Chris-Craft has requested that this action be stayed or dismissed in light of the parallel California state court action, and the other related litigation in California. The United States Supreme Court recently reaffirmed that "district courts possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdiction prerequisites." Wilton v. Seven Falls Co., 132 L. Ed. 2d 214, 115 S. Ct. 2137, 2140 (1995). In Wilton, the Court held that exercise of the district court's discretion is governed by the standard set forth in Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 86 L. Ed. 1620, 62 S. Ct. 1173 (1942), rather than the "exceptional circumstances" test set forth in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976). 132 L. Ed. 2d 214, 115 S. Ct. 2137.
In deciding whether to abstain from hearing a declaratory judgment action, a court should "ascertain whether the question in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court." Brillhart, 316 U.S. at 493; see also Wilton, 115 S. Ct. at 2140. The factors to be considered include: (1) the scope of the pending state proceeding and nature of defenses available there; (2) whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding; (3) whether necessary parties have been joined; and (4) whether such parties are amenable to process in that proceeding. Brillhart, 316 U.S. at 493. In sustaining the opinion below, the Wilton Court added two more factors: (5) avoiding duplicative proceedings and (6) forum shopping. Wilton, 132 L. Ed. 2d 214, 115 S. Ct. 2137; Reliance Ins. Co. of Ill. v. Multi-Financial Securities Corp., 1996 U.S. Dist. LEXIS 1503, No. 94 Civ. 6971, 1996 WL 61763 (S.D.N.Y. Feb. 13, 1996). Wilton does not preclude the consideration of other factors that a district court may find relevant in assessing the suitability of abstaining from a declaratory judgment action. 115 S. Ct. at 2140.
The California action will determine the obligations of Fireman's Fund and three other insurers to defend and indemnify Chris-Craft in the underlying actions. (Shyer Aff. Ex. A.) The action before this Court will decide the identical question raised in the California action. Both parties are amenable to process in California and the Court sees no reason why the claims of all parties in interest or of any parties not yet joined cannot be satisfactorily adjudicated in that proceeding. The Court has not been made aware of any impediment to Fireman's Fund raising the same issues on which it seeks this Court's intervention, as defenses in the state court action. See Haagen-Dazs Shoppe Co. Inc. v. Born, 897 F. Supp. 122 (S.D.N.Y. 1995). Furthermore, there is no novel federal question raised by this action, that would warrant federal adjudication. See Youell v. Exxon Corp., 74 F.3d 373 (2d Cir. 1996) (finding the district court abused its discretion under Wilton by abstaining from a federal admiralty insurance case). Finally, if this Court were to adjudicate this claim, there would be duplicative proceedings.
In accordance with this Court's discretion, this action will be stayed, pending the conclusion of the California action. The Court will stay the action instead of dismissing, to insure that this action can proceed without a risk of time bar if the state case, for any reason, fails to resolve the matter in controversy. See, e.g., Wilton, 115 S. Ct. at 2143 n.2.
For the reasons stated above, Chris-Craft's motion to stay the action is GRANTED.
The Clerk of the Court is ORDERED to place this action on the suspense docket pending further notice from this Court. The parties are hereby ordered to inform the Court when the California state court case comes to a close.
DATED: New York, New York
July 30, 1996
DEBORAH A. BATTS