Dorroh v. Deerbrook Insurance Company

Filing 125

ORDER VACATING trial date and all associated dates, signed by District Judge Anthony W. Ishii on 3/22/2013. The trial date of June 11, 2013 is vacated. (Figueroa, O)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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ROBERT DORROH AND BARBARA
DORROH, Trustees of the Bankruptcy
Estate of Cedar Sol Warren,

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Plaintiffs,
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v.
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DEERBROOK INSURANCE
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COMPANY, a wholly-owned subsidiary of )
ALLSTATE INSURANCE COMPANY, )
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Defendant.
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____________________________________ )

CASE NO. 1:11-CV-2120 AWI GSA
ORDER VACATING TRIAL AND
ALL ASSOCIATED DATES

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In March 2000, third party Cedar Warren (“Warren”) and Robert Dorroh were involved in

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a car accident. It is undisputed that Warren was at fault and Robert Dorroh became paralyzed as

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a result. Warren was covered by Defendant Deerbrook Insurance (“Deerbrook”) with a relevant

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policy limit of $15,000. Robert Dorroh was on his way to work and applied for workers’

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compensation; his workers’ compensation carrier is third party Superior National Insurance

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Company (“Superior”). In July 2000, Plaintiffs Robert and Barbara Dorroh (“Dorrohs”)

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requested that Deerbrook settle their claim against Warren for $15,000. Deerbrook agreed to the

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settlement. Before Deerbrook issued a check to the Dorrohs, Superior contacted Deerbrook.

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Superior claimed a potential lien on any insurance payout. Deerbrook told the Dorrohs it would

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issue a check that named both the Dorrohs and Superior. The Dorrohs responded that the
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workers’ compensation claim had been denied; workers’ compensation was ultimately awarded

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in 2003 after a trial. In 2000, the Dorrohs demanded that the check be made payable solely to

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themselves. The parties could not come to an agreement.

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The Dorrohs filed suit against Warren in March 2001; they were ultimately awarded

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$16,520,169.65 in May 2008. In 2007, Warren filed for bankruptcy in the District of Oregon.

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One of his assets was a bad faith failure to settle claim against Deerbrook. In April 2011, the

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bankruptcy trustee filed suit against Deerbrook for breach of contract and breach of the covenant

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of good faith and fair dealing. The Dorrohs purchased the suit from Warren’s estate for

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$215,000. The Dorrohs are now suing Deerbrook under an assignment of the claim. In

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December 2011, the case was transferred to the Eastern District of California for the convenience

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of the parties.

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Warren made a motion to substitute himself into this case as a plaintiff to pursue claims

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against Deerbrook that are personal to him, and could not be brought by the Dorrohs. Doc. 69.

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Magistrate Judge Austin denied the motion. Doc. 81. Subsequently, the Dorrohs and Warren

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executed a second assignment returning the personal claims to Warren. Doc. 93, Part 2, Ex. D.

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The Dorrohs and Warren then filed a joint motion to substitute in Warren as a plaintiff to pursue

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those personal claims. Doc. 93. Simultaneously, Warren filed an “Objection to the Non-

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Dispositive Order of the Magistrate Judge Hon. Gary S. Austin.” Doc. 94. The two motions were

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denied. Doc. 108.

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Deerbrook and the Dorrohs made cross motions for summary judgment. Docs. 109 and

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111. After those motions were filed, the Dorrohs appealed the denial of substitution/joinder

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(Doc. 108) to the Ninth Circuit. Doc. 114. The court asked for a written response as to the status

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of the appeal and how it might affect the progress of the case. The Dorrohs seek to have the case

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proceed while Deerbrook argues in favor of vacating all dates pending resolution of the appeal.

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Docs. 123 and 124.

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The court is convinced that waiting for a ruling form the Ninth Circuit is the best option.

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The Dorrohs’ central argument for allowing Warren to substitute into the case was that California

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law only allowed an assignor and assignee to both pursue claims against an insurance company
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when they did so jointly, in one case. Doc. 93, Part 1, Dorrohs Brief, 4:18-26 and 6:10-8:17.

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They quoted California case law discussing this issue which warned “leave nothing to be done

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piecemeal.” Cain v. State Farm Mut. Auto. Ins. Co., 47 Cal. App. 3d 783, 795 (Cal. App. 1st

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Dist. 1975), quoting Martin v. Howe, 190 Cal. 187, 193 (Cal. 1922). To proceed before the

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appeal is resolved would leave the possibility that separate trials would be held for the Dorrohs’

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and Warren’s claims. That appears to violate the main thrust of the legal rationale for allowing

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Warren to substitute in.

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The trial date of June 11, 2013 is VACATED. All associated dates are also VACATED.

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IT IS SO ORDERED.

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Dated:
0m8i78

March 22, 2013
SENIOR DISTRICT JUDGE

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