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Portscher v. Ohio Industries

March 16, 2007

GERHARD A. PORTSCHER AND BONNIE JOY PORTSCHER, HIS WIFE, PLAINTIFFS,
v.
OHIO INDUSTRIES, INC. AND MEGA-LIFT, INC., DEFENDANTS.



The opinion of the court was delivered by: John T. Elfvin S.U.S.D.J.

MEMORANDUM and ORDER*fn1

Plaintiffs Gerhard A. Portscher and Bonnie Joy Portscher ("Plaintiffs") commenced this products liability action against defendants Ohio Industries, Inc., ("Ohio") and Mega-Lift, Inc., ("Mega-Lift") seeking to recover damages for an injury Gerhard Portscher suffered during the course of his employment while operating a forklift allegedly designed, manufactured and/or distributed by Ohio and/or Mega-Lift. Although this action has been pending for six years, progress has been stalled due to Ohio's bankruptcy proceedings and the accompanying automatic stay. Pending before the Court is Plaintiffs' Motion to Sever their claims and Mega-Lift's cross-claims against Ohio so that Plaintiffs may proceed with their claims against Mega-Lift. Also pending is Mega-Lift's Motion to lift the bankruptcy stay as to Ohio. Further complicating matters is the fact that the law firm of Damon & Morey, LLP, Ohio's counsel, has filed a Motion to Withdraw as Counsel.

A. Motion to Lift Stay

Mega-Lift seeks an Order of this Court removing the automatic bankruptcy stay as to Ohio. As outlined by Mega-Lift, the bankruptcy proceedings against Ohio commenced in May 2001 in the Northern District of Ohio.*fn2 After certain creditors filed an involuntary bankruptcy proceeding, the Receiver for Ohio sought to and did sell some of Ohio's most valuable product lines. Mega-Lift asserts that one such product line, the Ohio Locomotive Crane and American Locomotive Crane businesses, were sold to ERS Industries, Inc., and re-named American & Ohio Locomotive Crane.*fn3 Mega-Lift asserts that ERS Industries, Inc. and American & Ohio Locomotive Crane is in the business of designing, manufacturing and selling cranes.*fn4

Mega-Lift seeks to lift the bankruptcy stay so that it may conduct discovery of any remnants of Ohio, ERS Industries, Inc. and its American & Ohio Locomotive Crane entity. Mega-Lift asserts that the discovery "is not to be obtained for the purpose of obtaining a judgment or award against Ohio Industries, but rather for Mega-Lift to obtain information necessary to defend this action." Pezzulo Affirm.

¶21. Mega-Lift does not specify what information or categories of information it requires from Ohio in order to defend against Plaintiffs' claims.

The question of whether the bankruptcy stay should be lifted is one to be determined by the bankruptcy court. See 11 U.S.C. §362(d). As the bankruptcy is pending in the United States Bankruptcy Court for the Northern District of Ohio, this Court cannot grant the relief Mega-Lift seeks and Mega-Lift's Motion is therefore denied without prejudice to Mega-Lift's seeking such relief from the appropriate court.

B. Motion to Sever Claims and Cross-Claims against Ohio Plaintiffs'

Motion seeks an order from the Court severing their claims, and Mega-Lift's cross-claims against Ohio.*fn5 At oral argument, however, Plaintiffs' counsel stated that they seek an "order of discontinuance" as to Ohio.*fn6 In support of their Motion, Plaintiffs provide only the affidavit of their attorney, Joseph DeMarie, in which he asserts "upon information and belief" that Ohio no longer exists and that whatever assets it had "may have been sold off by the Bankruptcy Court." DeMarie Aff. ¶7. Plaintiffs further assert that "by reason of the dissolution of Ohio %%% it is no longer a proper party %%%." Id. ¶9.

Mega-Lift opposes the Motion to Sever and argues that it will be prejudiced should the claims against Ohio be severed before it can obtain discovery from Ohio. Mega-Lift asserts that once the claims against Ohio are severed, neither Ohio nor any of its employees would be subject to discovery in this action.*fn7

The decision whether to sever a party or a claim is within the broad discretion of the district court. See Smith v. Lightning Bolt Productions, Inc., 861 F.2d 363, 370 (2d Cir. 1988). In making such a determination, the court considers (1) whether the issues sought to be tried separately are significantly different from one another, (2) whether the separable issues require the testimony of different witnesses and different documentary proof, (3) whether the party opposing the severance will be prejudiced if it is granted, and (4) whether the party requesting the severance will be prejudiced if it is not granted. German v. Federal Home Loan Mortgage Corp., 896 F. Supp. 1385, 1400 (S.D.N.Y. 1995). The Court also evaluates whether severance will further the aims of justice and fairness and will promote judicial economy while avoiding the cumulative presentation of evidence. See In re Merrill Lynch & Co., Inc. Research Reports Securities Litig., 214 F.R.D. 152, 155 (S.D.N.Y. 2003).

Notably absent from Plaintiffs' Motion is any discussion of the law pertaining to severance or any analysis as to how the facts in this case demonstrate the propriety of the proposed severance. Plaintiffs have failed to address any of the factors to be considered on such a Motion. The Court has no information before it, other than the allegations in the Amended Complaint, as to the similarity or dissimilarity of the claims against Ohio and Mega-Lift or the similarity or dissimilarity of the evidence relevant to the claims. In fact, Plaintiffs have failed to even allege that they will be prejudiced in any fashion by the denial of a severance.*fn8

Plaintiffs' Amended Complaint alleges in part that:

"6. Upon information and belief, at all times relevant, defendant OHIO, manufactured, sold and/or leased a forklift truck under the name and style of Autolift to the co-defendant, MEGA-LIFT, INC. "7. On March 15, 1999 while in the course of his employment, GERHARD A. PORTSCHER was operating said forklift owned and ...


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