Creasman v. Farmers Casualty Insurance Company ( 2022 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Charles Creasman, No. CV-22-01820-PHX-DJH 10 Plaintiff, ORDER 11 v. 12 Farmers Casualty Insurance Company, 13 Defendant. 14 15 This case concerns Plaintiff’s class action efforts1 to enforce the Uninsured and 16 Underinsured Motorist Coverage policies (the “Policies”) issued to him by Defendant. 17 (Doc. 1-3 at 5). After removing this action to federal court, Defendant filed an Expedited 18 Motion to Stay Proceedings (Doc. 16) pending a decision from the Arizona Supreme Court2 19 on two certified questions that are related to Plaintiff’s breach of insurance contract and 20 bad faith claims under A.R.S. § 20-259.01. (Doc. 16 at 3). See Franklin v. CSAA General 21 Insurance Company, No. 2:22-cv-00540-JJT (D. Ariz. Nov. 2, 2022), at Doc. 47. On 22 December 21, 2022, the Court found good cause to vacate and postpone the Scheduling 23 Conference in this matter until the Court could rule on the merits of the Motion, which is 24 1 Plaintiff filed a First Amended Class Action Complaint in Arizona Superior Court 25 claiming Defendant breached its insurance contract and acted in bad faith when it failed to “stack” Plaintiffs benefits under the policies. (Doc. 1-3 at 4–25); see also Charles 26 Creasman v. Farmers Casualty Insurance Company f/k/a Metropolitan Casualty Insurance Company, No. CV2022-012824 (Ariz. Super. Ct. Sept. 28, 2022). The action was 27 subsequently removed to this Court. (Doc. 1). 28 2 See Franklin v. CSAA General Insurance Company, CV-22-0266-CQ (Ariz.). 1 fully briefed.3 (Doc. 26). 2 “[T]he power to stay proceedings is incidental to the power inherent in every court 3 to control the disposition of the cases on its docket with economy of time and effort for 4 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 428, 254 (1936). Courts 5 must weigh the following “competing interests” to determine whether to issue a Landis 6 stay: “[1] the possible damage which may result from the granting of a stay, [2] the 7 hardship or inequity which a party may suffer in being required to go forward, and [3] the 8 orderly course of justice measured in terms of the simplifying or complicating of issues, 9 proof, and question of law which could be expected to result from a stay.” Lockyer v. 10 Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 11 265, 268 (9th Cir. 1962). “If there is even a fair possibility that the stay will work damage 12 to someone else, the party seeking the stay” faces a heightened burden and “must make out 13 a clear case of hardship or inequity.” Percy v. United States, 2016 WL 7187129, *2 (D. 14 Ariz. 2016) (quoting Lockyer, 398 F.3d 1109). It is proper to stay proceedings in a case 15 “pending the outcome of the ‘lead’ case even where the ‘lead’ case may not be potentially 16 dispositive of the case sought to be stayed” and “even where the ‘lead’ case may, at most, 17 streamline the issues in the case sought to be stayed.” Equal Emp. Opportunity Comm’n v. 18 Bashas’, Inc., 2012 WL 13104758, at *1 (D. Ariz. Apr. 6, 2012) (recognizing concurrent 19 litigation as a lead case that would “be extremely important to the legal issues before [the] 20 Court”). 21 The three competing interests set forth in Lockyer weigh in favor of staying the 22 present proceedings. First, Plaintiff’s argument that a stay would cause irreparable harm to 23 Defendant’s insureds is moot. (Doc. 18 at 5). This concern was resolved when the parties 24 withdrew Plaintiff’s Motion for Preliminary Injunction (Doc. 19) by stipulation. (Doc. 23). 25 Defendant agreed it “will not request or enter into a release with an insured on any claim 26 against a Farmers auto policy issued in Arizona for which [Defendant] has paid the per 27 person limits for underinsured or uninsured motorist coverage” while this lawsuit is 28 3 Plaintiff filed a Response (Doc. 18), and Defendant filed a Reply (Doc. 22). 1 pending. (Id. at 2). Second, absent a stay, the parties would largely proceed to “needlessly 2 devote resources to litigating issues that will be directly impacted by the Arizona Supreme 3 Court’s response to the certified questions.” (Doc. 22 at 5). This district has recognized 4 such evidence of hardship in the class action setting and found it weighs in favor of a stay. 5 See Winters v. Loan Depot LLC, 2020 WL 8254053, at *1–2 (D. Ariz. Oct. 29, 2020) 6 (“Denying the stay would subject Defendant to costs related to class certification briefing, 7 completing expert discovery, briefing dispositive motions, and potentially preparing for 8 trial, all while the [Arizona] Supreme Court considers an issue that could significantly 9 narrow the case.”). The Court finds merit, however, in Plaintiff’s position that resolution 10 of Defendant’s pending Motion to Dismiss does not turn on the Arizona Supreme Court’s 11 resolution of the stacking issue under A.R.S. § 20-259.01.4 (Doc. 18 at 6, 9). Nor is it clear 12 to the Court that resolution of the stacking issues will dispose of the entire case. 13 Finally, a stay would promote the orderly course of justice. Certain claims in 14 Plaintiff’s First Amended Class Action Complaint rely on the implications of A.R.S. § 20- 15 259.01. Thus, it is in the interest of judicial economy to wait until the Arizona Supreme 16 Court clarifies this area of the law as it would avoid the use of resources on discovery and 17 potentially fruitless motions. See Berrow v. Navient Sols. LLC, 2020 WL 8267706, at *2– 18 3 (D. Ariz. Dec. 17, 2020). Plaintiff argues that the fact the Arizona Supreme Court has not 19 yet accepted jurisdiction over the certified questions gives “no reason to stay this case.” 20 (Doc. 18 at 7). The Court disagrees. Instead, “the same rationale for staying a case while 21 waiting for the Arizona Supreme Court’s ultimate decision on a certified question applies 22 to the preliminary decision whether to accept the certified question.” Bode v. Travelers, 23 No. CV-22-01847-PHX-DWL (D. Ariz. Dec. 16, 2022), at Doc. 17 (citing Affiliated FM 24 Ins. Co. v. LTK Consulting Servs. Inc., 556 F.3d 920, 923 (9th Cir. 2009)). 25 Here, Franklin constitutes a “lead” case for numerous cases in the District of 26 4 In its Motion to Dismiss, Defendant argues this case should be dismissed because (1) Plaintiff’s breach of contract claim is barred by the applicable statute of limitations, which 27 would require dismissal of the declaratory judgment claim; and (2) Plaintiff’s First Amended Class Action Complaint fails to state sufficient facts to support a bad faith claim. 28 (Doc. 10 at 2). || Arizona raising similar issues under A.R.S. § 20-259.01. See Equal Emp. Opportunity 2\| Comm'n, 2012 WL 13104758, at *1. As noted in the parties’ Joint Case Management || Report, many of these cases have been stayed pending the resolution of the certification request in Franklin. (Doc. 25 at 5-8). Thus, Court will stay proceedings in the present 5 || matter because it relates to the certified questions and resolution of these questions could 6|| similarly narrow the issues raised in Plaintiff's First Amended Class Action Complaint. 7 However, because the Court agrees with Plaintiff that resolution of Defendant’s 8 || pending Motion to Dismiss does not turn on the Arizona Supreme Court’s resolution of the 9|| stacking issue under A.R.S. § 20-259.01. the Court will rule on the Motion in due course. 10 Accordingly, 11 IT IS ORDERED that Defendant’s Expedited Motion to Stay Proceedings || (Doc. 16) is GRANTED in part. This matter is stayed as it relates to the Arizona Supreme 13 || Court’s ultimate disposition on the district court’s request to accept and decide the certified || questions proposed in Franklin vy. CSAA General Insurance Company, No. 2:22-cv-00540- □□ JJT (D. Ariz. Nov. 2, 2022). The Court will rule on Defendant’s Motion to Dismiss (Doc. 16|| 10), however, in due course. 17 IT IS FURTHER ORDERED the parties must file a joint notice of decision within || five (5) days of the Arizona Supreme Court’s decision. 19 Dated this 23rd day of December, 2022. 20 21 Lf As 22 norable' Diang4. Huretewa 3 United States District Fudge 24 25 > See Franklin v. CSAA Gen. Ins. Co., No. CV-22-00540-PHX-JJT (D. Ariz.); see also 26 Doyle v. Pekin Ins. Co., No. CV-22-00638-PHX-JJT (D. Ariz.) see also Miller v. Trumbull Ins. Co., No. CV-22-01545-PHX-JJT (D. Ariz.); see also Dale v. Travelers Prop. Cas. Ins. 27 Co., No. 2:22-CV-1659-PHX-JZB (D. Ariz.); Bode v. Travelers Prop. Casualty Ins. Co., No. 2:22-CV-01847-PHX-DWL (D. Ariz.); see also Muehlhausen, et al. v. Allstate Fire & Cas. Ins. Co., No. 2:22-cv-01747-PHX-JAT (D. Ariz.). -4-