Travelers Commercial Insurance Company v. Marshalsteevan

Filing 32

ORDER denying 23 Motion to Dismiss or Stay. Signed by Judge P. Casey Pitts on 3/27/2024. (nmc, COURT USER) (Filed on 3/27/2024)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 TRAVELERS COMMERCIAL INSURANCE COMPANY, 8 9 10 United States District Court Northern District of California 11 Plaintiff, v. Case No. 23-cv-05088-PCP ORDER DENYING MOTION TO DISMISS OR STAY Re: Dkt. No. 23 RAJITHA MARSHALSTEEVAN, Defendant. 12 13 Plaintiff Travelers Commercial Insurance Company has brought this breach of contract 14 action against defendant Rajitha Marshalsteevan seeking to enforce the parties’ purported 15 agreement to settle Ms. Marshalsteevan’s claims after she was seriously injured by a driver 16 insured by Travelers. Ms. Marshalsteevan has moved to dismiss or stay this case out of deference 17 to a pending state court suit between the parties under Colorado River Water Conservation 18 District v. United States, 424 U.S. 800 (1976). The motion is denied and this case may proceed. 19 When there are concurrent actions in state and federal court, “the rule is that the pendency 20 of an action in the state court is no bar to proceedings concerning the same matter in the Federal 21 court.” Colorado River, 424 U.S. at 817 (cleaned up). Federal courts have a “virtually unflagging 22 obligation … to exercise the jurisdiction given them.” Id. In “rare cases,” though, “the presence of 23 a concurrent state proceeding permit[s] the district court to dismiss a concurrent federal suit for 24 reasons of wise judicial administration.” R.R. Street & Co. Inc. v. Transp. Ins. Co., 656 F.3d 966, 25 977–78 (9th Cir. 2011) (cleaned up) (citing Colorado River, 424 U.S. at 818). 26 “To decide whether a particular case presents the exceptional circumstances that warrant a 27 Colorado River stay or dismissal, the district court must carefully consider both the obligation to 28 exercise jurisdiction and the combination of factors counseling against that exercise.” R.R. Street, 1 656 F.3d at 978 (cleaned up). These factors are: “(1) which court first assumed jurisdiction over 2 any property at stake; (2) the inconvenience of the federal forum; (3) the desire to avoid piecemeal 3 litigation; (4) the order in which the forums obtained jurisdiction; (5) whether federal law or state 4 law provides the rule of decision on the merits; (6) whether the state court proceedings can 5 adequately protect the rights of the federal litigants; (7) the desire to avoid forum shopping; and 6 (8) whether the state court proceedings will resolve all issues before the federal court.” Id. at 978– 7 79. Both parties recognize that the final factor can be dispositive. “[A] district court may enter a 8 Colorado River stay order only if it has full confidence that the parallel state proceeding will end 9 the litigation.” Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993). The Court takes judicial notice of Ms. Marshalsteevan’s state court complaint against United States District Court Northern District of California 10 11 Travelers’ insured, which alleges general negligence and seeks damages for the injuries she 12 suffered. See Complaint, Marshalsteevan v. Le, Dkt. No. 23-3. Ms. Marshalsteevan argues in her 13 motion that insured’s affirmative defense of accord and satisfaction will “dispense with” 14 Travelers’s breach of contract claim here. Travelers contends that it will not, arguing that accord 15 and satisfaction is distinct from settlement, that Travelers is not a party in the state action, and that 16 the state action could not resolve other aspects of its breach of contract claim in this action 17 including breach, causation, and damages. Ultimately, Ms. Marshalsteevan has not demonstrated that the state proceedings will end 18 19 this litigation. Even if the parties’ alleged settlement may be relevant as a defense in the state case, 20 Travelers seeks remedies that go beyond what the insured might obtain by a successful defense in 21 the state case. Because the Court does not have full confidence that this case will be resolved by 22 the state action, a dismissal or stay is not warranted. Ms. Marshalsteevan’s motion is therefore 23 denied. 24 25 26 IT IS SO ORDERED. Dated: March 27, 2024 27 P. Casey Pitts United States District Judge 28 2

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