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Allied World Surplus Lines Insurance Co. v. Hawaii Medical Service Association

United States District Court, D. Hawaii

September 27, 2017

ALLIED WORLD SURPLUS LINES INSURANCE COMPANY F/K/A DARWIN SELECT INSURANCE COMPANY and ALLIED WORLD SPECIALTY INSURANCE COMPANY F/K/A/ DARWIN NATIONAL ASSURANCE COMPANY, Plaintiffs,
v.
HAWAII MEDICAL SERVICE ASSOCIATION D/B/A BLUE CROSS AND BLUE SHIELD OF HAWAII Defendant.

          ORDER GRANTING DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT (ECF NO. 32)

          HELEN GILLMOR UNITED STATES DISTRICT JUDGE

         Plaintiffs Allied World Surplus Lines Insurance Company and Allied World Specialty Insurance Company filed a Complaint seeking a declaratory judgment in a coverage dispute against Defendant Hawaii Medical Service Association.

         The Complaint seeks a declaration that neither of the two insurance policies issued by the Plaintiffs to the Defendant cover the defense of the multidistrict litigation cases currently pending in the United States District Court for the Northern District of Alabama. Plaintiffs are not parties to the multidistrict litigation.

         Defendant Hawaii Medical Service Association filed a Motion to Dismiss for lack of subject-matter jurisdiction and failure to state a claim. Defendant argues in the alternative that Plaintiffs' request is premature and should be dismissed, or stayed, pursuant to the Court's discretion over declaratory judgment actions. Defendant's Motion to Dismiss (ECF No. 32) is GRANTED. Plaintiffs have failed to establish subject-matter jurisdiction.

         PROCEDURAL HISTORY

         On April 5, 2017, Plaintiffs filed a COMPLAINT. (ECF No. 1).

         On May 22, 2017, Defendant filed DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S MOTION TO DISMISS COMPLAINT FOR DECLARATORY JUDGMENT FILED ON APRIL 5, 2017. (ECF No. 27).

         On June 5, 2017, Plaintiffs filed a FIRST AMENDED COMPLAINT. (ECF No. 30).

         On June 7, 2017, the Court filed STIPULATION REGARDING HEARING ON DEFENDANT'S MOTION TO DISMISS THE COMPLAINT FOR DECLARATORY JUDGMENT AND ORDER. (ECF No. 31). Pursuant to the Stipulation, Defendants withdrew their Motion to Dismiss the Complaint for Declaratory Judgment without prejudice.

         On June 21, 2017, Defendant filed DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT FILED ON June 21, 2017. (ECF No. 32).

         On July 5, 2017, Plaintiffs filed PLAINTIFFS' MEMORANDUM IN OPPOSITION TO HAWAII MEDICAL SERVICE ASSOCIATION'S MOTION TO DISMISS FOR FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT FILED JUNE 21, 2017. (ECF No. 35).

         On July 19, 2017, Defendant filed DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF [32] DEFENDANT'S MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT. (ECF No. 37).

         On July 20, 2017, Defendant filed NOTICE OF ERRATA TO HMSA'S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT FILED ON JUNE 5, 2017. (ECF No. 38).

         On August 4, 2017, Defendant filed NOTICE OF UNCITED AUTHORITIES IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR DECLARATORY RELIEF. (ECF No. 39).

         On August 16, 2017, Plaintiffs filed PLAINTIFF'S OBJECTION TO DEFENDANT'S NOTICE OF UNCITED AUTHORITIES IN SUPPORT OF ITS MOTION TO DISMISS. (ECF No. 40).

         On August 22, 2017, Defendant filed DEFENDANT HAWAII MEDICAL SERVICE ASSOCIATION'S RESPONSE TO PLAINTIFF'S OBJECTION TO NOTICE OF UNCITED AUTHORITIES IN SUPPORT OF THE MOTION TO DISMISS. (ECF No. 41).

         On September 19, 2017, the Court held a hearing on Defendant's motion to dismiss. The Court rendered a ruling granting Defendant's Motion to Dismiss and Dismissing without Prejudice Plaintiffs' Fist Amended Complaint. (ECF No. 48). The Court stated a written order would be filed at a later date. (Id.) This written order sets forth the Court's basis for the grant of Defendant's Motion to Dismiss.

         BACKGROUND

         Plaintiffs Allied World Surplus Lines Insurance Company and and Allied World Specialty Insurance Company (collectively hereafter “Allied World”) issued the two insurance policies that are the subject of this action to the Hawaii Medical Service Association (hereafter ...


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