757BD LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA

330 F. Supp. 3d 1153
CourtDistrict Court, D. Arizona
DecidedJune 7, 2016
DocketNo. CV-14-01312-PHX-DJH
StatusPublished
Cited by8 cases

This text of 330 F. Supp. 3d 1153 (757BD LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
757BD LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 330 F. Supp. 3d 1153 (D. Ariz. 2016).

Opinion

Honorable Diane J. Humetewa, United States District Judge

After finding that complete diversity of citizenship exists between plaintiff 757BD LLC ("757BD") and defendant National Union Fire Insurance Company of Pittsburgh, PA ("National Union"), the Court allowed 757BD to renew its motion to remand pursuant to 28 U.S.C. § 1447(c) (Doc. 20). 757BD timely did so and this renewed motion is fully briefed. (Docs. 13, 21, 22 and 25). The Court now rules as follows.1

I. Background

A. First Superior Court Action

In 2008, 757BD commenced a lawsuit in the Superior Court for the State of Arizona *1157in Maricopa County ("Superior Court") against Aero Jet Service, LLC ("Aero Jet") and others (the "underlying action"). (Doc. 1-1 at 22 , ¶ 3) The underlying action related to the sale and maintenance of a jet aircraft which 57BD had purchased in January 2005. (Doc. 13 at 1:26). In that underlying action, 757BD alleged numerous causes of action against Aero Jet. See (Doc. 1-1 at 3, ¶ 4). Ultimately, in February 2012, the parties entered into a stipulated judgment on two causes of action. (Id. ). That judgment was in favor of 757BD and against Aero Jet in the amount of $591,496.61, plus interest. (Id. ).

National Union insured Aero Jet under two polices, but for a host of reasons it refused to defend Aero Jet in the underlying action and refused to indemnify it for the judgment therein. (Doc. 1-1 at 3-4, ¶¶ 5-7). These reasons include National Union's determinations that: (1) 757BD's claims did not involve "property damage" within the meaning of the policies; (2) the underlying lawsuit did not allege "an occurrence" or "property damage" during the policy period. (Id. at 3, ¶ 7). 757BD disputed National Union's reasons for denying coverage under the policies and for refusing to defend and indemnify it in the underlying action. (Id. at 3, ¶ 8). Subsequently, Aero Jet assigned to 757BD all of "Aero Jet's rights, claims and causes of action against National Union relating to National Union's failure to defend and indemnify Aero Jet in connection" with the underlying action. (Id. at 4-5, ¶ 9).

B. First Federal Court Action

During the pendency of the underlying action, in 2011, National Union filed an action in this District Court under the Federal Declaratory Judgment Act ("FDJA"), 28 U.S.C. §§ 2201, et seq. National Union sued Aero Jet and 757BD and sought a "declaratory judgment that it had no obligation to defend or indemnify its insured, Aero Jet[,]" in the then pending underlying state court action. Nat'l Union Fire Ins. Co. v. Pittsburgh v. Aero Jet Servs., LLC , 2011 WL 4708857, at *1 (D.Ariz. Oct. 7, 2011) (" Nat'l Union I "). In moving to dismiss, 757BD and Aero Jet argued that the Court "should abstain from exercising its jurisdiction over the FDJA claim because Plaintiff could bring its request for declaratory judgment in state court." ( Id. ) (citation omitted). Agreeing, the Court dismissed on abstention grounds reasoning, inter alia , that National Union "could have filed its action in state court under the Arizona Declaratory Judgment statute, A.R.S. § 12-1831 [ (the "Arizona DJA") ]." Id. at *4.

After prevailing on its motion to dismiss in Nat'l Union I , 757BD sought and was awarded its attorneys' fees relating thereto. Nat'l Union Fire Ins. Co. of Pittsburgh v. Aero Jet Servs., LLC , 2012 WL 510490 (D.Ariz. 2012). National Union unsuccessfully appealed the attorneys' fees award only. Nat'l Union Fire Ins. Co. of Pittsburgh v. 757BD, LLC , 560 Fed.Appx. 657 (9th Cir. 2014). Although National Union could have, as the Court observed in Nat'l Union I , it did not file an action in Superior Court under the Arizona DJA.

C. Second Superior Court Action

On February 19, 2014, while National Union's appeal was pending in the Ninth Circuit, 757BD filed a complaint entitled "Declaratory Judgment" in Superior Court.3 By this time, the underlying action *1158had been resolved through the February 2012 stipulated judgment. The crux of this most recent lawsuit by 757BD is that National Union improperly "refused to defend Aero Jet and has refused to pay the judgment against Aero Jet in connection with the [u]nderlying [l]awsuit[.]" (Doc. 1-1 at 3, ¶ 7). 757BD alleges that it is "entitled to have determined the construction of [National Union's] Policies" and "to obtain a declaration of its rights, status and legal obligations thereunder pursuant to" the Arizona DJA. (Id. at 5, ¶ 11).

In its prayer for relief, 757BD seeks three closely related declarations. First, it seeks a declaration that National Union's policies required it to defend Aero Jet in the underlying action. Second, 757BD seeks a declaration that National Union's policies required it to indemnify Aero Jet for the judgment entered against Aero Jet in the underlying action. Third, 757BD seeks a declaration that "National Union must pay the judgment entered in favor of 757BD and against Aero Jet in the underlying" action. (Id. at 5, ¶ 3). In addition to this purported declaratory relief, 757BD is seeking its reasonable attorneys' fees and costs and "such other and further relief including a monetary judgment as the Court deems just and proper pursuant to A.R.S. § 12-1838 or principles of law or equity." (Id. at 5, ¶ 6).

D. Second Federal Court Action

In accordance with 28 U.S.C. §§ 1441 and 1446, National Union timely removed that second Superior Court action to this Court purportedly on the basis of diversity jurisdiction, 28 U.S.C. § 1332.

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Bluebook (online)
330 F. Supp. 3d 1153, Counsel Stack Legal Research, https://law.counselstack.com/opinion/757bd-llc-v-natl-union-fire-ins-co-of-pittsburgh-pa-azd-2016.