Protective Life Insurance Company v. Kallel

• Court: District Court, S.D. California
• Decided: January 18, 2024
• Docket: 3:22-cv-01554
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PROTECTIVE LIFE INSURANCE Case No.: 22cv1554-LL-BGS COMPANY, 12 ORDER GRANTING IN PART AND Plaintiff, 13 DENYING IN PART DEFENDANT v. NAZEERA KALLEL’S MOTION TO 14 DISMISS, OR IN THE NAZEERA KALLEL, et al., 15 ALTERNATIVE, STAY THE Defendants. ACTION 16

17 [ECF No. 17]

18 Before the Court is Defendant Nazeera Kallel’s Motion to Dismiss, or in the 19 Alternative, Stay the Action (“Motion”). ECF No. 17. The Court deems this Motion 20 suitable for determination on the papers submitted and without oral argument. See S.D. 21 Cal. CivLR 7.1(d)(1). For the reasons stated below, the Court GRANTS IN PART and 22 DENIES IN PART Defendant Nazeera Kallel’s Motion. 23 I. BACKGROUND 24 A. Factual Background 25 On or around November 19, 2003, Plaintiff Protective Life (“Plaintiff” or 26 “Protective Life”) issued a life insurance policy, Policy Number PL0802792 (the “Policy”), 27 to Edward Adam Kallel (the “Insured”) in the amount of $1,500,000.00. ECF No. 1, 28 1 Complaint-in-Interpleader (“Compl.”) ¶ 8. The Policy stated that “[a] beneficiary is any 2 person named by the Owner in the Company’s records to receive the insurance proceeds 3 after the Insured dies.” Id. ¶ 9. Nazeera Kallel (“Nazeera”), the Insured’s wife at the time, 4 was designated as the Policy’s primary beneficiary. Id. ¶ 8. 5 On December 30, 2015, a divorce judgment for the dissolution of the Insured and 6 Nazeera’s marriage was entered in a family law proceeding. Id. at 35–36. The Insured and 7 Nazeera executed a marital settlement agreement (“Agreement”) in which the parties 8 agreed that “[e]xcept as provided to the contrary in this Agreement, each party shall 9 become the owner of any policy of life insurance insuring his or her respective life and 10 shall be entitled to any benefits accruing from that ownership, including without limitation 11 the expectancy interest in the insurance proceeds and the right to name the beneficiary of 12 his or her choice.” Id. at 43–44. 13 On or around March 6, 2019, a beneficiary change was made on the Insured’s online 14 account, which designated Monique Paulene Terrazas (“Terrazas”) as the Policy’s primary 15 beneficiary. Id. ¶ 10. On or around November 11, 2019, another beneficiary change was 16 made on the Insured’s online account, which designated “E. Adam Kallel, Trustee of the 17 E. Adam Kallel Trust dated November 6, 2016” as the Policy’s primary beneficiary. Id. ¶ 18 11. Terrazas died on June 21, 2020, and the Insured died on March 31, 2022. Id. ¶¶ 12–13. 19 On or around June 16, 2022, Protective Life received written correspondence from 20 attorney J. Brian Watkins (“Watkins”), Successor Trustee to the E. Adam Kallel Trust 21 Dated November 6, 2019, asserting a claim to the Policy proceeds on behalf of the Trust. 22 Id. ¶ 14. Further, on or around June 22, 2022, Watkins submitted updated claim forms to 23 Protective Life on behalf of the Trust seeking payment of the Policy proceeds and implying 24 that the Trust was the intended policy beneficiary. Id. ¶ 16. However, Protective Life 25 alleges that there was a discrepancy between the Trust date included in the November 11, 26 2019 beneficiary change (which named “E. Adam Kallel, Trustee of the E. Adam Kallel 27 Trust dated November 6, 2016” as the Policy’s primary beneficiary) and the Trust 28 documents provided by Watkins to Protective Life referencing the “E. Adam Kallel Trust 1 dated November 6, 2019” as the Policy’s primary beneficiary. Id. (emphasis in original). 2 Additionally, on or around August 23, 2022, Protective Life received written 3 correspondence from attorney Christy Lewis-Traut, asserting a claim to the Policy 4 proceeds on behalf of Nazeera. Id. ¶ 17. 5 B. Procedural Background 6 1. Interpleader Action 7 This case is an interpleader action. On October 11, 2022, Plaintiff filed its 8 Complaint-in-Interpleader to determine who is entitled to Edward Adam Kallel’s life 9 insurance policy proceeds. See id. ¶ 18. The Complaint-in-Interpleader named the 10 following defendants: Nazeera Kallel; the E. Adam Kallel Trust, through its Successor 11 Trustee, J. Brian Watkins (the “Trust”); and the Estate of Edward Adam Kallel, through its 12 Executor, J. Brian Watkins (the “Estate”). Id. at ¶¶ 2–4. Plaintiff asked the Court to 13 determine who the Policy proceeds are owed and payable to between the three following 14 scenarios: (1) whether Nazeera Kallel is entitled to the Policy proceeds; (2) whether the 15 “E. Adam Kallel Trust dated November 6, 2019” is the Policy beneficiary, despite the 16 beneficiary of record being the “E. Adam Kallel Trust dated November 6, 2016”; or (3) 17 whether, to the extent the November 11, 2019 beneficiary change is invalid, Monique 18 Pauline Terrazas is the Policy beneficiary. Id. ¶ 18. 19 Plaintiff did not claim any beneficial interest in the Policy’s proceeds and was 20 “instead a mere stakeholder” of the Policy proceeds. Id. ¶ 21. Further, on February 16, 21 2023, Plaintiff was ordered to deposit the sum of $1,538,589.04, representing the Policy’s 22 principal amount, plus interest, into the Registry of the Court. ECF No. 16. 23 On March 2, 2023, Defendant Nazeera filed a Motion to Dismiss for Lack of 24 Jurisdiction or in the Alternative, Stay. ECF No. 17; ECF No 17-1, Motion to Dismiss, or 25 in the Alternative, Stay the Action (“Motion” or “Mot.”). On March 23, 2023, Defendants 26 the Trust and the Estate filed an opposition to the Motion. ECF No. 18, Opposition 27 (“Oppo.”). On the same day, the Trust and the Estate filed a Request for Judicial Notice of 28 State Court Judgment, which requested the Court to take judicial notice of the certified 1 copy of the judgment of the San Diego County Superior Court that was attached to the 2 Complaint-in-Interpleader.1 ECF No. 19. The Trust and the Estate also filed an Objection 3 to Exhibit “A” to the Declaration of Daniel R. Gold.2 ECF No. 20. On March 30, 2023, 4 Defendant Nazeera filed a Reply to the Motion. ECF No. 21, Reply. 5 2. State Court Actions 6 Nazeera brought two lawsuits in state court after this case was filed. First, on January 7 9, 2023, Nazeera filed a Request for Order to Adjudicate Omitted Asset, or Alternatively, 8 Set Aside Portions of the Prior Divorce Judgment (“RFO”) in the martial dissolution 9 proceeding previously filed in San Diego County Superior Court. ECF No. 17-2, 10 Declaration of Daniel R. Gold in Support of Motion (“Gold Decl.”) ¶ 2. The first case is a 11 family law proceeding which requests the state court to “adjudicate whether the mediator 12 in the Kallel dissolution proceeding, inadvertently failed to include the life insurance policy 13

14 15 1 Courts “may take judicial notice of ‘matters of public record.’” Lee v. City of Los Angeles, 16 250 F.3d 668, 689 (9th Cir. 2001). “Courts may also consider documents incorporated by 17 reference in the complaint.” See California Parents for Equalization of Educ. Materials v. Torlakson, 267 F. Supp. 3d 1218, 1224 n.4 (N.D. Cal. 2017) (citing Coto Settlement v. 18 Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010)). As such, the Court takes judicial notice 19 of the San Diego County Superior Court judgment which was attached to the Complaint- in-Interpleader. 20

21 2 The Trust and the Estate move to strike the Declaration of Daniel R. Gold [ECF No. 17- 2]. ECF No. 20. The Trust and the Estate claim that Gold’s Declaration was improper 22 because it equates to a second brief and circumvents Federal Rule of Civil Procedure 7 and 23 the Local Rules. Id. at 2. Gold’s Declaration was filed in support of the Motion and includes counsel’s sworn knowledge regarding the state court proceedings and a copy of the RFO. 24 See ECF No. 17-2. While declarations are not allowed as pleadings under Rule 7(a), it is 25 common practice for defense counsel to supplement motions and responses with declarations. In particular, the Court notes that the Trust and the Estate’s counsel filed their 26 own declaration with exhibits in support of their Opposition. See Oppo. at 16–18 27 (Declaration of Watkins). Further, as stated above, courts may take judicial notice of matters of public record. See Lee, 250 F.3d at 689. Therefore, the Trust and the Estate’s 28 1 at issue into the Marital Settlement Agreement and resulting Dissolution Judgment” under 2 California Family Code Section 2556. Id. ¶ 3. In addition, the first action seeks adjudication 3 of whether “the decedent ex-spouse breached his spousal fiduciary duties, which survive a 4 judgment of dissolution, based upon evidence of his post-judgment representations that he 5 had maintained the life insurance policy for the benefit of” Nazeera under California 6 Family Code Sections 1100(e) and 721(b). Id. The San Diego County Superior Court has 7 not entered judgment on this issue. ECF No. 26 ¶ 5; ECF No. 27 ¶ 5. A court ordered 8 mediation is scheduled for January 23, 2024, and the RFO evidentiary hearing is scheduled 9 for August 30, 2024. ECF No. 26 ¶ 5; ECF No. 27 ¶¶ 7–8. 10 Second, on August 23, 2023, Nazeera filed another state court action regarding the 11 proceeds of the Policy under California Probate Code Sections 850(a) and 21700(a)(4). 12 ECF No. 26 ¶ 6; ECF No. 27 ¶ 6. A preliminary hearing in this probate matter is scheduled 13 for January 24, 2024. ECF No. 26 ¶ 6; ECF No. 27 ¶ 6. 14 II. DISCUSSION 15 Nazeera moves to dismiss the action for lack of subject matter jurisdiction under the 16 “domestic relations exception,” or in the alternative, stay the action pending the outcomes 17 of the state court proceedings. See Mot. 18 A. Domestic Relations Exception 19 Nazeera first argues that this Court should dismiss the action for lack of subject 20 matter jurisdiction under the “domestic relations exception.” Nazeera states that the issues 21 in this interpleader action are based entirely upon California family law, and the “resolution 22 of the issues bears upon whether or not the final divorce judgment should be modified.” 23 See id. at 4. The Trust and the Estate contend that Nazeera should not be permitted a forum 24 of her choice by filing a state court action alleging a defect in the divorce decree after this 25 current action had already been filed. See Oppo. at 10. 26 “Divorce, and the allocation of property incident to a divorce, are longstanding local 27 functions governed by state law.” Evans v. Hepworth, 433 F. Supp. 3d 1171, 1176 (D. 28 Idaho 2020) (citing Ankenbrandt v. Richards, 504 U.S. 689, 706 (1992)). “Federal courts 1 have accordingly invoked a ‘domestic relations exception’ to diversity jurisdiction over 2 cases involving domestic relations.” Id. (citing Ankenbrandt, 504 U.S. at 694). The 3 domestic relations exception “divests the federal courts of power to issue divorce, alimony, 4 and child custody decrees.” Ankenbrandt, 504 U.S. at 703. “[T]he exception covers only 5 ‘a narrow range of domestic relations issues.’” Marshall v. Marshall, 547 U.S. 293, 307 6 (2006) (quoting Ankenbrandt, 504 U.S. at 701). The Ninth Circuit has stated the domestic 7 relations exception applied only to cases in which “the primary issue concerns the status of 8 parent and child or husband and wife.” Csibi v. Fustos, 670 F.2d 134, 137 (9th Cir. 1982) 9 (quoting Buechold v. Ortiz, 401 F.2d 371, 372 (9th Cir. 1968)). Subsequently, in Bailey v. 10 MacFarland, the Ninth Circuit held that the domestic relations exception applies to the 11 issuance or modification of a divorce decree. Bailey v. MacFarland, 5 F.4th 1092, 1096– 12 97 (9th Cir. 2021) (“State court is also the appropriate forum for determining whether the 13 decree should be modified”). 14 Nazeera suggests that Bailey is directly applicable here because the state court is 15 being asked to “determine whether a divorce decree should be modified.” Mot. at 5. In 16 Bailey, a plaintiff brought an action against her ex-husband, his son, and his son's company 17 for allegedly failing to repay the plaintiff for loans that plaintiff and her ex-husband had 18 made to the company while they were previously married. Bailey, 5 F.4th at 1094. The 19 divorce decree had stipulated that the shares of the company were marital property, and 20 that any income from it would be equally divided between the plaintiff and her ex-husband. 21 Id. The Ninth Circuit held that because the plaintiff wanted the federal court to determine 22 whether certain assets had been acquired and held by the defendant ex-husband during the 23 marriage, and then what share of them should have been divided with the defendant ex- 24 husband, the case was “at the core of the domestic relations exception.” Id. at 1097. 25 However, in Bailey, the Ninth Circuit noted that it “decline[s] to adopt the broad version 26 of the [domestic relations] exception embraced by some of [the] sister circuits,” such as the 27 Seventh Circuit, which held that the domestic relations exception also divests jurisdiction 28 from a “‘penumbra’ of cases implicating ‘ancillary proceedings . . . that state law would 1 require be litigated as a tail to the original domestic relations proceeding.’” Id. (quoting 2 Friedlander v. Friedlander, 149 F.3d 739, 740 (7th Cir. 1998)). 3 Here, although Defendants Nazeera, the Trust, and the Estate are currently in family 4 law proceedings regarding the RFO and the modification of a divorce decree, the 5 allegations in the Complaint-in-Interpleader are not seeking the implementation or 6 modification of a divorce decree. This is distinguishable from Bailey, where the plaintiff’s 7 requested remedy for a modification of the divorce decree was at the core of the domestic 8 relations exception. See Bailey, 5 F.4th at 1097; see also Csibi, 670 F.2d at 137. The 9 primary issue in this case is determining “the proper party to whom the Policy proceeds 10 are owed and payable” in light of three different scenarios. Compl. ¶ 18. Moreover, whether 11 Nazeera is entitled to the Policy proceeds implicates only one of the three possible 12 scenarios in this action. Id. Nazeera’s RFO and state court actions are ancillary or 13 overlapping issues to the federal action.3 Accordingly, this case does not fall within the 14 domestic relations exception. 15 B. Abstention and Stay 16 When the domestic relations exception does not apply, the relationship between 17 federal actions and state court actions is more properly considered in the context of 18 abstention.4 See Ankenbrandt, 504 U.S. at 704 (addressing grounds for abstention after 19

20 21 3 In particular, the Court notes that Plaintiff filed the current action on October 11, 2022, and Nazeera did not file the RFO in state court until January 9, 2023. 22

23 4 The parties have not addressed the abstention doctrines in the Motion or related briefings. See generally Mot.; Oppo.; Reply. Yet, when there are parallel federal and state suits, 24 especially in interpleader cases, courts will typically consider abstention or staying the 25 action under the different abstention doctrines. See, e.g., Scotts Co. LLC v. Seeds, Inc., 688 F.3d 1154, 1158–59 (9th Cir. 2012) (evaluating whether the federal case should be stayed 26 or dismissed in favor of related state proceedings under the Colorado River abstention 27 doctrine); Evans, 433 F. Supp. 3d at 1177–83 (evaluating whether the federal case should be stayed or dismissed in favor of related state proceedings under the Colorado River, 28 1 determining that the narrow domestic relations exception does not apply); Hao v. Chen, 2 2010 WL 3910165, at *4 (N.D. Cal. Oct. 5, 2010) (“While such overlap [with divorce 3 proceedings] might, if adequately proven, constitute grounds for abstention, it does not 4 deprive this Court of subject matter jurisdiction.”). 5 The Ninth Circuit has not opined directly on the abstention standard for interpleader 6 actions, but it has clarified that when a case presents both declaratory judgment claims5 7 and “claims that exist independent of the request for a declaration,” Colorado River applies. 8 Scotts Co. LLC v. Seeds, Inc., 688 F.3d 1154, 1158 (9th Cir. 2012) (citations omitted); see 9 also Cont’l Cas. Co. v. Duyzend, 2014 WL 34400, at *2–3 (W.D. Wash. Jan. 6, 2014).6 10 Some district courts, however, have concluded that Brillhart applies to interpleader actions. 11 See Insalaco v. Fire Ins. Exch., 2020 WL 13561583, at *4–6 (N.D. Cal. Dec. 15, 2020) 12 (applying Brillhart and Colorado River standards to an action commenced under the 13 interpleader statute); Hachette Book Grp., Inc. v. Windblown Media, Inc., 2010 WL 14 11515247, at *2 (C.D. Cal. Aug. 20, 2010) (holding that the Brillhart standard applies to 15 actions commenced under the federal interpleader statute). The Court addresses each 16 standard in turn. 17 / / / 18

19 Younger, and Burford abstention standards); Insalaco v. Fire Ins. Exch., 2020 WL 20 13561583, at *4–7 (N.D. Cal. Dec. 15, 2020) (evaluating whether the federal statutory 21 interpleader case should be stayed or dismissed in favor of the related state proceedings under the Colorado River and Brillhart standards). 22

23 5 Functionally, an interpleader claim resembles one for declaratory relief. See Insalaco, 2020 WL 13561583, at *4; Am. Gen. Life Ins. Co. v. TrustBank, 2015 WL 12830459, at *3 24 (D. Ariz. June 15, 2015) (“Effectively, Plaintiff's declaratory judgment claim is an 25 otherwise restated request for interpleader relief.”).

26 6 Because Plaintiff has been dismissed, the only live claim in this federal action is which 27 party is entitled to the interpleaded Policy proceeds. However, because the Ninth Circuit has not directly opined on which abstention standard applies to interpleader actions, the 28 1 1. Brillhart Standard 2 “[W]hen a party requests declaratory relief in federal court and a suit is pending in 3 state court presenting the same state law issues, there exists a presumption that the entire 4 suit should be heard in state court.” Chamberlain v. Allstate Ins. Co., 931 F.2d 1361, 1366– 5 67 (9th Cir. 1991) (citing Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 495 6 (1942)). “The pendency of a state court action, however, does not of itself require a district 7 court to refuse declaratory relief in federal court.” Id. at 1367. In determining whether to 8 grant declaratory relief in a particular case, a district court must “ascertain whether the 9 questions in controversy between the parties to the federal suit, and which are not 10 foreclosed under the applicable substantive law, can better be settled in the proceeding 11 pending in the state court.” Id. (quoting Brillhart, 316 U.S. at 495). 12 A district court considers the following factors in deciding whether to exercise 13 jurisdiction under Brillhart: (1) whether abstention avoids “needless decisions of state law 14 by a federal court”; (2) “whether the Complaint-in-Interpleader constitutes an effort to 15 forum shop”; and (3) “whether dismissal or stay of the Complaint-in-Interpleader would 16 avoid duplicative litigation.” See Hachette Book Grp., Inc., 2010 WL 11515247, at *2 17 (citing Smith v. Lenches, 263 F.3d 972, 977 (9th Cir. 2001)). 18 The first Brillhart factor is whether abstention will avoid “needless decisions of state 19 law by the federal court.” Smith, 236 F.3d at 977; see also Brillhart, 316 U.S. at 495 20 (counseling that a district court should ascertain whether the federal suit “can better be 21 settled in the proceeding pending in state court”). Here, the Complaint-in-Interpleader 22 requests the Court to determine who the Policy proceeds are owed and payable to between 23 the three following scenarios: (1) whether Nazeera Kallel is entitled to the Policy proceeds; 24 (2) whether the “E. Adam Kallel Trust dated November 6, 2019” is the Policy beneficiary, 25 despite the beneficiary of record being the “E. Adam Kallel Trust dated November 6, 26 2016”; or (3) whether, to the extent the November 11, 2019 beneficiary change is invalid, 27 Monique Pauline Terrazas is the Policy beneficiary. Compl. ¶ 18. Some of the issues and 28 scenarios presented in the federal action, however, are not at issue in the state court actions. 1 The state court is being requested to determine whether the Policy was a divisible 2 community asset under the Agreement and dissolution judgment and whether the Policy 3 proceeds should be awarded to Nazeera. See Gold Decl., Ex. A (Nazeera’s RFO in San 4 Diego County Superior Court). However, this Court will have to decide who the Policy 5 proceeds are owed between three potential Policy beneficiaries, and not just whether 6 Nazeera is entitled to the Policy proceeds. See Compl. ¶ 18. 7 The Trust and the Estate argue that there is no risk of interference between the federal 8 and state cases because this Court is only being asked to “enforce an existing and 9 unambiguous division of community property.” Oppo. at 11 (emphasis omitted). However, 10 the Trust and the Estate’s argument ignores the fact that if this Court were to order the 11 Policy proceeds be allocated to the “E. Adam Kallel Trust dated November 6, 2019” or to 12 Monique Pauline Terrazas and the state court then determined that the same Policy 13 proceeds should be allocated to Nazeera, those judgments would necessarily conflict. 14 Therefore, an action by this Court to determine the allocation of the Policy proceeds may 15 interfere with the state court's responsibility to confirm and allocate marital assets and 16 liabilities. See H.C. ex rel. Gordon v. Koppel, 203 F.3d 610, 613 (9th Cir. 2000) (“[A] state 17 has a vital interest in protecting the authority of the judicial system, so that its orders and 18 judgments are not rendered nugatory. This is a particularly appropriate admonition in the 19 field of domestic relations, over which federal courts have no general jurisdiction, and in 20 which the state courts have a special expertise and experience.”) (internal quotation marks 21 and citations omitted). At the very least, the state court's intended allocation of the Policy 22 proceeds could be frustrated. Moreover, the Trust and the Estate’s argument also fails to 23 acknowledge that while the family law proceeding involves the same parties, it also 24 involves California Family Code sections, California Probate Code sections, and a 25 dissolution judgment that was previously adjudicated in a prior family law proceeding. See 26 Mot. at 4; Gold Decl. In short, resolution of the ongoing state court actions will avoid 27 needless resolution of state law claims by this Court. Accordingly, the first factor weighs 28 in favor of Nazeera. 1 The second Brillhart factor is whether the Complaint-in-Interpleader “is a means of 2 forum shopping.” Smith, 236 F.3d at 977. This action was originally filed by Plaintiff 3 Protective Life, who did not claim any beneficial interest in the Policy proceeds. Compl. ¶ 4 21. Additionally, since filing the Complaint-in-Interpleader, Plaintiff has been dismissed 5 and the Defendants have remained in the action. Nothing suggests that this case is an 6 attempt to forum shop. Accordingly, the second factor weighs in favor of Nazeera. 7 The third Brillhart factor is whether dismissal or stay of this action avoids 8 duplicative litigation and a waste of judicial resources. Smith, 236 F.3d at 977. For the 9 reasons stated above, resolution of the state court actions would assist in resolving this 10 federal action because the state court is specifically being requested to determine whether 11 Nazeera should be awarded all of the Policy proceeds. Accordingly, the third factor weighs 12 in favor of Nazeera, and the Court finds the Brillhart factors warrant a dismissal or stay. 13 However, instead of dismissing the action, the Court concludes a stay of the action would 14 be more appropriate. See Wilton v. Seven Falls Co., 515 U.S. 277, 288 n.2 (1995) (“[W]here 15 the basis for declining to proceed is the pendency of a state proceeding, a stay will often 16 be the preferable course, because it assures that the federal action can proceed without risk 17 of a time bar if the state case, for any reason, fails to resolve the matter in controversy.”). 18 2. Colorado River Doctrine 19 Under Colorado River Water Conservation Dist. v. United States, abstention is 20 potentially warranted where there are concurrent state and federal lawsuits that are 21 substantially similar and where abstention would promote “[w]ise judicial administration, 22 giving regard to conservation of judicial resources and comprehensive disposition of 23 litigation.’” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 24 (1976) (quoting Kerotest Manuf. Co. v. C-O-Two Fire Equip., Co., 342 U.S. 180, 183 25 (1952)). Even where there are parallel federal and state suits, Colorado River abstention 26 should be invoked only in “exceptional circumstances.” Nakash v. Marciano, 882 F.2d 27 1411, 1415 (9th Cir. 1989) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 28 460 U.S. 1, 19 (1983)). 1 Under the Colorado River doctrine, courts generally evaluate eight factors in 2 assessing whether “exceptional circumstances” warrant federal abstention from concurrent 3 federal and state proceedings: (1) whether either court has assumed jurisdiction over the 4 property at stake; (2) the relative convenience of the forums; (3) the desire to avoid 5 piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether 6 state or federal law controls; (6) whether the state proceeding is adequate to protect the 7 parties' rights; (7) the desire to avoid forum shopping; and (8) whether the state court 8 proceedings will resolve all issues before the federal court. Seneca Ins. Co., Inc. v. Strange 9 Land, Inc., 862 F.3d 835, 841 (9th Cir. 2017). “The threshold question in deciding whether 10 Colorado River abstention is appropriate is whether there are parallel federal and state 11 suits.” ScripsAmerica, Inc. v. Ironridge Glob. LLC, 56 F. Supp. 3d 1121, 1147 (C.D. Cal. 12 2014) (internal quotation marks and citation omitted). The Supreme Court has stated that 13 a stay or dismissal under the Colorado River doctrine would be a “serious abuse of 14 discretion” unless “the parallel state-court litigation will be an adequate vehicle for the 15 complete and prompt resolution of the issues between the parties.” Moses H. Cone Mem’l 16 Hosp., 460 U.S. at 28. 17 Here, as stated above, it is unclear whether the state court actions will resolve this 18 federal case because the state court actions may only resolve Nazeera’s potential claim to 19 the Policy proceeds. Indeed, a dismissal or stay is not appropriate under these 20 circumstances. Id. (stating the decision “to invoke Colorado River necessarily 21 contemplates that the federal court will have nothing further to do in resolving any 22 substantive part of the case, whether it stays or dismisses.”). “[A] district court may enter 23 a Colorado River stay order only if it has ‘full confidence’ that the parallel state proceeding 24 will end the litigation.” Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th 25 Cir. 1993) (quoting Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 277 26 (1988)). As the Court does not have “full confidence” that the state cases will resolve the 27 parties’ entitlement to the Policy proceeds between the three scenarios, a stay or dismissal 28 1 || would be inappropriate under Colorado River and the Court need not reach the remaining 2 || Colorado River factors. 3 Regardless of whether Colorado River applies, the Court ultimately determines that 4 stay of this case is appropriate under Brillhart. Where, as here, Brillhart applies, “an 5 |}order merely staying the action does not constitute abnegation of judicial duty. On the 6 || contrary, it is a Wise and productive discharge of it. There is only postponement of decision 7 its best fruition.” Gilbertson v. Albright, 381 F.3d 965, 975 (9th Cir. 2004) (quoting 8 || Quackenbush y. Allstate Ins. Co., 517 U.S. 706, 721 (1996)). Moreover, “[e]ven in the 9 ||cases applying Brillhart abstention to interpleader actions, the federal interpleader action 10 |/is often only stayed until liability 1s determined in the pending state action and the funds 11 |/frozen in the federal court's registry can be disbursed.” See Cont’l Cas. Co., 2014 WL 12 34400, at *3. 13 CONCLUSION 14 For the foregoing reasons, the Court DENIES Defendant Nazeera Kallel’s Motion 15 ||to Dismiss and GRANTS Defendant Nazeera Kallel’s Motion to Stay the Action. This 16 ||action is STAYED pending the resolution of the San Diego County Superior Court 17 || proceedings. The parties shall file joint status report regarding the status of the San Diego 18 ||County Superior Court proceedings every ninety (90) days, with the first status report due 19 April 17, 2024. 20 IT IS SO ORDERED. 21 ||Dated: January 18, 2024 NO 22 DE | 73 Honorable Linda Lopez 34 United States District Judge 25 26 27 28