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Progressive Casualty Insurance Co. v. Soto

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


February 16, 2010

PROGRESSIVE CASUALTY INSURANCE COMPANY, PLAINTIFF,
v.
FRANCISCO SOTO, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge

ORDER DENYING DEFENDANTS OR IN THE ALTERNATIVE, MOTION TO STAY [Docket No. 32] RUBEN GARCIA AND REBECA GARCIA'S MOTION TO DISMISS,

This matter comes before the court on Defendants Ruben Garcia and Rebeca Garcia's motion to dismiss, or in the alternative, motion to stay. Plaintiff filed its opposition to the motion on January 21, 2010,*fn1 and Defendants filed their reply on January 28, 2010. For the reasons discussed below, the Court denies the motion.

I. BACKGROUND

On June 28, 2006, Plaintiff Progressive Casualty Insurance Company ("Plaintiff") issued an insurance policy to Defendants Omega Transport and Francisco Soto. The Policy provided liability coverage relating to certain vehicles, including a 1984 Peterbilt truck. On June 28, 2006, Defendant Ruben Garcia was involved in an accident while driving the truck on Interstate 8.

On June 5, 2008, Defendant Garcia and his wife, Rebeca, filed a Complaint in San Diego Superior Court alleging claims of negligence and loss of consortium arising out of the accident. The Complaint names Carrizo Gorge International Aggregates, Inc., Carrizo Gorge Railway, Inc., Francisco Soto, Connie Truc, Khiem Tran, Valente Uribe and Omega Transport as Defendants. That case is currently pending.

On October 2, 2009, Plaintiff filed the present Complaint in this Court alleging a claim for declaratory relief. Specifically, Plaintiff seeks a determination about whether Mr. Garcia is an "insured" under the Policy such that an exclusion would apply, thereby negating Plaintiff's duty to defend and/or indemnify the defendants in the state court action. This Court has entered defaults against Defendants Carrizo Gorge International Aggregates, Inc. and Carrizo Gorge Railway, Inc. Defendants Soto, Truc, Tran, Uribe and Omega Transport have just recently been served, and Defendants Ruben and Rebeca Garcia filed the present motion.

II. DISCUSSION

The Garcia Defendants assert this Court has discretion to decide this case under the Declaratory Judgment Act. They argue the Court should exercise that discretion, and either dismiss or stay this case pending a decision in the related state court case of Garcia v. Carrizo Gorge Int'l Aggregates, Inc., San Diego Superior Court Case Number 37-2008-00085174-cu-pa-ctl.

"In Brillhart v. Excess Insurance Company of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942), the Supreme Court held expressly that a district court should consider several factors when determining whether to exercise jurisdiction over a declaratory relief claim regarding state law issues." Smith v. Lenches, 263 F.3d 972, 977 (9th Cir. 2001). Those factors include: (1) "the scope of the pending state court proceeding and the nature of defenses open there[,]"(2) "whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding," (3) "whether necessary parties have been joined," and (4) "whether such parties are amenable to process in that proceeding[.]" Brillhart, 316 U.S. at 495. Additional factors include: "(1) whether a refusal to entertain the request for declaratory relief avoids needless decisions of state law by the federal court; (2) whether the action is a means of forum shopping; and (3) whether dismissal of the claim for declaratory relief would avoid duplicative litigation." Smith, 263 F.3d at 977 (citing Cont'l Cas. Co. v. Robsac Indus., 947 F.2d 1367, 1371 (9th Cir. 1991)).

Starting with the first factor, the state court proceeding alleges two state law claims:

Negligence and loss of consortium. Defendants argue this case involves state law issues, namely contract interpretation, therefore this case should be stayed pending resolution of the state court case. That both cases involve state law issues, however, is not dispositive. Rather, the Court must consider the scope of the claims, and here, the scope of the claims does not overlap. The nature of the legal claims and the elements involved in each are entirely different. Therefore, this factor does not warrant dismissal or a stay.

Other factors also do not warrant dismissal or a stay. The claim at issue here involves a determination of whether Mr. Garcia was an "insured" under the policy. Defendants assert this issue will be resolved by the state court defendants' seventh affirmative defense, which alleges Mr. Garcia was an employee of the defendants and is therefore barred from bringing suit under the Workers Compensation Act. However, whether Mr. Garcia was an employee under the Workers Compensation Act is not the same as whether he was an "insured" under the policy. Accordingly, Plaintiff's claim will not be resolved in the state court proceeding, but rather, must be resolved here. The difference in the issues raised here and in the state court proceeding also eliminates the risk of duplicative litigation and inconsistent decisions, and refutes Defendants' assertion that Plaintiff is engaged in forum shopping.

III. CONCLUSION

After considering the relevant factors identified above, the Court finds it would be inappropriate to decline to exercise jurisdiction over this case. Accordingly, Defendants' motion to dismiss or stay is denied.

IT IS SO ORDERED.


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