Donna Taylor v. Hawley Troxell Ennis & Hawley

FILED
NOT FOR PUBLICATION DEC 30 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DONNA J. TAYLOR, a shareholder who No. 13-36043
is bringing this action on behalf of and/or
in the right of AIA Services Corporation D.C. No. 1:10-cv-00404-LMB
and its wholly owned subsidiary AIA
Insurance, Inc.,
MEMORANDUM*
Plaintiff - Appellant,
v.
HAWLEY TROXELL ENNIS &
HAWLEY, LLP, an Idaho limited liability
partnership; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Idaho
Larry M. Boyle, Magistrate Judge, Presiding
Argued and Submitted December 7, 2015
Seattle, Washington
Before: HAWKINS and McKEOWN, Circuit Judges and GLEASON,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Sharon L. Gleason, District Judge for the U.S. District Court
for the District of Alaska, sitting by designation.
Donna Taylor appeals the denial of a motion to lift a Colorado River stay in this
derivative suit against AIA Services Corporation (“AIA Services”), its subsidiaries,
certain of its board members, AIA Services’ law firm Hawley Troxell Ennis &
Hawley, LLP (“Hawley Troxell”), and certain Hawley Troxell attorneys including
Richard Riley, arising from alleged corporate malfeasance and attorney malpractice.
See Colorado River Water Dist. v. United States, 424 U.S. 800 (1976). In light of
changed circumstances, we have jurisdiction, and we reverse.1 The Colorado River
doctrine stay orders are appealable under the collateral order exception to the general
rule limiting appellate jurisdiction to orders issuing final judgments. Gulfstream
Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276 (1988); Nakash v.
Marciano, 882 F.2d 1411, 1413 (9th Cir. 1989). The order at issue here, entered in
May 2013, stayed this case pending the outcome of an Idaho state court case, Reed
Taylor v. Riley, et al. (“Riley”),2 and is appropriate for our review because
circumstances have changed and that appeal has been resolved.
1
Donna Taylor also appeals a subsequent order denying her motion for
reconsideration or, in the alternative, for bifurcation of her claims. We do not have
jurisdiction to review such an interlocutory, non-final order.
2
A Colorado River stay was initially entered in this case in 2011, pending the
outcome of several state court cases. The 2013 order considered here was prompted
by a motion by Donna Taylor to have the 2011 stay lifted. The 2011 order was not
challenged or appealed.
2
Riley was filed in 2009 by AIA Services’ former CEO, Reed Taylor, against
attorneys who advised him in 1995 to enter a deal transferring his majority stake in
AIA Services to a group of the company’s directors, after the Idaho Supreme Court
found the deal unenforceable. Taylor v. AIA Services Corp., 261 P.3d 829 (Idaho
2011). These attorneys included Richard Riley and his then-employer, the law firm
of Eberle Berlin. While the complaint also named Hawley Troxell—Richard Riley’s
subsequent employer, current counsel to AIA Services, and a party here—the Riley
court in 2010 dismissed Hawley Troxell from the action with prejudice. At the time
of the order before us, Riley was on a permissive, interlocutory appeal before the
Idaho Supreme Court challenging the lower court’s ruling that Riley and Eberle Berlin
owed a duty of care to Reed Taylor.3
Thus (irrespective of whether we should still consider Hawley Troxell a party
to this action), at the relevant moment, Riley and the present suit shared only Riley as
a common party. Further, Donna Taylor’s claims here revolve around post-1995
malfeasance by certain AIA Services directors since they took over Reed Taylor’s
3
The parties’ reports on the status of all litigation arising from facts related to
the present case suggest that sometime after the order on appeal here was issued, Reed
Taylor appealed the Idaho state court’s previous dismissal of certain causes of action
against Hawley Troxell, and that a decision is pending. Hawley Troxell’s dismissal
from Riley was not subject to any challenge at the time the order on appeal here was
filed, however.
3
majority stake. Riley, by contrast, concerns misconduct relating only to the 1995 deal
and its lack of enforceability; and a judgment in Reed Taylor’s favor would
compensate only him.
Because of the present status of the Riley litigation and the fact that no
exceptional circumstances warrant a stay, the “balance heavily weigh[s] in favor of
the exercise of jurisdiction,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 16 (1983). We conclude that the district court erred in denying the motion
to lift the stay.
REVERSED AND REMANDED. EACH PARTY SHALL BEAR ITS
OWN COSTS ON APPEAL.
4