United States District Court, S.D. West Virginia
BRANCH BANKING AND TRUST COMPANY, a North Carolina corporation, Plaintiff,
SERVISFIRST BANK; MBH HIGHLAND, LLC d/b/a HIGHLAND HOSPITAL; WORLD GLOBAL CAPITAL, LLC d/b/a FUNDKITE FUNDING; GREEN CAPITAL FUNDING, LLC; and MCA RECOVERY LLC, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Senior United States District Judge
is a motion to stay discovery, filed June 20, 2019 by
defendants World Global Capital, LLC, Green Capital Funding,
LLC, and MCA Recovery, LLC (collectively the “New York
Branch Banking and Trust Company (“BB&T”)
instituted this interpleader action in the Circuit Court of
Kanawha County, West Virginia on April 5, 2019. The
underlying dispute revolves around competing claims to
certain deposit accounts opened and maintained by defendant
MBH Highland Hospital, LLC (“Highland Hospital”)
at BB&T, with which Highland Hospital maintains its
account at the BB&T branch located at 300 Summers Street,
Charleston, West Virginia. Compl. ¶¶ 9, 15-17, ECF
No. 1-1. As a disinterested stakeholder, BB&T asserts no
claim to the money in Highland Hospital's deposit
accounts. Id. ¶ 22. Rather, BB&T seeks a
court's determination of the proper distribution of the
funds in these accounts among the conflicting claims of the
defendants. Id. ¶¶ 15, 20.
interpleader complaint alleges that Highland Hospital's
ultimate parent company is nonparty Meridian Behavioral
Health Systems, LLC (“MBHS”), whose sole member
is a nonparty individual, Wesley E. Mason III
(“Mason”). Compl. ¶ 2, ECF No. 1-1. In
February 2019, defendants World Global Capital, LLC
(“WGC”) and Green Capital Funding, LLC,
(“GCF”) were each awarded a judgment in the
Supreme Court of the State of New York against Mason and MBHS
and its affiliates, including Highland Hospital. Id.
¶¶ 10-11. On February 27, 2019 and March 1, 2019,
BB&T received two Information Subpoenas with Restraining
Notices in connection with the two New York judgments stating
that $305, 466.91 (WGC) and $834, 001.00 (GCF), respectively,
remained due on the judgments plus interest. Id.
¶¶ 12-13. On March 1, 2019, BB&T also received
a levy and demand on Highland Hospital's deposit
accounts, directing BB&T to remit the sum of $876, 113.65
to GCF. Id. ¶ 14. The interpleader complaint
further alleges that “BB&T has been notified”
by unidentified sources that the funds requested may not
properly belong to WGC or GCF and that ServisFirst Bank
(“ServisFirst”) “may hold a first priority
perfected security interest in all assets of MBHS and its
affiliates, including Highland Hospital, and has filed UCC
financing statements regarding the same.” Id.
has named all of the above-named entities as defendants in
this action. Both Highland Hospital and ServisFirst asserted
crossclaims against the New York Defendants in the state
court action seeking, inter alia, an order
that Highland Hospital possesses a valid claim to the deposit
funds, subject to ServisFirst's perfected security
interest. See ServisFirst's Answer, ECF No. 18; Highland
Hospital's Answer, ECF No. 3.
8, 2019, the New York Defendants removed the interpleader
action to this court. On May 30, 2019, the New York
Defendants filed (1) a motion to dismiss Highland
Hospital's crossclaims for lack of personal jurisdiction
and lack of subject matter jurisdiction, or, in the
alternative, transfer of venue to the Western District of New
York; and (2) a motion to dismiss BB&T's interpleader
complaint for lack of personal jurisdiction, or, in the
alternative, transfer venue to the Western District of New
York. On June 7, 2019, Highland Hospital moved to remand the
case to state court because the New York Defendants failed to
obtain the consent of either Highland Hospital or ServisFirst
before removal. On June 20, 2019, the New York Defendants
filed (1) a motion to stay discovery pending a decision on
the above jurisdictional motions, and (2) a motion to realign
ServisFirst and Highland Hospital as plaintiffs prior to any
determination on whether removal was proper.
parties have filed several additional motions since then: (1)
the New York Defendants filed a motion on June 28, 2019 to
dismiss ServisFirst's crossclaims for lack of subject
matter jurisdiction and for failure to state a claim, or, in
the alternative, transfer venue to the Western District of
New York; (2) BB&T filed a motion on July 12, 2019 to
deposit the interpleader funds with the court; and (3)
BB&T filed a motion on July 26, 2019 requesting leave to
file an amended complaint. In total, there are eight pending
motions in this case.
Rule of Civil Procedure 26(c) provides pertinently as
or any person from whom discovery is sought may move for a
protective order . . . . The court may, for good cause, issue
an order to protect a party or person from . . . undue burden
or expense, including one or more of the following: (A)
forbidding the disclosure or discovery; (B) specifying terms,
including time and place . . . for the disclosure or
discovery . . . .
Fed. R. Civ. P. 26(c).
Rule vests the court with discretion to stay discovery in
advance of deciding a pending dispositive motion.
See Thigpen v. United States, 800 F.2d 393,
396-97 (4th Cir. 1986) overruled on other grounds,
Sheridan v. United States, 487 U.S. 392 (1988)
(“Nor did the court err by granting the
government's motion under Fed.R.Civ.P. 26(c) to stay
discovery pending disposition of the 12(b)(1) motion. . . .
Trial courts . . . are given wide discretion to control this
discovery process . . . .”).
noted by one court, “such a procedure is an eminently
logical means to prevent wasting the time and effort of all
concerned, and to make the most efficient use of judicial
resources.” Coastal States Gas Corp. v. Department
of Energy, 84 F.R.D. 278, 282 (D.C. Del. 1979). The