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GOOD v. PRUDENTIAL INS. CO. OF AMERICA

April 16, 1998

WALTER L. GOOD, Plaintiff,
v.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA; BARBARA MAGID; and DOES 1 through 50, Defendants.



The opinion of the court was delivered by: WILKEN

ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND GRANTING DEFENDANT'S MOTION TO STAY

 Plaintiff Walter L. Good moves to remand this case to State Court and seeks attorneys' fees incurred as a result of the removal. Defendant Prudential Insurance Company of America ("Prudential") opposes. Prudential moves separately to stay all proceedings in this case pending a final decision by the Judicial Panel on Multidistrict Litigation ("the MDL Panel") whether to transfer this case. Mr. Good opposes. The matter was decided on the papers. Having considered all of the papers filed by the parties, the Court denies the motion to remand and grants the motion to stay.

 BACKGROUND

 On January 21, 1998, Mr. Good filed a complaint in the Marin County Superior Court against Prudential and Defendant Barbara Magid, a Prudential insurance agent. Mr. Good alleges that in February, 1994, he met with Ms. Magid and Dianne Garcia, a Prudential insurance agent not named in the complaint, to discuss the possibility of purchasing an additional insurance policy with Prudential. *fn1" According to Mr. Good, Ms. Magid made numerous representations concerning the benefits of a variable appreciable life insurance policy ("VAL"). Mr. Good alleges that Ms. Magid told him that Mr. Good could obtain a $ 1,000,000 VAL by paying an annual premium of $ 10,000 for three to six years, after which time the premiums would "vanish." Complaint at P 11. According to Mr. Good, he bought a $ 1,000,000 VAL based on this representation.

 Mr. Good alleges that Prudential never intended to allow his premiums to vanish after three to six years. He alleges further that Prudential's misrepresentations to the contrary were part of a nationwide pattern of deceptive conduct by Prudential. Complaint at P 12. Mr. Good asserts claims for fraud, negligent misrepresentation, unfair competition, and money had and received against Prudential and Ms. Magid. He also asserts a claim for recision against Prudential.

 On March 6, 1998, Prudential removed the case to this Court, asserting diversity jurisdiction. Prudential argued in the notice of removal that diversity jurisdiction exists even though Ms. Magid and Mr. Good are both citizens of California because Ms. Magid is a sham Defendant. On March 10, 1998, four days after removing the case, Prudential filed a notice of related action in In re the Prudential Insurance Company of America Sales Practices Litigation, MDL Docket No. 1061, a matter pending in the New Jersey District Court.

 Mr. Good moves to remand this case to Superior Court, asserting that Ms. Magid was properly joined as a Defendant because she is personally liable for her misrepresentations to Mr. Good. Prudential responds that the undisputed evidence in the case indicates that Ms. Magid was not involved in this sale of the VAL, and that, even if she were, she is not a proper Defendant because she acted at all times as Prudential's agent in the course and scope of her agency.

 Prudential also moves to stay the proceedings in this case pending final decision by the MDL panel, which, on March 26, 1998, issued a conditional order of transfer of this case. Prudential argues that a temporary stay is appropriate to achieve the judicial economies that underlie 28 U.S.C. § 1407. Mr. Good responds that such a stay will prejudice him.

 DISCUSSION

 I. Legal Standards

 A. Motion to Remand

 Title 28 U.S.C. § 1447 provides that if, at any time before judgment, it appears that the district court lacks subject matter jurisdiction over a case previously removed from State court, the case must be remanded. 28 U.S.C. § 1447(c). The Ninth Circuit has held that courts should resolve doubts as to removability in favor of remanding the case to State court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

 B. Motion to Stay

 The power to stay proceedings is within the Court's discretion. The Supreme Court has described the power to stay proceedings as "incidental to the power inherent in every court to manage the schedule of cases on its docket to ensure fair and efficient adjudication." Landis v. North ...


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