Houston Specialty Insurance Company v. New Jax Condominiums Assoc., Inc. et al
Filing
54
ORDER AND REASONS granting 40 Motion to Stay pending resolution of the state court proceedings. Signed by Chief Judge Sarah S. Vance on 11/26/2013. (mmm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HOUSTON SPECIALTY INSURANCE
COMPANY
CIVIL ACTION
VERSUS
NO: 13-639
NEW JAX CONDOMINIUMS ASSOCIATION,
INC., et al.
SECTION: R(1)
ORDER AND REASONS
Before the Court is defendant 620 Decatur, LLC's motion to
stay pending resolution of state court proceedings.1 For the
following reasons, the motion is GRANTED.
New Jax Condominium Association ("New Jax") filed a state
court lawsuit against 620 Decatur, LLC ("Jax Bar"), claiming that
Jax Bar's music is too loud.2 Houston Specialty Insurance Company
("Houston Specialty"), Jax Bar's general liability insurer, filed
this action under the Declaratory Judgment Act, seeking a
declaratory judgment that it does not owe a duty to defend or
indemnify Jax Bar in the state court suit.3 Houston Specialty
moved for judgment on the pleadings, or, in the alternative,
summary judgment.4 The Court ruled that Houston Speciality has a
1
R. Doc. 40.
2
R. Doc. 1-2.
3
R. Doc. 1.
4
R. Doc. 22.
duty to defend Jax Bar in the underlying suit, but that the
question of whether it owes a duty to indemnify is premature.5
Specifically, the Court held that it would "not issue a
declaratory judgment on Houston Specialty's duty to indemnify Jax
Bar" until "liability in the underlying case has . . . been
determined."6
Jax Bar now moves to stay this action pending resolution of
the state court proceedings.7 Defendant New Jax agrees that the
case should be stayed, because Jax Bar's liability in the
underlying state court suit has not been determined.8 Houston
Specialty opposes the motion to stay on the ground that certain
policy provisions might establish that it does not have a duty to
indemnify, regardless of the results of the state court
proceedings.9
"[D]istrict courts possess discretion in determining whether
and when to entertain an action under the Declaratory Judgment
Act, even when the suit otherwise satisfies subject matter
jurisdictional prerequisites." Wilton v. Seven Falls Co., 515
U.S. 277, 282 (1995). As the Court previously concluded, the
5
R. Doc. 35.
6
Id. at 12.
7
R. Doc. 40.
8
R. Doc. 43.
9
R. Doc. 45 at 1.
2
question of whether Houston Specialty has a duty to indemnify Jax
Bar is premature, because Jax Bar's liability in the underlying
state court suit has not yet been determined.10 See Martco Ltd.
P'ship v. Wellons, Inc., 588 F.3d 864, 877 (5th Cir. 2009) ("in
assessing the duty to indemnify . . . we must apply the Policy to
the actual evidence adduced at the underlying liability trial")
(emphasis added). Further, determination of Houston Specialty's
duty to indemnify may prove unnecessary, if Jax Bar is found not
liable in state court. For these reasons, the Court exercises its
discretion to stay the proceedings until Jax Bar's liability is
determined in the underlying suit.
Accordingly,
IT IS ORDERED that Jax Bar's motion to stay pending
resolution of the state court proceedings is GRANTED. This matter
is administratively closed until such time as there is a motion
to reopen the case upon conclusion of the state court
proceedings.
26th
New Orleans, Louisiana, this ______ day of November, 2013.
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
10
R. Doc. 35 at 11-12.
3
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