Link et al v. American Family Mutual Insurance Company

Filing 37

ORDER granting defendant's 24 Motion to Stay Pending Appeal by Judge Richard A Jones.(RS)

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THE HONORABLE RICHARD A. JONES 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 11 KATHLEEN LINK and RUSSELL LINK, NO. 2:16-cv-01117-RAJ 12 Plaintiffs, vs. 13 14 15 ORDER AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant. 16 17 This matter comes before the Court on Defendant American Family Mutual 18 19 Insurance Company’s motion to stay this action pending appeal of a related judgment 20 in Washington State superior court. Dkt. 24. Plaintiffs Kathleen and Russell Link 21 oppose Defendant’s motion. For the reasons that follow, the Court GRANTS 22 23 24 25 26 Defendant’s motion. I. BACKGROUND The following facts are undisputed. Plaintiff Kathleen Link and her daughter, Vanessa, were injured when their vehicle has hit by another vehicle driven by Yen ORDER - 1 1 Wally. Wally was insured by Defendant American Family Mutual Insurance 2 Company. Plaintiffs filed suit against Wally and her husband, Edison Wally, in 3 Snohomish County Superior Court. Plaintiffs entered into a stipulated judgment with 4 5 the Wallys, which assigned Plaintiffs any claims arising out of the Wallys’ insurance 6 contract with Defendant. The superior court found the stipulated judgment reasonable, 7 a finding which Defendant is currently challenging on appeal. 8 After entering into the stipulated judgment—and stepping into the shoes of the 9 10 Wallys—Plaintiffs brought the instant suit asserting various claims against Defendant, 11 including breach of contract, breach of fiduciary duty, bad faith, and violations of the 12 Unfair Claims Practices Act, Washington Consumer Protection Act, and Insurance 13 Fair Conduct Act. Plaintiffs and Defendant have each moved for summary judgment. 14 15 However, Defendant now moves to stay the proceeding and postpone resolution of the 16 summary judgment motions while its appeal of the superior court’s reasonableness 17 finding is pending. Plaintiffs oppose the motion. 18 LEGAL STANDARD 1 II. 19 “It is well-established that a district court possesses the power to stay cases, 20 21 which is incidental to the ‘inherent power to control its docket and promote efficient 22 use of judicial resources.’” Trotsky v. Travelers Indem. Co., 2013 WL 12116152, at 23 24 1 25 26 The parties disagree on the correct standard for determining whether a stay should be granted pending appeal. Defendant has supplied the Court with a Washington state-law standard, while Plaintiffs insist that the federal preliminary-injunction standard applies. Neither party is correct. Each cites a standard a court would use when determining whether to stay the enforcement of a court order pending appeal of that particular order, rather than the standard the district court would apply when determining whether to hold the entire proceeding in abeyance pending the outcome of a completely independent proceeding, like the state appeal at issue here. ORDER - 2 1 *1 (W.D. Wash. April 5, 2013) (quoting Dependable Highway Exp., Inc. v. Navigators 2 Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007)). “A trial court may, with propriety, find 3 it is efficient for its own docket and the fairest course for the parties to enter a stay of 4 5 an action before it, pending resolution of independent proceedings which bear upon 6 the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (1979). 7 However, the Court’s discretion to grant a stay is not unfettered. A district 8 court should consider a number of factors in determining whether to grant a stay. 9 10 First, “if there is even a fair possibility that the stay . . . will work damage to someone 11 else,” the stay may be inappropriate absent a showing by the moving party of a “clear 12 case of hardship or inequity.” Landis v. North Am. Co., 299 U.S. 248, 255 (1936). 13 Second, a stay should generally not be granted “unless it appears likely the other 14 15 proceedings will be concluded within a reasonable time.” Leyva, 593 F.2d at 864. 16 Third, “courts more appropriately enter stay orders where a party seeks only damages, 17 does not allege continuing harm, and does not seek injunctive or declaratory relief 18 since a stay would result only in a delay in monetary recovery.” Trotsky, 2013 WL 19 20 12116152, at *2 (citing Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 21 2005)). 22 III. 23 DISCUSSION Defendant argues that a stay is appropriate because a reversal of the superior 24 25 26 court’s judgment would strip Plaintiffs of standing in this case. Indeed, the viability of Plaintiffs’ bad-faith claims depends on the validity of the stipulated judgment. If the judgment is reversed by the state court of appeals, then Plaintiffs—who do not have an ORDER - 3 1 insurance contract with Defendant—will not have standing to bring the claims that 2 form the basis of this suit. 3 Plaintiffs counter that a stay would “substantially injure” them because: (1) they 4 5 “have a strong interest in finality”; and (2) the monetary judgment imposed by the 6 superior court remains unsatisfied while the appeal is pending. Pls.’ Resp., Dkt. 29 at 7 7. But a stay in this proceeding has no effect on the finality of the Plaintiffs’ judgment 8 in the state court. Nor will it prevent the Wallys, who are not a party to the instant 9 10 suit, from paying the damages they owe to Plaintiffs under the stipulated judgment. 11 Further, Plaintiffs are seeking only monetary damages in this case and do not allege 12 any continuing harm that would necessitate immediate relief. 13 Neither party addresses whether the appeal will be resolved within a reasonable 14 15 time, but the briefing schedule provided by Defendant indicates that the Washington 16 Court of Appeals is fully briefed and ready to consider the appeal. Def.’s Mot., Dkt. 17 24 at 3. The Court is, therefore, satisfied that the matter will be resolved in a 18 reasonable time and grants Defendant’s motion to stay the proceeding. The pending 19 20 motions for summary judgment are continued until such time as the court of appeals 21 determines whether the superior court erred in its determination that the stipulated 22 judgment—including the assignment of the Wallys’ claims to Plaintiffs—was 23 reasonable. 24 25 26 IV. CONCLUSION For all the foregoing reasons, the Court GRANTS Defendant’s motion for stay pending appeal. The parties shall provide notice to the Court immediately upon the ORDER - 4 1 resolution of the pending appeal and brief the Court on its effect on this 2 proceeding. 3 4 5 Dated this 8th day of May, 2017. 6 A 7 8 9 The Honorable Richard A. Jones United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER - 5

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