Continental Insurance Company v. Catholic Bishop of Northern Alaska

Filing 31

Order on Motion to Dismiss

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

CONTINENTAL INSURANCE COMPANY,
Plaintiff,

Case No. 3:06-cv-0019-RRB

vs.
CATHOLIC BISHOP OF NORTHERN
ALASKA,

ORDER DENYING MOTION
TO DISMISS

Defendant.

I.

INTRODUCTION
Before the Court is Defendant Catholic Bishop of Northern

America with a Motion to Dismiss (Docket 12).

Defendant argues

Plaintiff Continental Insurance Company has waived and is estopped
from disputing its obligation to provide a defense to Defendant in
certain clergy abuse litigation.1

Defendant further argues that,

inasmuch as no basis for indemnification has occurred, Plaintiff’s
complaint

1

is

not

ripe

such

that

Clerk’s Docket 12 at 1.

ORDER DENYING MOTION TO DISMISS - 1
3:06-CV-0019-RRB

the

Court

should

decline

jurisdiction.2

Plaintiff opposes at Docket 19 and argues that it

has not waived, and should not be estopped from challenging,
certain alleged duties under an alleged policy.3
that

Defendant’s

challenges

with

regard

jurisdictional grounds should be rejected.4
II.

It further argues
to

ripeness

and

The Court agrees.

FACTS
Defendant is the civil law affiliate of the Diocese of

Fairbanks, canon law denomination of the Catholic Church.5

On or

about July 29, 2003, Defendant provided notice to Plaintiff of
various claims stemming from asserted sexual abuse committed by
clergy

associated

with

Defendant.6

Defendant

alleges

that

Plaintiff issued a primary liability insurance policy to Defendant
covering the period from 1974 through 1979 (the “Alleged Policy”).7
Although neither party has been able to locate and/or produce a
copy of the Alleged Policy, Plaintiff agreed to participate in the
defense

of

the

underlying

clergy

reservation of rights.

2

Id.

3

Clerk’s Docket 19 at 1.

4

Id.

5

Clerk’s Docket 13 at 2.

6

Id.

7

Clerk’s Docket 19 at 1.

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abuse

cases,

subject

to

a

Subsequently, Plaintiff filed the present action, asking
the Court to declare, in light of the fact that Defendant cannot
meet its burden to prove the Alleged Policy’s existence, its
effective dates, its terms, exclusions, or limits,8 that Plaintiff
is entitled to a judicial declaration that it has no duty to defend
or

indemnify

Defendant

for

any

liability

stemming

from

the

allegations or claims asserted in the Underlying Abuse Claims.9
III. STANDARD OF REVIEW
A motion to dismiss for failure to state a claim made
pursuant to Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of
the claims in the complaint.

A claim should only be dismissed if

“it appears beyond doubt that a plaintiff can prove no set of facts
in support of his claim which would entitle him to relief.”10

A

dismissal for failure to state a claim can be based on either “the
lack of a cognizable legal theory or the absence of sufficient
facts alleged under a cognizable legal theory.”11

In reviewing a

Fed. R. Civ. P. 12(b)(6) motion to dismiss, “[a]ll allegations of
material fact in the complaint are taken as true and construed in

8

Clerk’s Docket 1 at 5.

9

Id.

10

Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1997).

11

Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699
(9th Cir. 1988).
ORDER DENYING MOTION TO DISMISS - 3
3:06-CV-0019-RRB

the light most favorable to the nonmoving party.”12

The court is

not required to accept every conclusion asserted in the complaint
as

true;

rather,

the

court

“will

examine

whether

conclusory

allegations follow from the description of facts as alleged by the
plaintiff.”13

“[W]here a defendant attaches extrinsic evidence to

a Rule 12(b)(6) motion, the court ordinarily must convert that
motion into one for summary judgment under Rule 56 to give the
plaintiff an opportunity to respond.”14
Defendant has attached materials outside the complaint to
its

motion,

exhibits.15

including

the

Affidavit

of

George

Bowder

with

Notwithstanding, because: (1) the attached materials

have not been considered by the Court in reaching the findings and
conclusions contained herein; and (2) the Court ultimately denies
Defendant’s Motion to Dismiss at Docket 12, the Court does not
convert Defendant’s Rule 12(b)(6) motion into one for summary
judgment.

12

Vignolo, 120 F.3d at 1077.

13

Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992)
(quoting Brian Clewer, Inc. v. Pan American World Airways, Inc.,
674 F. Supp. 782, 785 (C.D. Cal. 1986)).
14

Parrino v. FHP, Inc., 146 F.3d 699, 706 n.4 (9th Cir.
1998), rev’d on other grounds, (citing Cortec Industries, Inc. v.
Sum Holding L.P., 949 F.2d 42, 48 (2nd Cir. 1991))(emphasis added).
15

Clerk’s Docket 19 at 2.

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IV.

DISCUSSION
A.

Because All of the Jurisdictional Elements Required for
Diversity Have Been Met, the Court Concludes it Has
Original Jurisdiction Pursuant to 28 U.S.C. § 1332(a).16
The Court concludes all requisite jurisdictional elements

have been met and are supported by competent proof.

And, despite

“no basis for indemnification has occurred”17 in the underlying
State court action, the Court further concludes the matter before
it is ripe.18

The exercise of the Court’s jurisdiction in this

matter is, however, discretionary.19

16

28 U.S.C. § 1332(a) provides:

The district courts shall have original jurisdiction of
all civil actions where the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and
costs, and is between (1) citizens of different States;
(2) citizens of a State and citizens or subjects of a
foreign state; (3) citizens of different States and in
which citizens or subjects of a foreign state are
additional parties; and (4) a foreign state, defined in
section 1603(a) of this title, as plaintiff and citizens
of a State or of different States.
17

Clerk’s Docket 12 at 1.

18

“[I]n a declaratory judgment action brought to determine
a duty to defend or to indemnify, the court may exercise
jurisdiction.” American States Ins. Co. V. Kearns, 15 F.3d 142,
144 (9th Cir. 1994)(citing Aetna Cas. and Sur. Co. V. Merritt, 974
F.2d 1196, 1199 (9th Cir. 1992)).
19

“The exercise of jurisdiction under the Federal
Declaratory Judgment Act, 28 U.S.C. § 2201(a), is committed to the
sound discretion of the federal district courts.” Huth v. Hartford
Ins. Co. of the Midwest, 298 F.3d 800, 802 (9th Cir.
2002)(citations omitted).
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B.

The Court Exercises its Discretion
Plaintiff’s Declaratory Relief Action.

to

Entertain

It is well-established that “there is no per se rule
against

the

court

exercising

its

jurisdiction

to

resolve

an

insurance coverage dispute when the underlying liability suit is
pending in state court.”20

Nor is there a per se rule against the

court exercising its jurisdiction to resolve a duty to defend
and/or indemnify dispute when the underlying liability suit is
pending in a state court.21 There are, however, considerable policy
reasons for the Court to resolve disputes in a reasonable and
expeditious fashion.

Hence, in balancing the concerns of judicial

administration, comity, and fairness to the litigants,22 the Court
concludes it is appropriate to entertain declaratory relief in the
instant matter, and does so.
///
///
///
///

20

Kearns, 15 F.3d at 145 (citing Aetna Casualty and Sur.
Co. v. Merritt, 974 F.2d 1196 (9th Cir. 1992)).
21

Id. at 144 (citing Aetna Casualty and Sur. Co. v.
Merritt, 974 F.2d 1196 (9th Cir. 1992)).
22

Id. (citing Chamberlain v. Allstate Ins. Co., 931 F.2d
1361, 1367 (9th Cir. 1991)). See also Huth, 298 F.3d at 803 (9th
Cir. 2002)(“[T]he district court . . . is in the best position to
assess how judicial economy, comity and federalism are affected in
a given case.”).
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3:06-CV-0019-RRB

V.

CONCLUSION
Consequently, Defendant’s Motion to Dismiss at Docket 12

is hereby DENIED. This matter shall proceed forward in due course.
ENTERED this 21st day of August, 2006.
/s/ RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE

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