Free Order Staying Case - District Court of California - California

Case 3:08-cv-00056-IEG-AJB

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Filed 08/12/2008

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1 2 3 4 5 6 7 8 9 10 11 12 Plaintiff, 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Presently before the Court is a motion filed by defendants Ryan Baldwin and Jayce Baldwin (hereinafter Baldwin defendants) to dismiss or stay the case in light of pending litigation in state court. Plaintiff Empire Fire & Marine Insurance Company filed a notice of opposition to dismissal and nonopposition to a stay. Defendants James A. Nguyen, Binh Huu Nguyen, and Diane Hoa Nguyen (hereinafter Nguyen defendants) filed a notice of joinder in the Baldwin defendants' motion. For the following reasons, the Court enters a stay in this case. Background Plaintiff, the Nguyens' insurance carrier, is presently incurring the costs of defending the Nguyens in state court against litigation brought by the Baldwins. In the state case, filed November 13, 2007, the Baldwins allege James Nguyen shot and injured Ryan Baldwin. The Baldwins also allege Mr. and Mrs. Nguyen are liable for negligently supervising their son. In this action, plaintiff vs. JAMES A. NGUYEN, BINH HUU NGUYEN, DIANE HOA NGUYEN, RYAN BALDWIN, and JAYCE BALDWIN, Defendants. (Doc. No. 14.) EMPIRE FIRE & MARINE INSURANCE COMPANY, CASE NO. 08cv0056 IEG (AJB) ORDER STAYING CASE

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

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08cv0056

Case 3:08-cv-00056-IEG-AJB

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Filed 08/12/2008

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seeks a declaration that it is not responsible for defending the Nguyens in the state court action because of an intentional acts exclusion in the policy. The Court has jurisdiction over the action under 28 U.S.C. § 1332 due to the complete diversity of the parties. Declaratory Judgment The Baldwin and Nguyen defendants correctly argue the Court should not entertain the present action at this time. In Brillhart v. Excess Insurance Co. of America, 316 U.S. 491 (1942), the Supreme Court explained "[o]rdinarily it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties." Id. at 495. The Ninth Circuit Court of Appeals has also held "federal courts should generally decline to entertain reactive declaratory actions." Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998) (en banc). "If there are parallel state proceedings involving the same issues and parties pending at the time the federal declaratory action is filed, there is a presumption that the entire suit should be heard in state court." Id. The Brillhart and Dizol factors disfavor exercising jurisdiction at this time, as this case presents state law issues which will be decided in the underlying state court action. Motion to Dismiss, or in the Alternative, to Stay Although plaintiff opposes dismissal of the case and favors a stay, plaintiff does not offer any reasons why a stay is more appropriate than dismissal in this case. Similarly, the Baldwin defendants' motion does not distinguish between dismissal and stay, and defendants did not file a reply Other courts considering similar issues have found a stay appropriate. See Nat'l Chiropractic Mut. Ins. Co. v. Doe, 23 F. Supp. 2d 1109, 1124 (D. Alaska, 1998) (staying action for declaration of scope of insurance coverage until conclusion of underlying state court litigation). // // // // // // -2-

08cv0056

Case 3:08-cv-00056-IEG-AJB

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Filed 08/12/2008

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Accordingly, in the interests of justice, the Court GRANTS the motion to stay and DENIES the motion to dismiss without prejudice. Plaintiff shall notify the Court no later than twenty days after the underlying state court litigation is resolved. In addition, the Court will hold a status conference on February 23, 2009, at 10:30 a.m., to determine whether to continue to stay the case.

IT IS SO ORDERED.

DATED: August 12, 2008 IRMA E. GONZALEZ, Chief Judge United States District Court

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