Globe Indemnity Co. v. Wrenn Insurance Agency

816 F. Supp. 1379, 1993 U.S. Dist. LEXIS 3718, 1993 WL 85442
CourtDistrict Court, W.D. Missouri
DecidedMarch 23, 1993
DocketNo. 92-1172-CV-W-3
StatusPublished
Cited by2 cases

This text of 816 F. Supp. 1379 (Globe Indemnity Co. v. Wrenn Insurance Agency) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Globe Indemnity Co. v. Wrenn Insurance Agency, 816 F. Supp. 1379, 1993 U.S. Dist. LEXIS 3718, 1993 WL 85442 (W.D. Mo. 1993).

Opinion

ORDER

ELMO B. HUNTER, Senior District Judge.

Defendant Oak Park Bank (Oak Park) has filed a motion to dismiss it from this proceeding, or, alternatively, to stay the claims asserted against it in Plaintiff Globe Indemnity Company’s (Globe) Complaint. In an analogous motion, Oak Park moves this Court to dismiss or stay the crossclaim asserted against it by Defendants Wrenn Insurance Agency, Inc. (Wrenn Insurance), and R. Michael Wrenn. Oak Park argues that this Court should dismiss or stay the above-described claims, under the Colorado River abstention doctrine,1 because of duplicative claims pending in the Kansas State Court.

BACKGROUND

This suit involves several different parties and includes, among other things, competing claims on various sums of money. With regard to this motion, at issue are: (1) a Money Market Account from which Oak Park removed approximately (setoff) $746,000.00; (2) a Checking Account from which Oak Park removed approximately $226,000.00 to pay on various notes; (3) a Payroll Account from which Oak Park removed approximately $5,000.00 to pay on a note; money was also transferred from this account to the checking account; and (4) Certificates of Deposit from which Oak Park took approximately $368,-000.00 to pay on notes.

This case derives from an earlier bankruptcy action. Below is a summary chronology of related actions:

1. February 26, 1992, Wrenn Insurance Agency of Missouri, Inc. (Wrenn Missouri), filed in the United States Bankruptcy Court for the Western District of Missouri for Chapter 11 protection;

2. June 1, 1992, Globe filed an adversary proceeding in the bankruptcy court against the same defendants joined in [1381]*1381this action and raising essentially the same claims;

3. July of 1992, Oak Park filed a motion for dismissal of Globe’s claims against it in the adversary proceeding;

4. August 12, 1992, Wrenn Insurance, the Wrenn Venture Company, R. Michael Wrenn and Norma Wrenn filed an action in Kansas State Court against Oak Park challenging, among other things, actions taken by Oak Park against the various accounts and funds described above;

5. September 28, 1992, the Bankruptcy Judge, the Hon. Frank W. Koger granted Oak Park’s motion for dismissal in the bankruptcy court;

6. September 29, 1992, Oak Park filed a declaratory judgment action in Kansas State Court to establish the parties’ respective rights to the various accounts and funds at issue in the adversary proceeding and the other Kansas State Court case.

7. October 21, 1992, Judge Koger transferred the adversary proceeding to this Court due to the jury demand, which had been made by Globe and Wrenn Missouri.

8. November 18, 1992, this Court held a scheduling conference, during which the Court and the parties discussed, among other things, the most efficient manner for proceeding in this case.

9. December 7, 1992, Judge Koger entered an Order lifting the Stay to allow Globe to name Wrenn Missouri as a defendant in a federal diversity action, per discussions held at the November 18th conference.

10. December 23, 1992, this case was filed and the parties also filed a joint stipulation and motion for dismissal in the adversary proceeding.

I.

Oak Park urges that, because of the parallel actions proceeding in the Kansas State Court, this Court should either dismiss or stay the claims pending in this action against Oak Park. Oak Park asserts that dismissal or stay is called for under the Colorado River abstention doctrine, stating that the general principle underlying Colorado River abstention is avoidance of duplicative litigation.

To be sure, parallel litigation involving the same parties and the same issues and proceeding simultaneously in federal and state courts adds greatly to litigation expense and inefficiency. Such duplicative costs are wasteful and should be avoided in appropriate cases.

This Court, however, believes that Oak Park would have the Colorado River abstention doctrine applied too broadly. The Court reads Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) and its progeny to instruct that such abstention is to be applied only in limited and exceptional circumstances. See also Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); see also ERWIN CHEMERINSKY, FEDERAL JURISDICTION § 14.2 at 662-63 (1989).

It is well settled that the fact that a case is proceeding in one court does not necessarily defeat jurisdiction of a parallel case in another court. See, e.g., McClellan v. Carland, 217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762 (1910); Stanton v. Embrey, 93 U.S. (3 Otto) 548, 554, 23 L.Ed. 983 (1877). In Colorado River, the Supreme Court held that abstention, in deference to a pending state court action, is appropriate, not as a general rule, but only in suits involving truly exceptional circumstances. 424 U.S. at 818, 96 S.Ct. at 1246. Moreover, the Supreme Court stressed that federal courts have a “virtually unflagging obligation” to exercise the jurisdiction given them and, as a general rule, should not abstain merely on the basis of parallel state proceedings. Id. at 817, 96 S.Ct. at 1246.

Colorado River and its progeny have established several factors for district courts to apply in determining whether or not abstention is appropriate. The factors to be considered by the district court are: (1) the problems that occur when a state and federal court assume jurisdiction over the same res; (2) the relative inconvenience of the federal forum; (3) the desirability to avoid piecemeal [1382]*1382litigation; (4) the order in which the courts obtained jurisdiction;2 (5) whether state or federal law controls; and (6) the adequacy of the state forum to protect the parties’ rights.3 Insurance Company of Pennsylvania v. Syntex Corp., 964 F.2d 829, 834 (8th Cir.1992) (citing Colorado River Water Conservation Dist v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976); Moses H. Cone Memorial Hosp. v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

These factors are not a “mechanical checklist” but require careful balancing. Moses H. Cone Hospital, 460 U.S. at 16, 103 S.Ct. at 937. “No one factor is necessarily determinative.” Colorado River, 424 U.S. at 818-19, 96 S.Ct. at 1247. Once undertaken, this balancing is “heavily weighted in favor of the exercise of jurisdiction,” Moses H. Cone Hospital, 460 U.S. at 16, 103 S.Ct. at 937, and “[o]nly the clearest of justifications will warrant dismissal.” Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247.

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Bluebook (online)
816 F. Supp. 1379, 1993 U.S. Dist. LEXIS 3718, 1993 WL 85442, Counsel Stack Legal Research, https://law.counselstack.com/opinion/globe-indemnity-co-v-wrenn-insurance-agency-mowd-1993.