is probably in `bad faith' here but for its continued tender of a defense on their behalf to this case. If it is not going to withdraw that defense as it has threatened to do, then we may be able to consider your request here—let me know—or you can always run to the judge as you have said you would do here.

Finally, and on that note, what discovery do you need when Commonwealth has yet to even make a prima-facie showing that the policy it asserts here was ever delivered to the Lahrs, by mail, email or otherwise? Your client is still fishing, fabricating or both here as its mistake—or that of Lawyers Title of Nevada—is readily evident from the exhibits attached to our motion, i.e., they never preserved `Exception to Coverage' No. 48 in the ALTA Policy they delivered to my clients (that Policy containing only Nos. 1-47).

Let me know if you think we can find some middle ground here short of court intervention, but I can't agree to this `professional courtesy' request over the objection of my client for the reasons above, notwithstanding NRPC 3.2(b), at least not at this time and under these conditions.

Thx Chris.

We have received the Lahrs' Motion for Partial Summary Judgment. As you know, Commonwealth was only recently added to this litigation and we filed an Answer to the Third Party Complaint just a few weeks ago. We have not yet had an opportunity to conduct discovery. Our Response to the Motion is presently due March 14, 2019. Please let me know if you will stipulate to continue the due date for our Response for a period of at least 75 days. If you will not stipulate, we intend to seek appropriate relief from the Court.

Please let me know as soon as possible.

Thank you, Chris Ritter CHRISTOPHER I. RITTER I PARTNER Early Sullivan Wright Gizer & McRae LLP 323.301.4660 Main 323.761.7906 Direct 323.301.4676 Fax 6420 Wilshire Blvd., 17th Floor, Los Angeles, CA 90048 critter@earlysullivan.com

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