United States District Court, D. Nevada
THERESA T. MALONE, Plaintiffs,
STATE FARM MUTUAL AUTO INSURANCE COMPANY, Defendants.
before the court is defendant State Farm Mutual Auto
Insurance Company's motion to dismiss. (ECF No. 5).
Plaintiff Theresa T. Malone filed a response (ECF No. 7), to
which State Farm replied (ECF No. 8).
a breach of contract action arising from an automobile
accident that occurred on August 15, 2013. Malone alleges
that while she was in her parked vehicle in a parking lot in
Las Vegas, Nevada, a car backed into her and caused her
medical and incidental damages. She claims that at the time
of the accident, she maintained an underinsured motorist
coverage policy (number 088-0200F23-28) with State Farm.
9, 2015, Malone filed a negligence suit in state court
against John Mooney, the purported tortfeaser who was
operating the vehicle that allegedly caused the August 15,
2013 accident. (ECF No. 5-2). In December 2016, State Farm
intervened in that litigation. (ECF No. 5-3). Malone now
claims that she cannot recover the full amount of damages
arising from the accident from her state-court suit against
Malone filed the present action against her underinsured
motorist policy carrier, State Farm, in state court on May 2,
2017, alleging three causes of action: (1) breach of
contract; (2) violation of the Unfair Claims Practices Act;
and (3) breach of the covenant of good faith and fair
dealing/bad faith, all related to State Farm's alleged
failure to compensate Malone under the policy. (ECF No. 1 at
Farm removed the action to federal court on June 5, 2017.
(ECF No. 1).
Farm now moves to dismiss the action pursuant to Federal Rule
of Civil Procedure 12(b)(6), or, in the alternative, to stay
proceedings, on grounds that dismissal or a stay is warranted
under Colorado River Water Conservation Dist. v. United
States, 424 U.S. 800 (1976), because the parties are
currently involved in parallel proceedings in state
court-namely, the state case between plaintiff Malone and the
alleged tortfeasor, Mooney. (ECF No. 5).
Farm argues that Colorado River Water Conservation Dist.
v. United States, 424 U.S. 800 (1976), warrants
dismissal because the parties are currently involved in
parallel proceedings in state court that will resolve the
issues in the present litigation. (ECF No. 5).
Colorado River, the Supreme Court derived a list of
factors that weigh in favor of dismissing a federal suit
“due to the presence of a concurrent state
proceeding.” Id. Federal courts must consider:
“(1) whether either the state or federal court has
exercised jurisdiction over a res; (2) the
inconvenience of the federal forum; (3) the desirability of
avoiding piecemeal litigation; and (4) the order in which the
forums obtained jurisdiction.” 40235 Washington St.
Corp. v. Lusardi, 976 F.2d 587, 588 (9th Cir. 1992)
(citing Colorado River, 424 U.S. at 818). Further,
federal courts must consider (5) whether state or federal law
controls issues in each of the cases and (6) whether the
state proceeding is adequate to protect the parties'
rights. Moses H. Cone Memorial Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 23, 26 (1983).
the United States Supreme Court has repeatedly emphasized
that dismissal or abstention under the Colorado
River doctrine is reserved “only [for] exceptional
circumstances; only the clearest of justifications will
warrant dismissal.” Id. at 2. “But we
emphasize that our task in cases such as this is not to find
some substantial reason for the exercise of federal
jurisdiction by the district court; rather, the task is to
ascertain whether there exist ‘exceptional'
circumstances, the ‘clearest of justifications, '
that can suffice under Colorado River to justify the
surrender of that jurisdiction.” Id.
at 25-26. The existence of a state court case that asks some
of the same questions as a federal case is not grounds,
without much more, for dismissal or abstention under the
Colorado River doctrine.
litigation in the state court case and in this court are not
substantially similar: in the state court action pending
below, it appears on this record that Malone has not filed a
cause of action against State Farm under the underinsured
motorist policy, while in this action, she has. While several
of the key factual and legal questions in these two cases
will be the same, they are not identical or substantially
similar because a victory for Malone in the state court
action would not result in a monetary judgment against State
Farm, as it would here. Therefore, the state proceeding is
not adequate for the adjudication of ...