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Axa Equitable Life Insurance Co., et al v. Infinity Financial Group

February 23, 2012


The opinion of the court was delivered by: Daniel T. K. Hurley United States District Judge


THIS CAUSE comes before the Court upon the motions of Plaintiffs GIII Accumulation Trust ("GIII") to lift the stay on this action as a whole [DE # 225] and of AXA Equitable Life Insurance Company ("AXA") to lift the court-ordered stay of arbitration [DE # 226].


On July 22, 2008, the Court consolidated the AXA case with that of GIII. [DE # 188]. On March 31, 2009, the Court granted Defendant's motion to compel arbitration and stay litigation with respect to AXA's claims. [DE # 153]. Subsequently, on August 26, 2010, the Court entered an order staying trial pending resolution of then-ongoing state criminal proceedings against Defendant Steven Brasner relating to the same operative facts as the instant litigation. [DE # 215]. Finally, on December 2, 2010, the Court stayed arbitration proceedings with AXA. [DE # 220]. With respect to each stay, the Court based its decision on the possibility that in defending the instant action Brasner would be required to make admissions that might be used against him in the criminal case.

The Court concluded that this conflict placed too great a burden on Brasner's privilege against self-incrimination under the Fifth Amendment. U.S. Const. amend. V.

The instant motions contend that the criminal proceedings against Brasner have concluded and that the Court should therefore lift the stays in this action. Defendant disagrees, stating that although he has already pleaded guilty and been sentenced he is still subject to penalties such that defending this action would burden his privilege against self-incrimination. Having reviewed the parties' arguments, the Court finds that the stays should be lifted.


1. The Fifth Amendment Does Not Require a Stay in this Action "[T]he Fifth Amendment is violated when a person, who is a defendant in both a civil and a criminal case, is forced to choose between waiving his privilege against self-incrimination or losing the civil case on summary judgment." United States v. Premises Located at Route 13, 946 F.2d 749, 756 (11th Cir. 1991). "However, to trigger this rule, the invocation of the privilege must result in an adverse judgment, not merely the loss of 'his most effective defense.'" Id. (quoting Pervis v. State Farm Fire & Casualty Co., 901 F.2d 944, 947 (11th Cir. 1990)). "[T]he rule applies when the invocation of the privilege would result in 'automatic entry of summary judgment.'" Id. (quoting Pervis, 901 F.2d at 949)). Otherwise, "the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them." Baxter v. Palmigiano, 425 U.S. 308, 318 (1976).

Although Brasner argues that if the stay is lifted he "will be forced to waive his privilege against self-incrimination or lose this case," Def.'s Resp. to Pl.'s Mot. to Lift Stay of Arbitration, 8 [DE # 228], he does not explain how assertion of the privilege would trigger "automatic entry of summary judgment." Pervis, 901 F.2d at 949. The Court finds that it would not. At most, refusal to answer may preclude Brasner's "most effective defense," which is permissible. Id. at 947. Regardless of Brasner's decision, Plaintiffs would still have an affirmative duty to prove the elements of the various causes of action asserted. In no case could they rely solely on Brasner's invocation of the privilege to procure summary judgment. For this reason, lifting the stays would not constitute a violation of Brasner's Fifth Amendment rights.

2. Whether to Enter or Lift a Stay Is Within the Court's Discretion Because Brasner's constitutional rights are not at issue and no other "special circumstances" exist, whether to lift the stays in this action is discretionary. United States v. Kordel, 397 U.S. 1, 11-12 (1996); see also Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).

[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition fo the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.

Id. In exercising this discretion, the Court will consider both the facts of this case and the public interest. Sec. & Exch. Comm'n v. Incendy, 936 F. Supp. 952, 955 (S.D. Fla. 1996).

Brasner points to two circumstances supporting maintenance of the stay. First, Brasner argues that defending this action may expose him to additional punishment in the state criminal action because under Florida law his sentence of probation is not a final adjudication and may be reconsidered, at which time admissions made in this action could affect his criminal sentence. Second, Brasner argues that defending this action could result in ...

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