Gutierrez et al v. Allied Professionals Insurance Company

Filing 40

ORDER DENYING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT, AND GRANTING DEFENDANT'S REQUEST FOR A STAY; denying 19 Motion for Entry of Default Judgment; striking 21 Stipulated Motion for Order Re Service and Withdrawal of Motion for Default; granting in part (stay) and denying in part (dismiss) 24 Motion to Dismiss, or in the Alternative, Stay Proceedings. Signed by Senior Judge Edward F. Shea. (CV, Case Administrator)

1
2
3
4
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

5
6
7
8

ELISEO GUTIERREZ and VERONICA
GUTIERREZ, husband and wife, and
DR. MICHAEL SCOTT ANGLESEY,
individually,

9
Plaintiffs,
10

No.

4:15-CV-5033-EFS

ORDER DENYING PLAINTIFFS’ MOTION
FOR DEFAULT JUDGMENT, AND
GRANTING DEFENDANT’S REQUEST FOR
A STAY

v.
11
12

ALLIED PROFESSIONALS INSURANCE
COMPANY, a Risk Retention Group,
Inc. an Arizona Corporation,

13
Defendant.
14
15
This Order serves to supplement and memorialize the Court’s oral
16
ruling on the three pending motions, which were heard on September
17
23, 2015.1

For the reasons that follow, the Court stays this matter

18
until the Central District of California resolves Defendant Allied
19
Professionals

Insurance

Co.’s

(APIC)

to-be-filed

motion

seeking

20
relief from that court’s prior decision and the Ninth Circuit reacts
21
to that ruling.
22
//
23
/
24
25

1

26

appeared on Defendant’s behalf.

Andrea Clare appeared on Plaintiffs’ behalf, and David Schoeggl

ORDER - 1

1

A.

Factual and Procedural Background2
Eliseo Gutierrez sought chiropractic treatment from Dr. Michael

2
3

Anglesey in December 2012.

Complaint, ECF No. 3 ¶ 3.2.

4

visit on December 13, 2012, Mr. Gutierrez fell ill, either while

5

waiting for chiropractic treatment or after receiving chiropractic

6

treatment, and was taken to the hospital.

7

determined 34-year-old Mr. Gutierrez suffered a bilateral vertebral

8

artery dissection, causing a stroke and severe neurological trauma.

9

Id. ¶¶ 3.2-3.3.

Id. ¶ 3.2.

During a

The hospital

The next day, Dr. Anglesey followed up with Mrs.

10

Gutierrez to see how Mr. Gutierrez was doing.

11

him of Mr. Gutierrez’s condition and thanked him for the call.

12

was

13

Gutierrez’s condition during this telephone call.

no

discussion

that

chiropractic

care

Mrs. Gutierrez advised

was

the

cause

There
of

Mr.

Later, Mrs. Gutierrez inquired with medical personnel as to the

14
15

potential causes of her husband’s condition.

16

the hospital physicians that Mr. Gutierrez’s artery dissection was

17

caused by a cervical adjustment.

18

the Washington State Department of Health against Dr. Anglesey.
On

19
20

Health

January
sent

Dr.

28,

2013,

Anglesey

the
a

It was determined by

Mrs. Gutierrez filed a claim with

State
letter,

of

Washington

which

Department

informed

him

of

of
an

21
22

2

23

documents

24

appear undisputed based on the present record.

25

129 S. Ct. 1937, 1949 (2008); United States v. Ritchie, 342 F.3d 903

26

(9th Cir. 2003).

This background is based on the Complaint’s factual allegations, the

ORDER - 2

and

court

cases

referenced

therein,

and

any

facts

that

See Ashcroft v. Iqbal,

1

investigation

2

negligence or malpractice.”

3

assigned to an investigator but did not identify the name of the

4

complainant or provide any information about the complaint.

5

3 ¶ 3.4.

6

related to the Gutierrezes.

7

regarding

a

complaint

of

alleged

“incompetence,

This letter advised that the matter was

ECF No.

Dr. Anglesey did not suspect that this investigation was

One month after receiving this letter, Dr. Anglesey submitted an

8

application

to

renew

his

professional

malpractice

9

Allied Professional Insurance Co. (APIC).

insurance

with

ECF No. 3 ¶ 3.5.

Dr.

10

Anglesey had purchased professional liability policies from APIC for

11

approximately eight years.

12

for the March 2, 2013, to March 2, 2014 period doubled as an invoice.

13

Id. ¶ 3.5.

14

“no” to the following questions:

15

Id. ¶ 3.1.

The single-page renewal form

On the single-page renewal form, Dr. Anglesey answered



Since your last renewal has any agency or association
investigated or taken action against you or your license?



Since your last renewal, has any malpractice allegation
been asserted against you or your associates, or has
there been any event or indication suggesting a claim may
be made or that your care might have been deficient or
cased harm?

16
17
18
19
Dr. Anglesey faxed in his renewal form and invoice to APIC, which
20
stamped it “received” on February 29, 2013.

Id. ¶ 3.5.

APIC issued

21
Dr. Anglesey a claims-made policy, covering the period of March 2,
22
2013, through March 2, 2014.

This policy includes an arbitration

23
clause, which states:
24
25
26

All disputes or claims involving the Company shall be
resolved by binding arbitration, whether such dispute or
claim arises between the parties to this Policy, or between
the company and any person or entity who is not a party to

ORDER - 3

the Policy but is claiming rights either under the Policy
or against the Company. . . . The arbitration shall occur
in Orange County, California.
The laws of the State of
California shall apply to any substantive, evidentiary or
discovery issues.

1
2
3
4

ECF No. 35 ¶ 13.
In March 2013, the Washington State Department of Health (DOH)

5
6

wrote

Dr.

Anglesey

7

complainant as Mr. Gutierrez and requesting his full and complete

8

patient

9

Gutierrez’s

records.

regarding

ECF

complaint

No.
to

3

¶

APIC

“2013-269CH,”

3.6.
on

or

identifying

Dr.

Anglesey

before

April

reported
1,

2013,

10

requested that APIC assist him with the DOH investigation.

11

3.7.

12

Id.

the

Mr.
and

potential malpractice claim involving Mr. Gutierrez.

On April 22, 2013, Dr. Anglesey again informed APIC of the

On April 26, 2013, APIC sent two letters to Dr. Anglesey.

13

¶

ECF

14

No. 3 ¶ 3.8.

15

advised that the APIC policy did not provide coverage for the April

16

22,

17

Anglesey’s renewal application and advised that APIC determined that

18

Dr. Anglesey violated his policy’s application warranty by failing to

19

disclose the potential Gutierrez claim on the renewal application in

20

February 2013.

21

opportunity to provide information regarding his non-disclosure no

22

later than May 10, 2013.

23

The first letter discussed the DOH investigation and

2013-tendered

claim.

Id.

Id. ¶ 3.9.

The

second

letter

discussed

Dr.

This letter offers Dr. Anglesey the

Id.

On May 7, 2013, Dr. Gutierrez provided APIC with information;

24

however, APIC did not alter its determination.

25

rescinded both the 2012-13 policy and the 2013-14 policy.

26

ORDER - 4

On May 30, 2013, APIC
ECF No. 3

1

¶ 3.10.

APIC refunded the premiums that Dr. Anglesey had paid.

2

Dr.

Anglesey kept the refunded money.
On June 20, 2013, letters were sent to Dr. Anglesey and the

3
4

Gutierrezes

from

the

DOH,

stating

5

investigation the Chiropractic Commission closed the case because of

6

insufficient evidence.”

7

the Gutierrezes retained an attorney.

8

Gutierrezes offered to settle all claims against Dr. Anglesey for $3

9

million, which is believed to be the full applicable policy limits of

Id. ¶ 3.11.

that

“[b]ased

upon

our

Upon receiving DOH’s letter,
Id. ¶¶ 3.12 & 3.13.

10

Dr. Anglesey’s liability policy with APIC.

11

2014, Dr. Anglesey’s counsel demanded that APIC provide coverage for

12

the Gutierrez claim and advised that Dr. Anglesey intended to consent

13

to judgment as to the Gutierrezes’ claims because he lacked the funds

14

and resources to defend the Gutierrez lawsuit and requested that APIC

15

reconsider its coverage denial and its decision not to defend Dr.

16

Anglesey.

17

coverage and rejected any obligation to defend Dr. Anglesey.

18

3.14.

ECF No. 3 ¶ 3.13.

Id. ¶ 3.15.

The

On March 25,

APIC reaffirmed its decision to deny
Id. ¶

On April 28, 2014, APIC filed a lawsuit in the Central District

19
20

of

California,

21

arbitrate

the

22

provision

or

23

rescission of the insurance policy.

24

8:14-CV-00665-CBM).

25

California federal lawsuit and moved to dismiss the lawsuit.

26

3 ¶ 3.16.

ORDER - 5

seeking
dispute

a

court

under

alternatively

the

order

requiring

insurance

for

the

policies’

declaratory

parties

to

arbitration

relief

regarding

ECF No. 24, Ex. A (Case No.

Dr. Anglesey and the Gutierrezes appeared in the
ECF No.

On May 19, 2014, the Gutierrezes filed a lawsuit against Dr.

1
2

Anglesey in Benton County Superior Court.

3

14-2-01315-6 (Benton County Superior Court).

4

Gutierrezes and Dr. Anglesey agreed to settle the state court lawsuit

5

for a $3,000,000 consent judgment in favor of the Gutierrezes, a

6

covenant not to execute the consent judgment, and an assignment to

7

the

8

contingent

9

reasonableness and entering judgment.

10

Gutierrezes

On

of

on

May

the

28,

Dr.

state

2014,

to

of

find

the

Anglesey’s

court

against

the

APIC,

settlement’s

ECF No. 29 at 6-7.
asked

County

Washington law, and notice was provided to APIC of the reasonableness

13

hearing.

14

arguing

15

District of California lawsuit.

16

reasonableness

17

voluntarily dismissed its state-court lawsuit against Dr. Anglesey

18

without prejudice on July 31, 2014.

19

The Gutierrezes chose this approach as APIC filed a motion to compel

20

arbitration in the California federal court on June 19, 2014, and

21

therefore

22

defend the California federal lawsuit.
In

the

the

the

state

of

California

should

under

needed

federal

not

intrude

on

the

Central

Before the state court ruled on the

proposed

Gutierrezes

reasonable

APIC opposed the Gutierrezes’ request,

court

the

was

Benton

12

that

settlement

the

Superior

ECF No. 29 at 7.

the

rights

approving

Gutierrezes

that

On May 20, 2014, the

11

23

Court

all

Gutierrez v. Anglesey, No.

settlement,

the

Gutierrezes

ECF No. 3 ¶ 3.18; ECF No. 29-2.

to

locate

California

counsel

to

ECF No. 29-2.

lawsuit,

the

Gutierrezes

filed

a

24

motion to dismiss for lack of personal jurisdiction and failure to

25

state a claim.

26

Marshall heard argument on September 8, 2014.

ORDER - 6

ECF No. 29, Exs. A & B.

Federal Judge Consuelo
On January 15, 2015,

1

Judge Marshall entered an Order dismissing the federal lawsuit on the

2

grounds the court lacked subject matter jurisdiction, noting “[t]o

3

this Court’s knowledge, there has been no subsequent litigation or

4

settlement between any of the parties, nor is there a pending claim,”

5

ECF No. 29-3 at 3.

Judge Marshall did not address the Gutierrezes’

6

argument

federal

7

jurisdiction over them.
On

8
9
10

that

the

February

court

in

California

lacked

personal

Id. at 6.

10,

2015,

APIC

appealed

the

California

federal

court’s order of dismissal to the Ninth Circuit Court of Appeals,
Case No. 15-55231.

The appeal is pending.

11

On March 9, 2015, Dr. Anglesey and the Gutierrezes signed a

12

“Settlement Agreement, Assignment of Rights, Covenant not to Execute,

13

Duty to Cooperate, and Mutual Releases.”

14

of the agreement was to “forever settle and resolve all disputes,

15

claims and controversies that have been asserted, will be asserted,

16

or could have been asserted, by Gutierrez against Anglesey in the

17

lawsuit entitled Eliseo and Veronica Gutierrez v. Michael Anglesey

18

and Jane Doe Anglesey, which will be filed in Benton County Superior

19

Court . . . no later than 45 days of this agreement.”

20

In

21

against

22

Gutierrezes any and all rights that Dr. Anglesey maintained under the

23

2012 and 2013 professional liability policies issued by APIC.

24

agreement required the parties to “request a review by the Benton

25

County

26

settlement within 30 days of the lawsuit filing.” At the September

the

agreement,
him

in

Superior

ORDER - 7

Dr.

the

Court

Anglesey

amount

in

ECF No. 32-1.

stipulated

to

$3,000,000

and

of

regard

to

the

entry

The purpose

Id. at 1 ¶ A.
of

assigned

reasonableness

judgment
to

of

the

The

the

1

23, 2015 hearing, Plaintiffs’ counsel Ms. Clare advised the Court

2

that the Gutierrezes filed an ex parte motion in the Benton County

3

Superior Court to obtain a reasonableness determination; the Benton

4

County

5

reasonable without providing APIC notice or an opportunity to be

6

heard.3

Superior

Court

reportedly

determined

the

settlement

was

7

On April 6, 2015, the Gutierrezes and Dr. Anglesey filed this

8

lawsuit in the Eastern District of Washington against APIC, claiming

9

that

APIC

breached

its

duty

of

good

faith,

violated

Washington

10

Consumer Protection Act, and violated Washington’s Insurance Fair

11

Conduct Act in its dealings with Dr. Anglesey, and seeking a judicial

12

determination regarding insurance coverage and APIC’s duty to defend

13

Dr.

14

Complaint on APIC; however, APIC filed two motions to dismiss as it

15

deemed those service attempts deficient.

16

submits that it was properly served on June 19, 2015; and counsel for

17

APIC then contacted Plaintiffs’ counsel to discuss that it would

18

withdraw its motions to dismiss based on improper service.

19

28 at 2-3.

Anglesey.

ECF

No.

3.

Plaintiffs

took

steps

to

serve

ECF Nos. 7 & 11.

the

APIC

ECF No.

20

On June 30, 2015, APIC moved the Ninth Circuit to remand the

21

appealed matter back to the Central District of California on the

22

grounds

23

creates a case or controversy over which the Central District of

24

California has jurisdiction.

that

the

Gutierrezes

and

Dr.

Anglesey’s

ECF No. 24, Ex. B.

new

settlement

Recently, the Ninth

25
3

26

As the Court was not provided a copy of this ex parte motion or the Benton
County Superior Court’s order, the Court is unaware of the date of these
actions and the language contained on the documents.

ORDER - 8

1

Circuit

2

permitted the Central District of California to entertain a reopening

3

of

4

permission to file a renewed motion to remand with the Ninth Circuit.

5

Fed. R. App. P. 12.1(b).

the

denied

lawsuit

APIC’s

it

motion

to

dismissed,

and

remand

if

so,

without

then

prejudice

APIC

was

and

granted

ECF No. 38, Ex. 1.

6

On July 2, 2015, Plaintiffs sought default judgment against APIC

7

in this lawsuit because APIC had yet to file an answer following the

8

mailing of a summons and the Complaint, as well as other methods of

9

service.

ECF No. 20.

A week later APIC filed a Stipulated Motion

10

for Order Re Service and Withdrawal of Motion for Default, advising

11

the

12

service and therefore the Plaintiffs’ motion for default was moot so

13

long as APIC “answer[ed] or otherwise respond[ed] to the complaint by

14

July 16, 2015.”

15

Dismiss, or in the Alternative, Stay Proceedings.

16

Court

that

the

parties

ECF No. 21.

had

resolved

the

issues

relating

to

By that date, APIC filed a Motion to
ECF No. 24.

Days later, Plaintiffs’ counsel Andrea Clare filed a declaration

17

advising

18

Judgment had been premised on APIC filing an answer—not a motion to

19

dismiss.

20

counsel David Schoeggl, Ms. Clare understood that APIC would file an

21

answer; she had overlooked the reference to “or otherwise respond to

22

the complaint” in the follow-up email sent by Mr. Schoeggl.

23

26 at 3-4; ECF No. 26, EX. B.

24

agreed to withdraw the Motion for Default Judgment if APIC did not

25

file an answer, Plaintiffs ask the Court to rule on the Motion for

26

Default Judgment, ECF No. 19.

ORDER - 9

that

her

agreement

ECF No. 26.

to

withdraw

the

Motion

for

Default

Based on a telephone conversation with APIC’s

ECF No.

Because Plaintiffs would not have

ECF No. 26 at 5.

1

With this factual and procedural background, the Court turns to

2

the three pending motions: Plaintiffs’ Motion for Default Judgment,

3

ECF

4

Withdrawal of Motion for Default, ECF No. 21; and APIC’s Motion to

5

Dismiss, or in the Alternative, Stay Proceedings, ECF No. 24.

6

B.

No.

19;

the

“Stipulated”

Motion

for

Order

Re

Service

and

7

Plaintiffs’ Motion for Default Judgment and the “Stipulated
Motion” for Order Re Service and Withdrawal of Motion for
Default

8

Plaintiffs seek entry of a judgment by default against APIC

9

because APIC failed to answer within twenty-one days of service.
19.

APIC

opposes

10

No.

11

responsive

12

July 16, 2015, and contends that Plaintiffs ought to abide by their

13

counsel’s agreement to withdraw the motion for default.

document—its

the

motion

dismissal

contending

motion—by

the

that

it

ECF

filed

agreed-upon

a

date,

ECF No. 27.

14

Given Ms. Clare’s misunderstanding as to the parties’ agreement

15

regarding under what circumstances Plaintiffs would withdraw their

16

motion for default judgment, the Court declines to require Plaintiffs

17

to withdraw their motion and strikes the “Stipulated” Motion for

18

Order Re Service and Withdrawal of Motion for Default. The Court

19

turns to analyzing whether entry of default judgment is appropriate.

20

Under Federal Rule of Civil Procedure 55, obtaining a default

21

judgment is a two-step process.

22

be entered when the "party against whom a judgment for affirmative

23

relief is sought has failed to plead or otherwise defend."

24

Civ. P. 55(a).

25

default judgment may then file a motion for default judgment pursuant

26

to Rule 55(b).

ORDER - 10

First, under Rule 55(a), default may

Fed. R.

Once default has been entered, the party seeking a

The decision whether or not to grant default is

1

within the discretion of the district court.

Aldabe v. Aldabe, 616

2

F.2d 1089, 1092 (9th Cir. 1980).

3

grant or deny a motion for default and subsequent motion for default

4

judgment, the court considers the following factors:

In exercising its discretion to

(1) the possibility of prejudice to the plaintiff; (2) the
merits
of
plaintiff's
substantive
claim;
(3)
the
sufficiency of the complaint; (4) the sum of money at stake
in the action; (5) the possibility of a dispute concerning
material facts; (6) whether the default was due to
excusable neglect; and (7) the strong policy underlying the
Federal Rules of Civil Procedure favoring decisions on the
merits.

5
6
7
8
9

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
10
Here, Plaintiffs ask the Court to enter default judgment without
11
first seeking entry of default.

Local Rule 55.1 requires that the

12
moving party provide notice at least 14 days prior to the filing of
13
the motion for entry of default and file an affidavit stating that
14
this this notice requirement has been satisfied.

L.R. 55.1((a)(1) &

15
(2).

Plaintiffs failed to satisfy these procedural requirements.

16
Even if these procedural requirements had been met, the Court
17
declines to enter default against APIC.

APIC is defending itself:

18
APIC has filed

motions to dismiss based on improper service and

19
communicated to opposing counsel that it would file an answer or
20
otherwise respond to the Complaint, which it has now done.

None of

21
the Eitel factors, other than possibly the merits of Plaintiffs’
22
substantive claims, support entry of default under the circumstances.
23
In light of APIC’s continued interest in defending itself, the Court
24
finds justice requires that the merits of this dispute be resolved.
25
The next question is which court is the proper forum to resolve the
26

ORDER - 11

1

underlying

coverage

2

Plaintiffs’ state-law claims:

3

required

4

District of California.

5

forum question.

6

C.

by

the

dispute

insurance

between

the

parties

and/or

the

an arbitrator (as APIC maintains is

policies),

this

Court,

or

the

Central

APIC’s motion to dismiss addresses this

APIC’s Motion to Dismiss

7

In its motion, APIC asks the Court to dismiss this lawsuit

8

pursuant to Federal Rule of Civil Procedure 12(b) and the Court’s

9

inherent powers because the Central District of California lawsuit

10

was

the

first-filed

lawsuit

as

to

the

insurance-related

matters

11

between the parties, and Plaintiffs should be prevented from forum

12

shopping.

13

regarding APIC’s motion to remand pertaining to the Central District

14

of California, APIC asked the Court to consider staying the lawsuit

15

to permit APIC an opportunity to file a motion with the Central

16

District

17

dismissal order in light of the Plaintiffs’ new settlement agreement

18

and assignment of rights under the insurance policy.

19

oppose dismissal, transfer, or a stay of this lawsuit, arguing 1)

20

this

21

declaratory judgment lawsuit that APIC filed in federal court in

22

California, 2) a Washington court should hear their state-law claims

23

because RCW 49.18.200 invalidates the insurance policies’ arbitration

24

provision

25

Arbitration

26

inconvenient for the parties, witnesses, and attorneys.

At the hearing, given the Ninth Circuit’s recent ruling

of

California

state-law

ORDER - 12

and

tort

RCW

Act,

and

to

seek

lawsuit

is

49.18.200
3)

a

is

relief

from

substantially

not

California

that

by

would

be

prior

Plaintiffs

different

preempted
forum

court’s

the

from

the

Federal

costly

and

1

Beginning with the first-filed doctrine, this doctrine is a

2

well-settled judicial comity doctrine which permits one district to

3

decline

4

involving the same parties and

5

another district.

6

93, 95 (9th Cir. 1982); Church of Scientology of Cal. v. U.S. Dep’t

7

of Defense, 611 F.2d 738, 749-50 (9th Cir. 1979); Manuel v. Convergys

8

Corp.,

9

doctrine’s purpose is to prevent conflicting judgments and promote

10

judicial efficiency; accordingly, if these goals will not be served,

11

then a court need not abide by the first-filed doctrine.

12

Scientology of Cal., 611 F.3d at 750.

to

430

exercise

F.3d

jurisdiction

over

a

matter

if

a

complaint

issues has already been filed

in

Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d

1132,

1135

(11th

Cir.

2005).

The

first-filed

Church of

13

Plaintiffs submit that the Court need not apply the first-filed

14

doctrine because the Central District of California did not address

15

the merits of APIC’s declaratory judgment action once it determined

16

that no case or controversy existed.

17

of California determined no case or controversy existed because the

18

Gutierrezes and Dr. Anglesey at that time advised the court that they

19

were no longer seeking to settle the dispute between them, and the

20

Gutierrezes dismissed its state-court lawsuit against Dr. Anglesey.

21

Then,

22

ruling that no case or controversy existed, the Gutierrezes and Dr.

23

Anglesey entered into another substantially similar agreement.

within

two

months

of

the

However, the Central District

Central

District

of

California’s

24

Therefore, it was the Gutierrezes’ and Dr. Anglesey’s chosen

25

course of settlement and litigation-related conduct that caused the

26

Central District of California court to not reach the question of

ORDER - 13

1

arbitration or insurance validity. Under these circumstances, the

2

fact that the Central District of California did not reach the merits

3

in its declaratory judgment lawsuit is not a basis to not abide by

4

the first-filed doctrine.
Plaintiffs

5

also

submit

that

this

Court

should

exercise

6

jurisdiction because a Washington-based court, not a California-based

7

court,

8

Plaintiffs

9

provision is not valid under RCW 49.18.200. The Gutierrezes may be

should

hear

highlight

pursuant

that

to

Washington
the

RCW

state-law

insurance

49.18.200

tort

policies’

the

claims.

arbitration

10

correct

11

arbitration provision is invalid as applied to a Washington insured.

12

See State Dep’t of Transp. v. James River Ins. Co., 176 Wn.2d 390,

13

399 (2013); but see Speece v. Allied Prof’ls Ins. Co., 289 Neb. 75,

14

88 (2014).

15

before the Central District of California, if the court determines it

16

is

17

exercise subject matter or personal jurisdiction.

now

that

their

insurance

policies’

Nonetheless, Plaintiffs can bring this same argument

presented

with

a

case

or

controversy

over

which

it

can

18

Plaintiffs further argue that the Central District of California

19

could choose to decline to exercise jurisdiction over APIC’s lawsuit

20

brought under the Declaratory Judgment Act. See Evanston Ins. Co. v.

21

Workland & Witherspoon, PLLC, 2014 WL 4715879, *7 (E.D. Wash. Sept.

22

22, 2014) (citing case law on this point); Gov’t Employees Ins. Co.

23

v. Dizol, 133 F.3d 1220 (9th Cir. 1998); Brillhart v. Excess Ins. Co.

24

of Am., 316 U.S. 491, 494 (1942).

However, this line of federal-

25

court-abstention

a

26

abstain from exercising jurisdiction over a federal lawsuit brought

ORDER - 14

cases

apply

where

federal

court

is

asked

to

1

under the Declaratory Judgment Act because there is a state court

2

lawsuit involving the same issues and the same parties.

3

Court sits in Washington, it is a federal court—not a state court,

4

therefore this line of cases is inapposite.

Although the

Under the circumstances, the Court deems it appropriate to stay

5
6

this

lawsuit

to

permit

the

Central

District

of

California

an

7

opportunity to consider APIC’s to-be-filed motion seeking relief from

8

the court’s prior dismissal order, and the Ninth Circuit to consider

9

the Central District of California’s decision.

To ensure that this

10

lawsuit does not stay for an extended period of time, APIC must file

11

its motion with the Central District of California within fourteen

12

days (October 7, 2015).
Concerned

13

of

that

time

and

this
the

lawsuit
harm

will

that

be

stayed

this

delay

for

an

will

extended

14

period

cause

the

15

Gutierrezes, Plaintiffs’ counsel orally requested the Court to order

16

all motions pertaining to arbitration be filed within twenty-eight

17

days.

18

Judge Marshall and the Ninth Circuit, given their respective dockets,

19

may be unable to resolve the matters that will be brought before them

20

within twenty-eight days, the Court declines at this time to impose a

21

filing deadline for briefs related to arbitration, especially since

22

the question of what forum should resolve the question of arbitration

23

has

24

California and/or the Ninth Circuit fail to take action related to

25

APIC’s to-be-filed motion, by January 1, 2016, the Gutierrezes are

26

free to file a motion with this Court seeking relief from the stay.

Recognizing the Gutierrezes’ concern but also recognizing that

not

ORDER - 15

yet

been

determined.

Should

the

Central

District

of

1

For the reasons set forth above, IT IS HEREBY ORDERED:

2

1.

is DENIED.

3
4

The Gutierrezes’ Motion for Default Judgment, ECF No. 19,

2.

The “Stipulated” Motion for Order Re Service and Withdrawal

5

of Motion for Default, ECF No. 21, is STRICKEN as it was

6

not agreed upon by the parties.

7

3.

APIC’s

Motion

to

Dismiss,

or

in

the

Alternative,

Stay

8

Proceedings, ECF No. 24, is DENIED IN PART (dismiss) and

9

GRANTED IN PART (stayed pending the Central District of

10

California’s action on APIC’s to-be-filed motion, and the

11

Ninth Circuit’s related action).

12

4.

No later than fourteen days, APIC is to file its motion

13

seeking relief with the Central District of California.

14

APIC is to promptly file a copy of the Central District of

15

California’s

16

Central

17

dismissal,

18

Appeal’s decision.

19

5.

This

decision

District
then

lawsuit

is

of
a

with

this

California

copy

STAYED;

of

the

the

Court,

and

choose

to

Ninth

should

the

revisit

its

Circuit

scheduling

Court

of

conference

is

20

STRICKEN. If the Central District of California elects not

21

to

22

scheduling conference.

23

revisit

IT IS SO ORDERED.

its

dismissal,

the

Court

will

reset

the

The Clerk’s Office is directed to enter this

24

Order and provide copies to all counsel, the Ninth Circuit Court of

25

Appeals (Case No. 15-55231), and the Central District of California

26

(D.C. No. 8:14-cv-00665-CBH-SH).

ORDER - 16

1

DATED this

24th

day of September 2015.

2
s/Edward F. Shea
EDWARD F. SHEA
Senior United States District Judge

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Q:\EFS\Civil\2015\5033.motions.lc1.docx

ORDER - 17