Toll Brothers, Inc. et al v. Gu et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 25-cv-02884-PAB-CYC
TOLL BROTHERS, INC., a Delaware Corporation;
TOLL SOUTHWEST LLC, a Delaware Limited Liability Company; and
TB PROPRIETARY CORP., a Delaware Corporation;
Plaintiffs,
v.
JEFFREY GU, an individual,
Defendant.
TOLL BROTHERS LLC, a Colorado Limited Liability Company;
TB PROPRIETARY CORP LLC, a Colorado Limited Liability Company;
TOLL ARCHITECTURE LLC, a Colorado Limited Liability Company;
TOLL HOLDINGS LLC, a Colorado Limited Liability Company;
TB PROPRIETARY CORP., a Colorado Corporation;
TOLL ARCHITECTURE, INC, a Colorado Corporation;
TOLL BROTHERS, INC, a Colorado Corporation; and
TOLL SOUTHWEST LLC, a Wisconsin Limited Liability Company.
Nominal Defendants.
_____________________________________________________________________________
ORDER
_____________________________________________________________________________
Cyrus Y. Chung, United States Magistrate Judge.
The counterclaim defendants request a stay of discovery pending resolution of their
pending dispositive motions. ECF Nos. 96, 106, 125, 129, 132, 140, 142, and 145. For the
reasons that follow, the motion to stay, ECF No. 158, is GRANTED.
BACKGROUND
This case was initiated by the plaintiffs on September 12, 2025. ECF No. 1. They assert
that defendant Jeffrey Gu created seven entities in Colorado with names similar to those of the
plaintiffs because he is dissatisfied with a home he purchased. Id. ¶ 2. As a result, they seek a
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declaratory judgment and bring trademark infringement, unfair competition, and
misappropriation of business value claims against him. Id. ¶¶ 59–84. In response, Gu filed an
answer that included a counterclaim against thirteen counterclaim defendants. ECF No. 17 at 15–
16. Eleven of the counterclaim defendants seek a stay of discovery while the Court considers
pending dispositive motions. One of those motions argues that the counterclaims asserted against
Risewell Homes Inc. must proceed through arbitration. ECF No. 132 at 1–15. The other motions
argue a variety of grounds including that Gu lacks standing, ECF No. 125 at 7–8, and that certain
parties are entitled to immunity, ECF No. 96 at 2–12, both of which are jurisdictional issues.
DISCUSSION
The Federal Rules of Civil Procedure do not expressly provide for a stay of proceedings.
However, Rule 26(c) permits the Court, upon a showing of good cause, to “protect a party or
person from annoyance, embarrassment, oppression, or undue burden or expense,” Fed. R. Civ.
P. 26(c), and Rule 1 instructs that the rules of procedure “shall be construed and administered to
secure the just, speedy, and inexpensive determination of every action.” Fed. R. Civ. P. 1.
Moreover, “the power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254 (1936). An order staying
discovery is thus an appropriate exercise of this Court’s discretion. Id. at 254-55.
In evaluating a request for a stay of discovery, the following five factors guide the
Court’s determination:
(1) plaintiff’s interests in proceeding expeditiously with the civil action and the
potential prejudice to plaintiff of a delay; (2) the burden on the defendants; (3) the
convenience to the court; (4) the interests of persons not parties to the civil
litigation; and (5) the public interest.
String Cheese Incident, LLC v. Stylus Shows, Inc., No. 02-cv-01934-LTB-PAC, 2006 WL
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894955 at *2 (D. Colo. Mar. 30, 2006). “[S]tays of the normal proceedings of a court matter
should be the exception rather than the rule and courts in this District generally disfavor stays.”
Clarendon Nat’l Ins. Co. v. Glickauf, No. 18-cv-02549-CMA-NYW, 2019 WL 1897845, at *2
(D. Colo. Feb. 14, 2029) (quotations marks omitted). Further, “a stay is not warranted merely
because Defendants filed a Motion to Dismiss that they believe is dispositive of this entire
matter.” Id. However, “a court may decide that in a particular case it would be wise to stay
discovery on the merits until challenges to jurisdiction have been resolved.” 8A Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 2040 (3d ed. 2024); see, e.g.,
Ashley v. Kellerman, No. 25-cv-02673-PAB-SBP, 2025 WL 3170802, at *2–3 (D. Colo. Nov.
13, 2025) (staying discovery when motion to dismiss that argued that the plaintiff lacked
standing was pending); Richan v. Ageiss, Inc., No. 22-cv-01060-NYW, 2022 WL 2643565, at *3
(staying discovery when a motion to compel arbitration was pending); Burkitt v. Pomeroy, No.
15-cv-02386-MSK-KLM, 2016 WL 696107, at *3 (D. Colo. Feb. 22, 2016) (“Questions of
jurisdiction and immunity should be resolved at the earliest stages of litigation, so as to conserve
the time and resources of the Court and the parties.”).
Considering the factors, the Court concludes that a stay is warranted.
First, with regard to the potential prejudice to defendant/counterclaim plaintiff Gu of a
delay and his interests in proceeding expeditiously, he argues that a delay in proceeding with the
case will prejudice him because “he continues to pay a mortgage on a home that was fraudulently
sold to him.” ECF No. 161 at 2. This argument assumes facts not yet decided. However, even
assuming they are true, Gu is arguing that any delay will prejudice him. That is true for all
litigants opposing a stay on the ground that their claims are legally correct. Mr. Gu has an
interest in proceeding expeditiously and a stay could potentially prejudice him; as a result this
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factor weighs against a stay.
The counterclaim defendants argue that they will be unfairly burdened if they are forced
to engage in discovery when their pending motions may dispose of the counterclaims Gu asserts
against them or result in those claims proceeding through arbitration. ECF No. 65 at 6–7.
Regardless of the merits of the motions, see Church Mut. Ins. Co. v. Coutu, No. 17-cv-00209-
RM-NYW, 2017 WL 3283090, at *3 (D. Colo. Aug. 2, 2017) (“[N]o element of the String
Cheese factors requires that this court make a preliminary determination as to the likelihood of
success of either the dispositive motion or the ultimate merits of this case.”), engaging in
discovery here could result in prejudice to the counterclaim defendants particularly where some
of the their arguments for dismissal are jurisdictional and “the disposition of the motion[s] to
dismiss may significantly narrow the scope of discovery, if not entirely eliminate the need for
any discovery.” Ashley v. Kellerman, No. 25-cv-02673-PAB-SBP, 2025 WL 3170802, at *3 (D.
Colo. Nov. 13, 2025). In short, engaging in discovery at this point would unfairly burden the
counterclaim defendants. Accordingly, this factor weighs in favor of a stay.
In addition, a stay would serve the Court and the public interest by avoiding the
unnecessary expenditure of the Court’s time and resources while motions are pending that could
significantly narrow the issues — which here are more than a typical case, amplified by the
number and diversity of counterclaim defendants — in dispute. See Harris v. United States, No.
09-cv-02658-PAB-KLM, 2010 WL 1687915, at *1 (D. Colo. Apr. 27, 2010) (“[N]either [the
Court’s] nor the parties’ time is well-served by being involved in the ‘struggle over the substance
of the suit’ when, as here, a dispositive motion is pending.”) (quoting Dem. Rep. Congo v. FG
Hemisphere Assocs., LLC, 508 F.3d 1062, 1064 (D.C. Cir. 2007)). Accordingly, the third and
fifth factors weigh in favor of a stay.
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Finally, regarding the interest of third parties, Gu asserts that “[t]he underlying issues in
this case extend well beyond Counterclaim Plaintiff’s individual home purchase” because
“[e]ntire subdivisions have been developed and sold through a fraudulent and deceptive scheme,
involving improper licensure, shell entities, and misrepresented professional oversight.” ECF No.
161 at 4. Whether that is true or not, Gu may not litigate on behalf of anyone other than himself.
See 28 U.S.C. § 1654 (“In all courts of the United States the parties may plead and conduct their
own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to
manage and conduct causes therein.”); Davis v. Saint Anthony’s Hosp., No. 24-cv-00131-SBP,
2024 WL 6474433, at *1 (D. Colo. Mar. 11, 2024) (“A pro se litigant may not represent another
pro se litigant in federal court.”). This lawsuit is between the plaintiffs/counterclaim defendants,
defendant/counterclaim plaintiff Gu, the nominal defendants, and the other counterclaim
defendants — no other individuals are parties to this case and any relief that may be granted in
this case only affects the parties in interest. The Court is not aware of any third parties who have
an interest in this case. As a result, this factor is neutral.
A balance of these factors favors a stay. See Wyers Prods. Grp. v. Cequent Performance
Prods., Inc., No. 12-cv-02640-REB-KMT, 2013 WL 2466917, at *3 (D. Colo. June 7, 2013)
(noting that a plaintiff’s “interest in proceeding expeditiously” can be “overcome by the burden”
of “proceed[ing] with discovery only to have the case dismissed for lack of subject matter
jurisdiction”). Therefore, good cause exists to impose a stay of discovery in this case until the
Court rules on the pending dispositive motions.
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CONCLUSION
For the foregoing reasons, it is hereby ORDERED that the Plaintiffs and Third-Party
Defendants’ Joint Motion to Stay Discovery, ECF No. 158, is GRANTED.
It is further ORDERED that discovery in this matter is STAYED pending further order of
the Court.
Entered and dated this 2nd day of February, 2026, at Denver, Colorado.
BY THE COURT:
____________________________________
Cyrus Y. Chung
United States Magistrate Judge
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