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Greenspon v. Aig Specialty Insurance Co.

United States District Court, D. Hawaii

May 13, 2019

MICHAEL C. GREENSPON, Plaintiff,
v.
AIG SPECIALTY INSURANCE CO F/K/A CHARTIS SPECIALTY INSURANCE CO.; AMERICAN INTERNATIONAL GROUP, INC.; PROMMIS SOLUTIONS HOLDING CORP. N/K/A OLD ALABAMA CLOSING COPR.; MCCORRISTON MILLER MUKAI MACKINNON LLP; and DOES 10-30, Defendants.

          ORDER DENYING MOTION TO 1) RECONSIDER MOTION TO REMAND OR 2) STAY PROCEEDINGS PENDING STATE COURT ACTION

          DERRICK K. WATSON UNITED STATES DISTRICT JUDGE.

         Before the Court is pro se Plaintiff Michael Greenspon's motion for reconsideration of the denial of remand or to stay proceedings. Dkt. No. 38. The Court finds these matters suitable for disposition without a hearing, pursuant to Local Rule 7.2(d). For the reasons discussed below, Greenspon's alternative requests are DENIED.

         PROCEDURAL BACKGROUND

         Greenspon's Complaint, originally filed in state court, seeks a declaratory judgment regarding AIG's and AIG Specialty's insurance coverage obligations with respect to a default judgment entered in Greenspon's favor in a 2014 state-court lawsuit (2014 Lawsuit) against AIG's insured, Prommis Solutions Holding Corp (PSHC), and Prommis' wholly owned subsidiary, Cal Western. Id., Ex. 1.

         In November 2018, Defendants American International Group (AIG), AIG Specialty, and McCorriston, Miller, Mukai, MacKinnon LLP (M4) removed this action to this Court. Dkt. No. 1. Greenspon filed a Motion to Remand based on: (1) lack of jurisdiction because of the incomplete diversity of the parties and (2) discretionary considerations, including the existence of duplicative, intertwined state-court matters. Dkt. No. 10. On February 25, 2019, this Court denied Greenspon's Motion for Remand (February 2019 Order), concluding, inter alia, that (1) Greenspon had not asserted a claim against the sole in-state party, M4, rendering the law firm's presence as a defendant improper and resulting in its exclusion when determining diversity; and (2) Greenspon's pending state-court matters against defendants other than those named here did not relate directly to the declaratory judgment action before this Court, and the only possibly related state-court matter, the 2014 Lawsuit, was no longer pending, having concluded with the entry of default judgment. Dkt. No. 22.

         On March 13, 2019, Greenspon moved in state court to amend the findings of facts and conclusions of law in the previously-concluded 2014 Lawsuit. Defendant's Opposition to Motion to Remand (Opp.), Dkt. No. 45, at 4. The state court promptly denied the motion to amend. Id. at 5. On March 25, 2019, Defendant AIG, who was not party to the 2014 Lawsuit, initiated a Special Proceeding (2019 Special Proceeding) in state court to set aside the default judgment in the 2014 Lawsuit as it relates to Cal-Western. Id. Greenspon thereafter counterclaimed against AIG in the 2019 Special Proceeding asserting some claims similar to those in the declaratory judgment action before this Court. Id. at 6. The state court consolidated the 2014 lawsuit with the 2019 Special Proceeding (Consolidated State Court Proceeding). Id. at 7.

         Pending in the Consolidated State Court Proceeding are Greenspon's motion for summary judgment as to AIG's complaint seeking to set aside the default judgement against Cal Western and AIG's Motion to Dismiss Greenspon's counterclaims. Id. On April 18, 2019, Greenspon filed the instant “Motion to 1) Reconsider Motion to Remand or 2) to Stay Proceedings Pending State Court Action” (Motion). Dkt. No. 38.

         LEGAL STANDARD

         Motion for Reconsideration

         Pursuant to LR60.1, motions seeking reconsideration of interlocutory orders may only be brought on the basis of newly discovered material facts not previously available, an intervening change in law, or manifest error of law or fact. Where reconsideration is sought based on manifest error, the motion must be brought within 14 days of the order it challenges. Id.

         Motion for Stay

         “[T]he power to stay proceedings is incidental to the power inherent in every court to control disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). “The exertion of this power calls for the exercise of sound discretion.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962); see Clinton v. Jones, 520 U.S. 681, 706 (1997) (“The District Court has broad discretion to stay proceedings as an incident to its power to control its own docket.”); Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) (“A district court has discretionary power to stay proceedings in its own court[.]”). When a stay is requested because of pending proceedings that bear on the case, the Court may grant a stay in the interests of the efficiency of its own docket and fairness to the parties. See Leyva v. Certified Grocers of Cal. Ltd., 593 F.2d 857, 863 (9th Cir. 1979); see also Mediterranean Enters., Inc. v. Sangyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (“A trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case.”).

         The Ninth Circuit has set out the following framework for analyzing motions to stay, pending resolution of related matters:

Where it is proposed that a pending proceeding be stayed, the competing interests which will be affected by the granting or refusal to grant a stay must be weighed. Among those competing interests are the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the ...

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