North American Insurance Agency Inc et al v. Bates
ORDER denying 31 defendant Robert C. Bates' Motion to Stay (as more fully set out in order). Signed by Honorable Vicki Miles-LaGrange on 7/30/2012. (njr)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
NORTH AMERICAN INSURANCE
AGENCY, INC., d/b/a INSURICA,
ROBERT C. BATES, L.L.C., and
ROBERT C. BATES, JOEY D. DILLS,
AND COMMERCIAL INSURANCE
BROKERS, L.L.C., A STATE OF
Case No. CIV-12-544-M
Before the Court is defendant Robert C. Bates’ (“Bates”) Motion to Stay, filed July 2, 2012.
On July 19, 2012, plaintiffs filed their response, and on July 26, 2012, Bates filed his reply. Based
upon the parties’ submissions, the Court makes its determination.
On May 14, 2012, plaintiffs Robert C. Bates L.L.C. and North American Insurance Agency
Inc. (collectively referred to herein as the “Company”) initiated the instant action, requesting
injunctive relief against Bates. Additionally, the Company contemporaneously initiated arbitration
relating to their damages claims before the American Arbitration Association. On June 4, 2012,
Bates and Commercial Insurance Brokers, L.L.C.1 filed suit in the District Court for Tulsa County,
State of Oklahoma, seeking injunctive relief as well as asserting claims for damages (“Tulsa County
Action”). On July 3, 2012, plaintiffs filed a First Amended Complaint in the instant action, adding
Commercial Insurance Brokers, L.L.C. is Bates’ insurance agency.
damages claims from the arbitration as well as additional federal claims. Bates now moves the Court
to stay this action based upon the Tulsa County Action.
“[T]he existence of proceedings in state court does not by itself preclude parallel proceedings
in federal court.” Fox v. Maulding, 16 F.3d 1079, 1082 (10th Cir. 1994) (internal quotations and
citation omitted). Instead, the Court must apply the requirements of the Colorado River doctrine to
determine whether it may stay this action based upon the Tulsa County Action. Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800 (1976). “The Colorado River doctrine applies to
‘situations involving the contemporaneous exercise of concurrent jurisdictions . . . by state and
federal courts.’” Fox, 16 F.3d at 1080 (quoting Colo. River, 424 U.S. at 817). “The doctrine permits
a federal court to dismiss or stay a federal action in deference to pending parallel state court
proceedings, based on ‘considerations of “[w]ise judicial administration, giving regard to
conservation of judicial resources and comprehensive disposition of litigation.”’” Id. (quoting Colo.
River, 424 U.S. at 817 (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183
[T]he decision whether to defer to the state courts is necessarily left
to the discretion of the district court in the first instance. Such
discretion, however, must be exercised under the relevant standard
prescribed by [the Supreme] Court. In Colorado River, the Court
held that, in light of
the virtually unflagging obligation of the federal
courts to exercise the jurisdiction given them . . . and
the absence of weightier considerations of
constitutional adjudication and state-federal relations,
the circumstances permitting the dismissal of a federal
suit due to the presence of a concurrent state
proceeding for reasons of wise judicial administration
are considerably more limited than the circumstances
appropriate for abstention.
Thus, declining to exercise jurisdiction based on the Colorado River
doctrine is appropriate only in “exceptional” circumstances.
Fox, 16 F.3d at 1081 (internal quotations and citations omitted).
A court determining whether to grant a stay must apply a two-part analysis. First, the court
must determine if the state and federal actions are parallel proceedings. If the court determines they
are parallel proceedings, the court must then determine whether deference to state court proceedings
is appropriate under the particular circumstances. See Fox, 16 F.3d at 1081-82.
“Suits are parallel if substantially the same parties litigate substantially the same issues in
different forums.” Id. at 1081 (internal quotations and citation omitted). Having reviewed the
Amended Complaint in this action and the Petition in the Tulsa County Action, the Court finds that
the two lawsuits are parallel proceedings. Specifically, the Court finds substantially the same parties
are involved in both actions; there are only two parties in the instant action who are not parties in the
Tulsa County Action – one is a subsidiary of plaintiff North American Insurance Agency, Inc., and
the other is another independent contractor who entered into a Producer Agreement with plaintiff
Roberts C. Bates, L.L.C; all other parties are exactly the same. Further, the Court finds substantially
the same issues are being litigated in these cases. In both actions, the parties are asserting claims
arising out of alleged breaches of the Producer Agreements. In the instant action, plaintiffs are also
asserting federal law claims not raised in the Tulsa County Action, but these claims also arise out
of Bates’ termination of his relationship with plaintiffs.
Since this Court has found that the instant action and the Tulsa County Action are parallel
proceedings, the Court must now determine whether deference to the Tulsa County Action is
In Colorado River, the Supreme Court set forth a nonexclusive list of
factors for courts to consider in deciding whether “exceptional
circumstances” exist to warrant deference to parallel state
proceedings: (1) whether either court has assumed jurisdiction over
property; (2) the inconvenience of the federal forum; (3) the
desirability of avoiding piecemeal litigation; and (4) the order in
which the courts obtained jurisdiction. The Court discussed several
other factors in Moses H. Cone, such as the vexatious or reactive
nature of either the federal or the state action; whether federal law
provides the rule of decision; and the adequacy of the state court
action to protect the federal plaintiff’s rights. Other courts also have
considered whether the party opposing abstention has engaged in
No single factor is dispositive; [t]he weight to be given to any one
factor may vary greatly from case to case, depending on the particular
setting of the case. Rather than use the factors as a mechanical
checklist, a court should engage in a careful balancing of the
important factors as they apply in a given case, with the balance
heavily weighted in favor of the exercise of jurisdiction. Indeed,
since [o]nly the clearest of justifications will warrant dismissal, any
doubt should be resolved in favor of exercising federal jurisdiction.
Id. at 1082 (internal quotations and citations omitted).
Having carefully reviewed the parties’ submissions, the Court finds Bates has not shown
“exceptional circumstances” to warrant a stay in this case. Weighing the factors set forth above, and
noting that the balance is “heavily weighted in favor of the exercise of jurisdiction” and that “any
doubt should be resolved in favor of exercising federal jurisdiction,” the Court finds that the balance
in this case lies in favor of not staying this action. First, there is no property over which either court
has assumed jurisdiction, and this Court finds this factor is a non-issue. Second, Bates has not
shown any real inconvenience to trying this matter in this Court; while trying these matters in the
District Court for Tulsa County might be more convenient to Bates, the Court finds due to the short
distance between Oklahoma City and Tulsa, that any inconvenience is minimal. Third, while there
is a risk of piecemeal litigation, the Court finds that the risk is minimized by the fact that Bates could
assert all of the claims he has asserted in the Tulsa County Action as counterclaims in the instant
action and that there is a pending motion to dismiss or, alternatively, motion to stay in the Tulsa
County Action. Fourth, the Court finds that because this Court obtained jurisdiction before the
District Court for Tulsa County, this factor weighs in favor of not staying this action. Fifth, while
the Court finds that neither action was vexatious, the Court does acknowledge that perhaps both the
filing of the Tulsa County Action and the Amended Complaint in this action could be perceived as
reactive in nature. Thus, the Court finds that this factor is neutral. Sixth, plaintiffs raise federal law
claims in the instant action, and, thus, this factor weighs in favor of not staying this action. Finally,
the Court does not find that plaintiffs engaged in impermissible forum-shopping.
Therefore, the Court finds the instant action should not be stayed based upon the Tulsa
For the reasons set forth above, the Court DENIES Bates’ Motion to Stay [docket no. 31].
IT IS SO ORDERED this 30th day of July, 2012.