WESTWOOD PRODUCTS, INC. v. GREAT AMERICAN E & S INSURANCE COMPANY

Filing 72

OPINION. Signed by Judge Mary L. Cooper on 4/25/2013. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

WESTWOOD PRODUCTS, INC.,

CIVIL ACTION NO. 10-3605 (MLC)

Plaintiff,

O P I N I O N

v.
GREAT AMERICAN E & S INSURANCE
COMPANY, et al.,
Defendants.

IT APPEARS, as detailed in the Court’s Order to Show Cause,
dated March 15, 2013, that the plaintiff, Westwood Products, Inc.
(“Westwood”), is a defendant in an action pending before the
Ontario Superior Court of Justice (“the Canadian Action”).

(See

dkt. entry no. 68, 3-15-13 Order to Show Cause (“OTSC”) at 1.)
Westwood brings this action against the defendants, Great American
E & S Insurance Company (“the Insurer”) and Norman Spencer McKernan
Agency (“the Insurance Agent”) seeking a judgment: (1) declaring
that the Insurer is obligated to defend and indemnify Westwood in
the Canadian Action; and (2) holding the Insurance Agent liable for
any defense costs and indemnification not provided by the Insurer.
(See id. at 2.)
THE COURT earlier ordered the parties to show cause why this
action should not be either stayed and administratively terminated,
or dismissed.

(See generally id. at 3-8.)

The Court noted in the

3-15-13 OTSC that the proposed courses of action were supported by
the principles underlying the Wilton-Brillhart abstention doctrine,
principles of international comity, and the Court’s inherent power
to control the docket.

(See id. at 3-6.)

WESTWOOD has responded to the 3-15-13 OTSC, indicating that it
does not oppose a stay of this action while it proceeds: (1) in
state court, seeking declaration that the Insurer must defend it in
the Canadian Action; and (2) in the Ontario Superior Court of
Justice, defending itself against in the Canadian Action.
dkt. entry no. 69, Westwood Response, at 1, 5-6, 8-9.)

(See

It appears

that Westwood has, since filing its response to the 3-15-13 OTSC,
commenced an action in the New Jersey state court system.

(See id.

at 5-6 (referencing action brought before the New Jersey Superior
Court, Middlesex County (“State Court”), at number L-002320-13
(“the State Court Action”).)
THE INSURER has also responded to the 3-15-13 OTSC.
entry no. 70, Insurer Response.)

(See dkt.

The Insurer does not oppose a

stay of this action, insofar as it concerns the Insurer’s duty to
indemnify Westwood in the Canadian Action.

(See id. at 2 (stating

that it is “eminently sensible” to refrain from adjudicating that
issue).)

But the Insurer’s support for a stay of this action,

insofar as it concerns the Insurer’s duty to defend Westwood in the

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Canadian action, is conditioned on its request that this Court
enjoin prosecution of the State Court Action.

(See id. at 2-3.)

THE INSURANCE AGENT has not responded to the 3-15-13 OTSC,
and is thus deemed to unconditionally support a stay of this
action.

(See 3-15-13 OTSC at 7.)

THE COURT has considered the responses filed by both Westwood
and the Insurer.

Because it appears that neither these parties nor

the Insurance Agent meaningfully oppose a stay of this action, the
Court will enter a separate order, staying and administratively
terminating this action.

The Court notes for the benefit of the

parties that such an administrative termination is not equivalent
to a dismissal of the Complaint with prejudice.

See Delgrosso v.

Spang & Co., 903 F.2d 234, 236 (3d Cir. 1990) (stating that
administrative termination “permits reinstatement and contemplates
the possibility of future proceedings,” and “does not purport to
end litigation on the merits”).
THE COURT, in staying the action, will not entertain the
Insurer’s informal request to enjoin prosecution of the State Court
Action.

The Insurer has not properly moved for relief.

L.Civ.R. 7.1.

See, e.g.,

Moreover, the Insurer has failed to persuade the

Court that a federal district court may, in the circumstances
presented here, enjoin state court proceedings.
Response at 2-3.)

(See Insurer

Contra 28 U.S.C. § 2283 (“A court of the United

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States may not grant an injunction to stay proceedings in a State
court except as expressly authorized by Act of Congress, or where
necessary in aid of its jurisdiction, or to protect or effectuate
its judgments.”); Nongard v. Burlington Cnty. Bridge Comm’n, 229
F.2d 622, 625 n.2 (3d Cir. 1956) (noting that § 2283 language
referencing district court’s authority to enjoin state proceedings
“in aid of its jurisdiction” merely “make[s] clear the recognized
power of the Federal courts to stay proceedings in State cases
removed to the district courts.”).

Further, “[t]here is nothing

necessarily inappropriate . . . about filing a protective action.”
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 294
n.9 (2005) (citing with approval Gov’t of V.I. v. Neadle, 861
F.Supp. 1054, 1055 (M.D. Fla. 1994), which stayed action brought by
plaintiffs “to protect themselves” against chance that identical
action, brought in a different district court, was dismissed for
lack of jurisdiction).

If the Insurer wishes to enjoin prosecution

of the State Court Action, then the Insurer should take appropriate
action before the State Court.

s/ Mary L. Cooper
.
MARY L. COOPER
United States District Judge

Date:

April 25, 2013

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