United States Fire Insurance Company v. Hawaiian Canoe Racing Associations et al
ORDER Granting Motions To Dismiss And/Or Stay and Sever Cross-Claim and Granting Joinders In The Motion re 32 42 .On the basis of the foregoing, HCC's October 23, 2018 Motion to Dismiss and/or Stay and Sever Defendant/Cross-claimant Mark David Stevens' Cross-claim; KCC's November 13, 2018 motion with the same title; and HCRA's December 6, 2018 joinders of simple agreement in the Motions are HEREBY GRANTED. Stevens's Cross-claim, filed July 26, 2018, is DISMISSED W ITHOUT PREJUDICE. Further, the proceedings on Stevens's Cross-claim are HEREBY STAYED pending the resolution of the Underlying Action, and the stayed proceedings are HEREBY SEVERED from the proceedings on the other claims in this case. The stay may be lifted, when appropriate, for the reasons described in this Order. Signed by JUDGE LESLIE E. KOBAYASHI on 3/29/2019. (cib)
UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
UNITED STATES FIRE INSURANCE
COMPANY, A FOREIGN CORPORATION;
CIV. NO. 18-00212 LEK-RLP
HAWAIIAN CANOE RACING
ASSOCIATIONS, HAWAIIAN KAMALI'I
INC., doing business as HAWAIIAN
CANOE CLUB, KIHEI CANOE CLUB,
MARK DAVID STEVENS, DOE
SPOTTER, DOE DEFENDANTS,
ORDER GRANTING MOTIONS TO DISMISS AND/OR STAY AND
SEVER CROSS-CLAIM AND GRANTING JOINDERS IN THE MOTION
On October 23, 2018, Defendant/Counterclaim
Defendant/Cross-claim Defendant Hawaiian Kamali`i, Inc., doing
business as Hawaiian Canoe Club (“HCC”), filed a motion to
dismiss, or to stay and sever, the cross-claim filed by
Defendant/Third-Party Plaintiff/Cross-claimant Mark David
Stevens (“Stevens” and “Cross-claim”) on July 26, 2018 (“HCC
[Dkt. nos. 20-1 (Cross-claim), 32 (HCC Motion).]
November 13, 2018, Defendant Kihei Canoe Club (“KCC”) filed a
similar motion (“KCC Motion”).
[Dkt. no. 42.]
Also before the
Court are Defendant/Counterclaim Defendant/Cross-claim Defendant
Hawaiian Canoe Racing Association’s (“HCRA”) joinders of simple
agreement in the HCC Motion and the KCC Motion (collectively
“Joinders”), both filed on December 6, 2018.
[Dkt. nos. 44,
On January 25, 2019: 1) Stevens filed a memorandum in
opposition addressing the HCC Motion and the KCC Motion
(collectively “Motions”), as well as the Joinders; [dkt.
no. 52;] 2) Third-Party Defendant Servco Pacific, Inc., doing
business as Servco Pacific Insurance, filed a statement of no
position as to each of the Motions; [dkt. nos. 53, 54;] and
3) Plaintiff/Counterclaim Defendant United States Fire Insurance
Company (“US Fire”) filed a statement of no opposition to all of
the Motions and Joinders, [dkt. no. 56].
On February 1, 2019,
KCC filed a reply in support of the KCC Motion, and HCC filed a
reply in support of the HCC Motion.
[Dkt. nos. 58, 59.]
Motions and the Joinders came on for hearing on February 15,
For the reasons set forth below, the Motions and the
Joinders are granted insofar as: 1) Stevens’s Cross-claim is
dismissed without prejudice for failure to state a claim; 2) the
proceedings on the Cross-claim are stayed pending the final
resolution of the underlying state court action; and 3) the
stayed proceedings are severed from the proceedings on the other
claims in the instant case.
US Fire filed its Complaint for Declaratory Judgment
(“Complaint”) on June 4, 2018, seeking a declaratory judgment
that it does not have a duty to defend nor a duty to indemnify
HCRA, HCC, KCC, Stevens (collectively “Defendants”), and other
Doe defendants, as to claims arising from a September 17, 2016
incident in which Faith Ann Kalei-Imaizumi (“Kalei-Imaizumi”)
See Complaint at ¶¶ 4, 21-24 & pgs. 31-32.
According to the Complaint, September 17, 2016 was the
date of the 2016 Pailolo Challenge Outrigger Canoe Race (“2016
HCRA was a sponsor, host, or organizer of
the 2016 Pailolo Challenge, as was HCC.
HCC is a member of non-
party Maui County Hawaiian Canoe Association (“Maui HCA”), which
is part of the HCRA.
Kalei-Imaizumi was a switch or relief
paddler for KCC’s team that was entered in the Pailolo
KCC is also a member of the Maui HCA.
[Id. at ¶¶ 2-
Stevens was the owner and operator of the Ohana, which was
an escort vessel for KCC’s team in the 2016 Pailolo Challenge.
[Id. at ¶¶ 5, 17.]
On the date of the 2016 Pailolo Challenge,
Kalei-Imaizumi and other members of KCC’s team swam to the
Ohana, which was in an off-shore staging area at the time.
After the KCC team members boarded the Ohana, Stevens’s hat blew
into the water, and Kalei-Imaizumi re-entered the water to
Kalei-Imaizumi was injured while she was
attempting to re-board the Ohana using a ladder.
[Id. at ¶¶ 21-
Kalei-Imaizumi alleges Stevens and others failed to warn
her that the propellers near the ladders did not have guards and
were extremely dangerous.
[Id. at ¶ 29.]
husband, and their children (“Underlying Plaintiffs”) filed an
action against Defendants and others in state court, KaleiImaizumi, et al. v. Stevens, et al., Civil No. 17-1-0474
[Id. at ¶¶ 10-11, Exh. A (complaint in
the Underlying Action (“Underlying Complaint”)).]
Underlying Plaintiffs’ claims that are relevant to the instant
case will be discussed here.
US Fire issued Marine Policy No. 830-101897-8 to HCRA,
for the period from January 1, 2016 to January 1, 2017
[Complaint at ¶ 41, Exh. B (Policy).]
well as “‘[t]he Island Association, its Member Clubs and their
Members and Director & Board Members’” are named insureds under
[Complaint at ¶ 41.]
HCRA, HCC, and KCC (“Club
Defendants”) tendered the defense of the claims against them in
the Underlying Action to US Fire under the Policy.
US Fire is
defending all of the Club Defendants under a reservation of
[Id. at ¶ 46.]
Stevens filed his original answer to US Fire’s
Complaint on July 24, 2018, and an amended answer (“First
Amended Answer”) on July 26, 2018.
[Dkt. nos. 17, 20.]
First Amended Answer includes the Cross-claim against the Club
Defendants and the Doe defendants named in the Complaint.
Count I of the Cross-claim (“Cross Count I”) alleges
the Club Defendants were negligent in failing to obtain the
appropriate insurance for the 2016 Pailolo Challenge.
also alleges the failure to obtain appropriate insurance was a
breach of the Club Defendants’ contractual duties.
contends this management and operational negligence is covered
under the Club Defendants’ general liability insurance policies.
[Cross-claim at ¶¶ 8-20.]
Count II of the Cross-claim (“Cross
Count II”) alleges Stevens is entitled to implied
indemnification and/or equitable subrogation.
[Id. at ¶¶ 21-
HCC argues the Cross-claim should be dismissed
because: it fails to state a claim upon which relief can be
granted; and it is duplicative of both the cross-claim that
Stevens filed in Great Divide Insurance Co. v. Hawaiian
Kamali`i, Inc., et al., CV 18-00140 LEK-RLP (“Great Divide” and
“the Great Divide Cross-claim”), and the cross-claim that
Stevens filed in the Underlying Action.
In the alternative, HCC
urges this Court to “[s]tay, sever, and abstain from this
action” until the conclusion of the Underlying Action.
Supp. of HCC Motion at 2.]
The KCC Motion raises substantively
Failure to State a Claim
Cross Count I sounds primarily in negligence, and
damages are a required element of a negligence claim.
Kennedy v. Wells Fargo Bank, CIVIL NO. CV 18-00068 DKW-KJM, 2018
WL 3624967, at *3 (D. Hawai`i July 30, 2018) (“The elements of a
negligence claim under Hawaii law are: (1) duty; (2) breach of
duty; (3) causation; and (4) damages.” (some citations omitted)
(citing Cho v. State, 115 Hawai`i 373, 168 P.3d 17, 23 n.11
Similarly, Cross Count II is primarily an
indemnification claim, and the plaintiff’s discharge of an
obligation to a third-party is a required element of an
See Seabright Ins. Co. v. Matson
Terminals, Inc., 828 F. Supp. 2d 1177, 1187–88 (D. Hawai`i 2011)
(“The framework for analyzing a claim for equitable indemnity
requires a plaintiff to plead and prove that: (1) he or she
discharged a legal obligation owed to a third party; (2) the
defendant was also liable to the third party; and (3) as between
the claimant and defendant, the obligation ought to be
discharged by the latter.” (citation and internal quotation
HCC and KCC argue that, because there has been neither
a determination of liability nor an award of damages in the
Underlying Action, Stevens: does not have damages to support his
negligence claim; and cannot pursue an indemnification claim
because he has not discharged any obligation to the Underlying
In the context of the instant Motions, Stevens
argues he has been forced to pay for his legal defense in the
Underlying Action, and those expenses constitute damages
supporting Cross Count I.
Further, Stevens argues that, if the
Club Defendants had obtained the appropriate insurance for the
2016 Pailolo Challenge, he would have been covered under the
policy (or policies) and the insurer(s) would have been paying
the legal expenses that Stevens is currently paying.
allegations regarding Stevens’s legal expenses would be
sufficient to state a plausible basis for the damages element of
Stevens’s negligence claim and the discharge element of his
See Ashcroft v. Iqbal, 556 U.S. 662, 678
When an indemnification or contribution claim is pled in a
cross-claim filed pursuant to Fed. R. Civ. P. 13(g), the claim
does not have to “be mature at the time of pleading.” Wada v.
Aloha King, LLC, 154 F. Supp. 3d 981, 1003 (D. Hawai`i 2015)
(citing 6 Wright, Miller & Kane § 1431 at pp. 281).
2 To the extent there may be other defects in the
Cross-claim, this Court declines to address them in the instant
(. . . continued)
(2009) (“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007))).
factual allegations would also state a plausible basis for the
See 18 Unnamed John Smith Prisoners v.
Meese, 871 F.2d 881, 883 (9th Cir. 1989) (“The ripeness doctrine
prevents courts, through avoidance of premature adjudication,
from entanglement in theoretical or abstract disagreements that
do not yet have a concrete impact on the parties.” (some
citations omitted) (citing Thomas v. Union Carbide Agric. Prods.
Co., 473 U.S. 568, 580, 105 S. Ct. 3325, 3332, 87 L. Ed. 2d 409
However, the pleadings do not contain factual
allegations regarding Stevens’s payment of legal expenses in the
Underlying Action, and therefore the allegations cannot be
considered in the determination of whether the Cross-claim
states plausible claims.
See Khoja v. Orexigen Therapeutics,
Order. The anticipated amendments to the Cross-claim will
address both Stevens’s payment of legal expense in the
Underlying Action and any events that transpired in the
Underlying Action while the instant case was stayed. Those
additional factual allegations will likely affect multiple
aspects of Stevens’s claims. Therefore this Court will conduct
a more thorough analysis of the alleged defects in Stevens’s
claims against the Club Defendants after Stevens has filed an
Inc., 899 F.3d 988, 998 (9th Cir. 2018) (“Generally, district
courts may not consider material outside the pleadings when
assessing the sufficiency of a complaint under Rule 12(b)(6) of
the Federal Rules of Civil Procedure.”), cert. petition
docketed, No. 18-1010 (Feb. 4, 2019).
Both Cross Count I and
Cross Count II, as currently pled, fail to state claims upon
which relief can be granted.
See Fed. R. Civ. P. 12(b)(6).
Motions are granted, insofar as Stevens’s Cross-claim is
dismissed, in its entirety.3
Stevens should be given leave to
amend the Cross-claim because it is arguably possible for him to
cure the defects in the Cross-claim by amendment.
Cty. Ass’n of Retired Emps. v. Sonoma Cty., 708 F.3d 1109, 1118
(9th Cir. 2013) (“As a general rule, dismissal without leave to
amend is improper unless it is clear, upon de novo review, that
the complaint could not be saved by any amendment.” (brackets,
citation, and internal quotation marks omitted)).
HCRA’s Joinders are joinders of simple agreement, which
merely support the relief sought in the Motions; they do not
seek relief for HCRA. See, e.g., Hyland v. Office of Hous. &
Cmty. Dev., CIVIL 15-00504 LEK-RLP, 2018 WL 4119903, at *3 (D.
Hawai`i Aug. 29, 2018) (“A party filing a substantive joinder
may ‘seek the same relief sought by the movant for himself,
herself, or itself,’ whereas a joinder of simple agreement
‘simply seek[s] relief for the original movant.’” (alterations
in Hyland) (quoting Local Rule LR7.9)). However, this Court has
dismissed the Cross-claim as to HCRA (rather than requiring HCRA
to file its own motion to dismiss) in the interest of judicial
economy because the same analysis applies to Stevens’s claims
against HCRA in the Cross-claim as to his claims against HCC and
The fact that Stevens filed a similar cross-claim
against the Club Defendants in Great Divide does not affect this
Court’s analysis of whether the Cross-claim in the instant case
should be dismissed for failure to state a claim.
instant Cross-claim and the Great Divide Cross-claim are not
The instant Cross-claim arguably
addresses the issue of whether the Club Defendants were required
to ensure that Stevens was covered under the Policy, whereas the
Great Divide Cross-claim arguably addresses the issue of whether
the Club Defendants were required to ensure that Stevens was
covered under the policy that Great Divide issued.
Great Divide Cross-claim will be remanded to the state court.
[Great Divide, Order Remanding Cross-claim and Denying Pending
Motions and Joinders, filed 3/15/19 (dkt. no. 68), at 2-3.]
Stevens has also filed similar cross-claims in the Underlying
Action (collectively “Underlying Cross-claims”), but this Court
cannot find that the Underlying Cross-claims are duplicative of
the instant Cross-claim based on the current record.
Motion, Decl. of Counsel, Exh. E (Stevens’s answer to HCC’s
cross-claim against him, including his cross-claim against HCC,
filed on 4/23/18 in the Underlying Action); KCC Motion, Decl. of
Matthew C. Shannon, Exh. 3 (same as to KCC).
Thus, the Great
Divide Cross-claim and the Underlying Cross-claims do not
require this Court to dismiss the instant Cross-claim with
This Court therefore turns to the issue of whether the
Cross-claim should be dismissed or stayed under the abstention
doctrine, in light of the claims pending in state court.
The Ninth Circuit has stated:
A district court may, in its discretion,
decline to hear a declaratory judgment action
when a related case is pending in state court.
Wilton [v. Seven Falls Co.], 515 U.S. [277,] 289,
115 S. Ct. 2137 [(1995)]. But this discretionary
jurisdictional rule does not apply to “[c]laims
that exist independent of the request for a
declaration.” Snodgrass v. Provident Life &
Accident Ins. Co., 147 F.3d 1163, 1167 (9th Cir.
1998). These “independent” claims are instead
evaluated under the Colorado River[ Water
Conservation District v. United States, 424 U.S.
800 (1976),] doctrine. Id. In this context, a
claim is independent if it “would continue to
exist if the request for a declaration simply
dropped from the case.” Id. at 1168; see also
United Nat’l Ins. Co. v. R & D Latex Corp., 242
F.3d 1102, 1113 (9th Cir. 2001).
Scotts Co. LLC v. Seeds, Inc., 688 F.3d 1154, 1158–59 (9th Cir.
2012) (some alterations in Scotts Co.).
“In other words, the
district court should consider whether it has subject matter
jurisdiction over the monetary claim alone, and if so, whether
that claim must be joined with one for declaratory relief.”
United Nat’l, 242 F.3d at 1113.
Cross Count I sounds in negligence, and negligence is
a well-recognized tort claim under Hawai`i law.
There is no
controlling legal authority requiring that a negligence claim be
brought together with a claim for declaratory relief.
(“We can see no reason . . . why a reimbursement claim must be
joined with a claim for declaratory relief.” (emphasis in
Cross Count II is primarily an indemnification
While indemnification claims are often filed with claims
for declaratory relief, there is no controlling legal authority
requiring that an indemnification claim be brought together with
a claim for declaratory relief.
Cf. id. (noting that, although
insurance coverage actions often have both a claim for
reimbursement and a claim for declaratory relief, there is no
“an indication that this pattern reflects anything but . . .
This Court therefore concludes
that Cross Count I and Cross Count II are independent claims for
Because both Cross Count I and Cross Count II are
independent claims, jurisdiction over those claims is mandatory,
see United Nat’l, 242 F.3d at 1112, unless the Colorado River
doctrine applies, see Snodgrass, 147 F.3d at 1167.
As a general
rule, if the Colorado River doctrine applies, a stay is
appropriate, rather than dismissal.
Montanore Minerals Corp. v.
Bakie, 867 F.3d 1160, 1166 (9th Cir. 2017).
Thus, this Court
next turns to the issue of whether the proceedings on the Crossclaim should be stayed, pending the resolution of state court
Stay and Severance
Stevens does not oppose the Motions’ alternate
requests to stay the proceedings on the Cross-claim pending the
resolution of the Underlying Action.
[Mem. in Opp. at 7.]
Court has considered the following factors, which the Ninth
Circuit has identified as part of the Colorado River analysis:
(1) which court first assumed jurisdiction
over any property at stake; (2) the
inconvenience of the federal forum; (3) the
desire to avoid piecemeal litigation;
(4) the order in which the forums obtained
jurisdiction; (5) whether federal law or
state law provides the rule of decision on
the merits; (6) whether the state court
proceedings can adequately protect the
rights of the federal litigants; (7) the
desire to avoid forum shopping; and
(8) whether the state court proceedings will
resolve all issues before the federal court.
[R.R. St. & Co. v. Transp. Ins. Co., 656 F.3d
966,] 978-79 [(9th Cir. 2011)]. Some factors may
not apply in some cases, and “[a]ny doubt as to
whether a factor exists should be resolved
against a stay” or dismissal. Seneca Ins. Co.
[v. Strange Land, Inc.], 862 F.3d [835,] 842
[(9th Cir. 2017)] (quoting Travelers Indem. Co.
v. Madonna, 914 F.2d 1364, 1369 (9th Cir. 1990)).
When it is appropriate for a court to
decline to exercise jurisdiction pursuant to the
Colorado River doctrine, we generally require a
stay rather than a dismissal. Attwood v.
Mendocino Coast Dist. Hosp., 886 F.2d 241, 243
(9th Cir. 1989). A stay “ensures that the
federal forum will remain open if for some
unexpected reason the state forum. . . . turn[s]
out to be inadequate.” Id. (internal quotation
Montanore Minerals, 867 F.3d at 1166 (some alterations in
The first factor is inapplicable because there is no
specific property at issue in either the instant case or in the
The second factor weighs against a stay
because there has been no showing that this district court is an
inconvenient forum for any of the parties that would be affected
by a stay.
The third and fourth factors – the desire to avoid
piecemeal litigation and the order in which each forum obtained
jurisdiction – weigh in favor of a stay.
The Underlying Action
was filed first and has proceeded further than the instant case
Moreover, the issues related to the determination of who
is liable for Kalei-Imaizumi’s injuries are squarely presented
in the Underlying Action, whereas they are secondary issues to
the claims in the instant case.
The fifth factor is neutral
because, although the instant case raises only Hawai`i law
claims, this Court is fully capable of applying the relevant
The sixth factor and the eighth factor –
whether the state court proceedings will adequately protect the
federal party’s rights and whether they will resolve all issues
in the federal case – weigh slightly against a stay.
the Great Divide Cross-claim and the Underlying Cross-claims are
similar, it does not appear that they are identical.
it is unclear at this point how the state court will handle the
Great Divide Cross-claim after remand.
Thus, this Court cannot
find either that the Underlying Action will resolve all of the
issues in the instant case or that the Underlying Action will
adequately protect the rights of the parties involved in the
Finally, the seventh factor is inapplicable
because there is no indication that any party involved in the
relevant cases has engaged in forum shopping.
Having considered all of the applicable factors, this
Court finds that the third and fourth factors are the most
In the exercise of its discretion,4 this Court
concludes that a stay of the proceedings on the Cross-claim is
Further, this Court finds that, for the reasons
identified in Fed. R. Civ. P. 42(g), the stayed proceedings on
the Cross-claim must be severed from the other claims in the
The Motions are granted insofar as the
proceedings on the Cross-claim are hereby stayed and severed
from the remainder of the case.
This Court has the discretion to stay pending proceedings
as part of its inherent authority. See, e.g., Grindling v.
Shibao, CV. NO. 16-00426 DKW-RLP, 2017 WL 2661630, at *1 (D.
Hawai`i June 20, 2017) (quoting Landis v. N. Am. Co., 299 U.S.
248, 254 (1936); CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir.
III. Lifting the Stay
Within seven days after the state court has issued its
final judgment in the Underlying Action, Stevens’s counsel shall
submit a letter to this Court requesting that a status
conference be scheduled.
The status conference will address,
inter alia: 1) whether any appeal has been filed from the
judgment in the Underlying Action; 2) the status of the Great
Divide Cross-claim; and 3) whether the stay in the instant case
should be lifted.
After the stay has been lifted, a deadline
will be issued for the filing of Stevens’s amended cross-claim.
Any party to the Cross-claim may request that the stay
be lifted in order to dismiss the Cross-claim with prejudice,
either based on the parties’ agreement or if Stevens decides not
to pursue the claims in the Cross-claim.
If any party to the
Cross-claim believes that the stay should be lifted for any
reason not described in this Order, that party must submit a
letter to this Court setting forth the reasons why the stay
should be lifted.
After reviewing the letter, this Court may
schedule a status conference or direct the party to file a
motion to lift the stay.
On the basis of the foregoing, HCC’s October 23, 2018
Motion to Dismiss and/or Stay and Sever Defendant/Cross-claimant
Mark David Stevens’ Cross-claim; KCC’s November 13, 2018 motion
with the same title; and HCRA’s December 6, 2018 joinders of
simple agreement in the Motions are HEREBY GRANTED.
Cross-claim, filed July 26, 2018, is DISMISSED WITHOUT
Further, the proceedings on Stevens’s Cross-claim
are HEREBY STAYED pending the resolution of the Underlying
Action, and the stayed proceedings are HEREBY SEVERED from the
proceedings on the other claims in this case.
The stay may be
lifted, when appropriate, for the reasons described in this
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAI`I, March 29, 2019.
UNITED STATES FIRE INSURANCE COMPANY VS. HAWAI`I CANOE RACING
ASSOCIATION, ET AL; CV 18-00212 LEK-RLP; ORDER GRANTING MOTIONS
TO DISMISS AND/OR STAY AND SEVER CROSS-CLAIM AND GRANTING
JOINDERS IN THE MOTION
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