United States District Court, N.D. West Virginia
SPIRIT COMMERCIAL AUTO RISK RETENTION GROUP, SANDEEP BADWALSIGH and INDY FREIGHT, INC., Plaintiffs,
RANDALL RYAN SHREVE, KASEE RENEE PORTER, GERRY W. HARRIS, JR., MATTHEW JOSEPH PITZER, AARON JACKSON, KAREN N. BARNETT, CYNTHIA G. DRANE, DAVID WESTON, FREDERICK DEAN CONNORS, WILLIAM A. HEINBAUGH, ANGELA R. AUBIHIL, VICKY L. POSEY, JESSICA LEIGH ALLEN, ROBERT S. POWERS, JODI SHACKELFORD, JEFFREY DOUGLAS SHACKELFORD, ANDREW J. ZEIGER, SANDRA L. HEINBAUGH, WILLIAM HEINBAUGH, N.K., a minor, M.A., a minor, PAMELA LIPSCOMB, DIANA SHACKELFORD, BETHANI A. SHACKELFORD, ELIZABETH BARNETT, BROOKE N. DRANE, TIERRA N. BRAWNER, TREY M. BRAWNER, TERENCE D. BRAWNER, BOBBY JO WESTON, E.W., a minor, B.W., a minor and BRUCE DAVIDSON, Defendants.
ORDER REGARDING PAYMENT OF SPECIAL MASTER AND
GUARDIAN AD LITEM FEES
FREDERICK P. STAMP, JR. UNITED STATES DISTRICT JUDGE.
above-styled civil action is an interpleader action arising
out of a twenty plus motor vehicle and tractor trailer
accident that occurred on March 13, 2016. At the request of
the parties, this Court appointed a Special Master in the
above-styled civil action, Stephen J. Dalesio, Esq.
(hereinafter “Special Master”), for the purposes
of apportioning and distributing the remaining policy limits
to the claimants in the form of confidential and binding
arbitration awards and the discharge of liability on the part
of the plaintiffs Spirit Commercial Auto Risk Retention Group
(“Spirit Commercial”), Indy Freight, Inc.
(“Indy Freight”), and Sandeep
Badwalsingh (“Badwalsingh”). Further, this
Court appointed Guardians Ad Litem, Jeffery D. Kaiser, Esq.,
and Ryan P. Orth, Esq. ECF No. 64.
before this Court is the Special Master's motion for an
order requiring plaintiffs Indy Freight and Sandeep
Badwalsingh to pay the plaintiffs' portion of the Special
Master's fees. ECF No. 84. The motion is fully briefed
and ripe for decision.
April 26, 2019, the court-appointed Special Master in the
above-styled civil action filed a motion for an order
requiring plaintiffs Indy Freight and Badwalsingh to pay the
Special Master's fees in the amount of $11, 920.85. ECF
No. 84. The Special Master's requested fee represents the
plaintiffs' portion of the fees still owed in connection
with the apportionment and distribution of insurance proceeds
in this interpleader action. Id. at 1. The Special
Master states that he has forwarded his invoice for services
in this case to plaintiffs' counsel and requested that
plaintiffs pay their agreed upon 50% of the Special
Master's fees. Id. at 3. The Special Master
notes that he has received full payment from the defendants
for their share of the Special Master's fees.
Id. at 4. The Special Master adds that he has made
attempts to collect the remaining fees owed to him by the
plaintiffs in connection with his work in this case, but has
still not received any payment. Id. Further, the
Special Master states that he was notified on February 5,
2019, that Spirit Commercial Auto Risk Retention Group filed
for bankruptcy protection and/or receivership. Id.
The Special Master asserts that he forwarded his invoice for
his services in connection with this case to plaintiffs'
counsel on November 21, 2018, over sixty days prior to being
notified of Spirits Commercial's receivership.
Id. The Special Master asserts that plaintiffs Indy
Freight and Badwalsingh are not the subject of any bankruptcy
proceeding or receivership, and pursuant to the parties'
agreement, are responsible and liable for plaintiffs'
portion (50%) of the Special Master's fees incurred in
this case totaling $11, 920.85. Id. In support, the
Special Master contends that these plaintiffs have received
the benefits of the Special Master's work in connection
with this case but have not complied with their agreement to
pay 50% of the fee due and owing in this case. Id.
then filed a response in opposition to the Special
Master's motion. ECF No. 87. As an initial matter,
“[p]laintiffs request that the court hold Oral
Argument on the pending motions of the special master to
allow counsel to address the court and advocate on behalf
Indy Freight and Mr. Badwalsingh, both of whom are innocent
bystanders to the placement of Spirit into
receivership.” ECF No. 87 at 1. Plaintiffs oppose the
Special Master's motion stating that “[w]hen the
agreement was reached to split the Special Masters' fees
the obligation to do so was agreed to by a representative of
Spirit. Mr. Badwalsingh and Indy Freight did not personally
agree to this arrangement.” Id. at 2. It is
the plaintiffs' position that the Special Master's
fees are fees incurred by Spirit, which Spirit agreed to pay
and that the Special Master's fees are not fees incurred
by plaintiffs Indy Freight or Sandeep Badwalsingh, and
neither Indy Freight nor Sandeep Badwalsingh agreed to pay
such fees on either an individual or several basis.
Id. at 3. Moreover, even if such fees were to be
taxed against either Indy Freight or Sandeep Badwalsingh,
plaintiffs contend that the fees are within the supplementary
payments covered by the Spirit Commercial automobile
liability policy. Id. Plaintiffs further add that
“to the extent that Spirit is not available to pay any
remaining expenses in this case, including the Special Master
fees and Guardian Ad Litem fees, then the expenses should
have been awarded out of the interpleader fund and not taxed
against Plaintiffs Indy Freight, Inc. and Sandeep
Badwalsingh.” Id. Plaintiffs assert that
“[t]o grant the motion of the Special Master would be
inequitable in that Indy Freight and Mr. Badwalsingh's
only recourse would be to file a lawsuit against the party
that is responsible for the fees, Spirit, which they cannot
do as a result of the Order establishing the
receivership.” Id. at 4.
reply, the Special Master states that he “does not
believe that oral argument is necessary concerning this
motion and believes that oral argument will only
unnecessarily increase the time and cost associated with this
matter.” ECF No. 88. The Special Master also argues
that “[n]otwithstanding that this is an interpleader
action, the fact remains that this Court ordered
‘Plaintiffs' to pay the Special Master's fees
associated with his work in connection with this case and
Indy Freight, Inc. and Sandeep Badwalsingh are
Plaintiffs.” Id. at 1. The Special Master
contends that it is therefore equitable to require these
plaintiffs to pay the Special Master's fees, and asserts
that “[t]he fact that these expenses should be covered
by insurance is not relevant to the Special master's
motion” and “[t]he contractual obligation of
Spirit to pay costs and fees incurred by the Plaintiffs is a
matter between Spirit and Indy Freight, Inc. and Sandeep
Badwalsingh and not a matter between Plaintiffs and the
Special Master.” Id. at 2.
the briefing of the Special Master's motion regarding
payment of fees, plaintiffs then filed a motion to withdraw
docket entries ECF No. 85 and ECF No. 89, docket entry ECF
No. 87 in part, and to stay this civil action. ECF No. 90.
Plaintiffs withdraw their earlier motions in accordance with
the permanent injunction entered in the Nevada state court
and request that this matter be stayed until the liquidation
of Spirit is resolved and claims are submitted pursuant to
the receiver's procedure. Id. at 4-5.
Special Master filed a response to the plaintiffs' motion
to withdraw stating that he “takes no position”
as to plaintiffs' request to withdraw their own earlier
motions and responses but adds that he does oppose the
imposition of a stay in this case in that the only remaining
matter in this case is the Special Master's motion for
collection of fees from the two non-bankrupt plaintiffs and,
thus, a stay is not required. ECF No. 91.
issue before the Court is not easily decided on equity alone,
but rather, hinges on this Court's interpretation of its
own previous order which was entered prior to the notice of
receivership and reiterated the unambiguous agreement of the
parties regarding payment of the Special Master and Guardian
Ad Litem fees in this civil action. This Court has the
inherent authority and discretion to interpret its own
orders, and such interpretation warrants customary appellate
deference. In re Tomlin, 105 F.3d 933, 941 (4th Cir.
1997); Anderson v. Stephens, 875 F.2d 76, 80 n.8
(4th Cir. 1989). In doing so, this Court finds that the
plaintiffs Indy Freight and Badwalsingh are required to pay
50% of the Special Master's fees in this civil action
pursuant to the agreement of the parties and this Court's
previous order directing “plaintiffs” to pay 50%
of the Special Master's fees. ECF No. 78 at
Indy Freight and Badwalsingh are named plaintiffs in this
civil action, not simply nominal parties, and have received
the benefits of the Special Master's work in connection
with this civil action, including releases executed by the
defendant claimants. Upon review, although this Court is
sympathetic to the equitable argument made by plaintiffs Indy
Freight and Badwalsingh, this Court finds that plaintiffs
Indy Freight and Badwalsingh are required to pay the
plaintiffs' portion (50%) of the Special Master's
fees incurred in this civil action pursuant to the agreement
of the parties and this Court's order.
for the same reasons as stated above, this Court also finds
that the plaintiffs are required to pay the Guardians Ad
Litem, Jeffery D. Kaiser, Esq. and Ryan P. Orth, Esq., the
fees this Court previously approved as fair and reasonable.
ECF No. 78 at 4. Accordingly, plaintiffs Indy Freight and
Badwalsingh are directed to pay the same, as agreed by the
parties and as ordered by this Court. Id.
extent the plaintiffs' motion requests a stay of this
civil action and requests oral argument, the motion is
denied. Only in “unusual circumstances” may a
court “properly stay proceedings against non-bankrupt
codefendants of the bankrupt debtor.” Credit
Alliance Corp. v. Williams, 851 F.2d 119, 121 (4th Cir.
1988) (citing A.H. Robins Co. v. Piccinin, 788 F.2d
994 (4th Cir. 1986). This Court believes that such unusual
circumstances do not exist in this case, particularly in
light of the fact that the non-bankrupt plaintiffs Indy
Fright and Badwalsingh are independently liable to the
Special Master for plaintiffs' portion of the outstanding
fees. As to the plaintiffs' request for oral argument,
this Court finds that the facts and legal contentions are
adequately presented in the materials before this Court and
argument would not aid the decisional process.
the Special Master's motion for an order requiring
plaintiffs Indy Freight and Sandeep Badwalsingh to pay
plaintiffs' portion of the Special Master's fees (ECF
No. 84) is GRANTED. Plaintiffs Indy Freight and Sandeep
Badwalsingh are hereby ORDERED to pay the Special Master,
Stephen J. Dalesio, Esq., the plaintiffs' portion of the
Special Master's fees incurred in this case in the amount
of $11, 920.85. Plaintiffs Indy Freight and Sandeep
Badwalsingh are hereby further ORDERED to pay the Guardians
Ad Litem, Jeffery D. Kaiser, Esq., in the amount of $1,
275.00 and Ryan P. Orth, Esq., in the amount of $2, 357.11.
motion to withdraw (ECF No. 90) is GRANTED as to
plaintiffs' motion for an order directing receiver to pay
Special Master and Guardian Ad Litem fees (ECF No. 85),
plaintiffs' response in opposition (ECF No. 87), in part,
and plaintiffs' motion for an order to show cause (ECF
No. 89), and the same are hereby ORDERED WITHDRAWN. To the
extent the plaintiffs' motion is a motion to stay or
requests oral argument, the motion (ECF No. 90) is DENIED.
it is ORDERED that this civil action be, and the same is
hereby, DISMISSED WITH PREJUDICE and retired from the docket
of this Court, subject to reopening on motion of ...