Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-02289/USCOURTS-cand-5_15-cv-02289-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Constitutionality of State Statutes

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Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY,

Plaintiff,

v.

VINCENT MARENTES, et al.,

Defendants.

Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO 

DISMISS, DENYING MOTIONS TO

STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

Re: Dkt. Nos. 16, 20, 24, 27, 32

Plaintiff State Farm Mutual Automobile Insurance Company (“State Farm”) brings this 

declaratory relief action against Defendants Liudmela Bichegkueva (“Bichegkueva”) and Vincent 

Marentes (“Marentes”). Before the Court are motions to dismiss filed by Bichegkueva and by 

Marentes, as well as State Farm’s motions to strike exhibits filed with Defendants’ motions to 

dismiss. See ECF No. 1 (“Compl.”); ECF No. 16-1 (“Bichegkueva Mot.”); ECF No. 21 

(“Marentes Mot.”); ECF Nos. 24 & 27 (“Mots. to Strike”). State Farm has also filed a motion for 

summary judgment. ECF No. 32. Having considered the parties’ submissions, the relevant law, 

and the record in this case, the Court GRANTS with prejudice Bichegkueva and Marentes’ 

motions to dismiss. The Court DENIES State Farm’s motions to strike and DENIES as moot State 

Farm’s motion for summary judgment. 

I. BACKGROUND

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Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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A. Factual Background

On June 16, 2013, “Marentes was driving a 2011 Dodge 5500 tow truck owned by his 

employer Extreme Towing, Inc. during the course and scope of his employment, when he rearended Liudmela Bichegkueva.” Compl. ¶ 13. On December 12, 2013, Bichegkueva filed in San 

Francisco Superior Court a negligence action against Marentes and Extreme Towing arising out of 

the June 16 incident. Id. ¶ 16. This case was later transferred to Santa Clara County Superior 

Court, and shall be referred to in this Order as the “State Court Action.” 

Shortly after Bichegkueva filed her complaint in the State Court Action, Marentes 

requested that State Farm provide him with a defense and, if necessary, indemnify him against any 

settlement or judgment. State Farm “initially denied coverage, as the tow truck [was] not an 

insured vehicle under [Marentes’ insurance] policy.” Id. ¶ 17. According to State Farm, 

Marentes’ insurance policy with State Farm covered only Marentes’ 2003 Chevrolet Impala, and 

not the 2011 Dodge 5500 that Marentes was driving when he rear-ended Bichegkueva. Id. ¶ 8. As 

a result of State Farm’s decision, Marentes and Marentes’ employer, Extreme Towing, retained 

private counsel to represent them in the State Court Action. 

On or about December 30, 2014, Marentes and Bichegueva entered into a settlement 

agreement in the State Court Action. Id. ¶ 18. This agreement contained two terms pertinent to 

the instant action. First, under the settlement agreement, Marentes stipulated to “vacating the 

Answer filed on his behalf” in the State Court Action and “allow[ing] a default to be entered 

against him.” Id. Thereafter, Bichegueva would “schedule a prove-up hearing for a judicial 

determination of total damages and entry of judgment against Marentes.” Id. Second, Marentes 

agreed to assign and transfer to Bichegueva “any and all claims and causes of action Marentes 

[might] now have or hereafter acquire against State Farm arising out of State Farm’s denial of 

Marentes’ tender as set forth above.” Id. 

On February 23, 2015, Bichegueva’s counsel notified State Farm of the settlement 

agreement, and gave State Farm one “last opportunity to defend Mr. Marentes.” ECF No. 17 

(Exh. 12 at 9). Should State Farm decline this opportunity, Bichegueva would “proceed forward 

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Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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and have a default and judgment entered against [Marentes].” Id. On March 12, 2015, State Farm 

notified Bichegueva that State Farm would begin providing a defense for Marentes. Id. at 9. State 

Farm’s counsel thereafter failed to file any documents in state court challenging the terms of the 

settlement agreement or asserting a coverage defense. On April 21, 2015, Bichegueva filed in 

Santa Clara County Superior Court a motion to enforce the settlement agreement against 

Marentes. ECF No. 18 (Exh. 10 at 5). On May 15, 2015, State Farm filed an opposition to 

Bichegueva’s motion. ECF No. 17 (Exh. 12 at 6). State Farm argued against enforcement of the

settlement agreement because Marentes could not, under Marentes’ insurance policy with State 

Farm, assign any rights to Bichegkueva without State Farm’s prior approval. Id. at 5. 

At a hearing held on May 19, 2015, Judge Joseph Huber, the presiding judge in the State 

Court Action, rejected State Farm’s arguments. Judge Huber stated that he “c[ouldn’t] do 

anything” at the time with respect to State Farm’s arguments, since the parties—Marentes and 

Bichegkueva—had entered into a stipulated settlement and order. ECF No. 43-2 (Exh. B.at 4). 

Judge Huber further stated, to State Farm, that “[y]ou’re going to have to file a motion or 

interpleader or do whatever you think is necessary to change the situation. I don’t have anything I 

can do.” Id. When State Farm’s counsel asserted that State Farm would file a motion for 

reconsideration, Judge Huber invited State Farm to do so on at least two separate occasions. Id. at 

4, 5. At the hearing’s conclusion, Judge Huber struck Marentes’ answer in the State Court Action 

and entered default against Marentes pursuant to the settlement agreement. ECF No. 16-2 (Exh. 2 

at 15–17). Bichegueva’s prove-up hearing remains pending.

B. Procedural History

On May 21, 2015, State Farm filed the instant complaint in the U.S. District Court for the 

Northern District of California. State Farm’s complaint contains two causes of action: one cause 

of action seeking “a declaration that State Farm has no duty . . . to defend Marentes from any 

claims brought against him by Liudmela Bichegkueva,” and one cause of action seeking “a 

declaration that State Farm has no duty . . . to indemnify Marentes from any claims brought 

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ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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against him by Liudmela Bichegkueva.” Compl. ¶¶ 22, 24. On July 20, 2015, Bichegkueva filed 

a motion to dismiss, and on July 21, 2015, Marentes filed a motion to dismiss. ECF No. 16-1 

(“Bichegkueva Mot.”); ECF No. 21 (“Marentes Mot.”). State Farm filed oppositions to these 

motions on August 3, 2015 and August 4, 2015, respectively. See ECF No. 23 (“Bichegkueva 

Opp’n”); ECF No. 26 (“Marentes Opp’n”). Both Bichegkueva and Marentes filed replies on 

August 10, 2015. See ECF No. 30 (“Marentes Reply”); ECF No. 31 (“Bichegkueva Reply”). On 

August 26, 2015, State Farm moved for summary judgment. ECF No. 32. Marentes and 

Bichegkueva filed a joint opposition to State Farm’s motion on September 9, 2015, and State Farm 

filed a reply on September 16, 2015. See ECF No. 39; ECF No. 40. 

II. JUDICIAL NOTICE

Defendants filed several exhibits with Defendants’ motions to dismiss. State Farm has 

moved to strike these exhibits. See ECF Nos. 24 & No. 27. State Farm’s motions to strike fail to 

comply with Civil Local Rule 7-3(a), which provides that “[a]ny evidentiary and procedural 

objections to the motion must be contained within the brief or memorandum [in opposition].” 

State Farm should have included any evidentiary objections to Defendants’ exhibits in State 

Farm’s oppositions, not in separate motions. Because State Farm has failed to comply with Civil 

Local Rule 7-3(a), the Court DENIES State Farm’s motions to strike.

However, the Court takes judicial notice of only four of Defendants’ exhibits—Exhibits B, 

2, 10, and 12—which the Court relies upon in this Order. Exhibit 10 is a copy of Bichegkueva’s 

motion to enforce the settlement agreement, filed on April 21, 2015 in Santa Clara County 

Superior Court. ECF No. 18 (Exh. 10). Exhibit 12 is a copy of State Farm’s opposition to 

Bichegkueva’s motion, filed on May 15, 2015 in Santa Clara County Superior Court. ECF No. 17 

(Exh. 12). Exhibit B is a copy of the transcript from May 19, 2015 proceedings held in Santa 

Clara County Superior Court. Finally, Exhibit 2 is a copy of the May 19, 2015 Order filed in 

Santa Clara County Superior Court striking Marentes’ answer from the State Court Action and 

entering default against Marentes pursuant to the settlement agreement. ECF No. 16-2 (Exh. 2). 

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Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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All four of these Exhibits are subject to judicial notice. See Reyn’s Pasta Bella, LLC v. Visa USA, 

Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (holding that “court filings and other matters of public 

record” are subject to judicial notice); Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 

2011) (“[A] may take judicial notice of matters [in the] public record.”). Because the Court does 

not rely upon any other exhibits, the Court need not take judicial notice of any other exhibits. 

Accordingly, State Farm’s motions to strike are DENIED, and the Court takes judicial 

notice of Exhibits B, 2, 10, and 12. 

III. LEGAL STANDARD

A. Motion to Dismiss

The Federal Declaratory Judgment Act provides that, “[i]n a case of actual controversy 

within its jurisdiction . . . any court of the United States, upon the filing of an appropriate 

pleading, may declare the rights and other legal relations of any interested party seeking such a 

declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a) (emphasis 

added). Though “a District Court cannot decline to entertain such an action as a matter of whim or 

personal disinclination,” Pub. Affairs Assocs., Inc. v Rickover, 369 U.S. 111, 112 (1962) (per 

curiam), “[t]he exercise of jurisdiction under the Federal Declaratory Judgment Act, 28 U.S.C. § 

2201(a), is committed to the sound discretion of the federal courts.” Huth v. Hartford Ins. Co. of 

the Midwest, 298 F.3d 800, 802 (9th Cir. 2002) (citation omitted). “Even if the district court has 

subject matter jurisdiction, it is not required to exercise its authority to hear [a] case.” Id. (citation 

omitted). Congress, by instituting the Declaratory Judgment Act, “sought to place a remedial 

arrow in the district court’s quiver; it created an opportunity, rather than a duty, to grant a new 

form of relief to qualifying litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995). 

In particular, under Brillhart v. Excess Insurance Company of America, 316 U.S. 491, 495

(1942), the U.S. Supreme Court held that a federal district court sitting in diversity and presiding 

over an action for declaratory relief may decide to dismiss the federal court action if, as in this 

case, another suit is pending in state court, between the same parties, and presenting the same 

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Case No. 15-CV-02289-LHK 

ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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issues of state law. The Brillhart Court proceeded to provide a non-exhaustive list of factors that a 

court might consider in determining whether or not to exercise jurisdiction over a particular case. 

See id. (“The federal court may have to consider whether the claims of all parties in interest can 

satisfactorily be adjudicated in [the state] proceeding, whether necessary parties have been joined, 

whether such parties are amenable to process in that proceeding, etc.”). In Government Employees 

Insurance Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998) (en banc), the Ninth Circuit codified

the key Brillhart factors as follows: (1) “[t]he district court should avoid needless determination of 

state law issues;” (2) “it should discourage litigants from filing declaratory actions as a means of 

forum shopping”; and (3) “it should avoid duplicative litigation.” See also id. n.5 (citing other

factors that a district court may consider in determining whether to exercise jurisdiction). 

B. Leave to Amend

Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely 

granted when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate 

decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 

1122, 1127 (9th Cir. 2000) (en banc) (internal quotation marks and alterations omitted). 

Generally, leave to amend shall be denied only if allowing amendment would unduly prejudice the 

opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. 

Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008).

IV. DISCUSSION

A. Brillhart 

In reviewing the instant motions to dismiss, the Court shall begin by analyzing the three 

Brillhart factors specifically identified by the Ninth Circuit in Dizol. The Court shall then review 

whether any other factors point in favor of or against dismissal.

1. Needless Determination of State Law Issues

With respect to the first Brillhart factor, the Court finds that dismissal would “avoid 

needless determination of state law issues.” Dizol, 133 F.3d at 1225. The issues presented in the 

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ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

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instant case center solely on disputes over California insurance law. State Farm has failed to 

demonstrate why these legal issues should be resolved in a federal forum. See, e.g., Md. Cas. Co. 

v. Witherspoon, 993 F. Supp. 2d 1178, 1183 (C.D. Cal. 2014) (“A ‘needless determination of state 

law’ may involve . . . a lawsuit with no compelling federal interest (e.g., a diversity action)”). 

More importantly, allowing State Farm to move forward with this case would require the 

Court to make a needless determination with respect to these state law issues. In the instant case, 

State Farm’s essential defense is that “[t]here is no coverage for the claim asserted by Liudmela 

Bichegkueva against Marentes, because the tow truck is not a covered vehicle as defined by the 

Auto Policy.” Compl. ¶ 20. State Farm has offered the Court no reason as to why this defense 

was not presented in the State Court Action. Indeed, there were numerous opportunities for State 

Farm to present the instant claims in the State Court Action.

First, State Farm knew that Marentes was being sued by Bichegkueva by December 2013, 

when Marentes “requested that State Farm provide him with a defense with respect to the [State 

Court] Action.” Id. ¶ 17. In response to Marentes’ request, State Farm “initially denied coverage, 

as the tow truck is not an insured vehicle under [Marentes’] policy.” Id. In other words, State 

Farm knew early on about the coverage defense that State Farm has put forward before this Court, 

and in fact asserted this defense when State Farm denied Marentes coverage at the outset of the 

State Court Action. 

Second, in March 2015—more than a year later—State Farm informed Bichegkueva that 

State Farm would begin providing a defense to Marentes. Nonetheless, after so informing 

Bichegkueva, State Farm did not file any motions or other documents in the State Court Action. 

State Farm has given no reason as to why it chose to sit on its rights. In April 2015, Bichegkueva 

filed a motion to enforce the settlement. 

Third, on May 15, 2015, four days prior to the hearing on Bichegkueva’s motion to enforce 

the settlement, State Farm finally filed a brief in opposition. In this opposition, State Farm argued 

that “Marentes’s assignment of rights to [Bichegkueva] in the Settlement Agreement [was]

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ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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contrary to [the] terms of the insurance policy into which [Marentes] entered and [was] thus 

unenforceable.” ECF No. 17 (Exh. 12 at 5). State Farm chose not to present its coverage defense 

in its opposition to Bichegkueva’s motion to enforce the settlement. State Farm has cited no 

authority that allows State Farm to pick some defenses to litigate in state court and other defenses

to litigate in federal court. 

Fourth, at the May 19, 2015 hearing, Judge Huber declined to address State Farm’s 

specific arguments. ECF No. 43-2 (Exh. B.at 2). However, Judge Huber invited State Farm to file 

a motion for reconsideration, a motion for interpleader, or any other motion in state court. Id. at 

2–4. Judge Huber expressly provided State Farm with a forum—Santa Clara County Superior 

Court—to address all of State Farm’s purported defenses. State Farm could have asserted in the 

State Court Action the very coverage defense that State Farm now seeks to assert in federal court. 

Alternatively, State Farm could have asserted this coverage defense in a separate state court action 

for declaratory relief. In any event, there is no reason why a federal forum is necessary to 

determine the issues in this case. 

Case law supports the Court’s reading. In Keown v. Tudor Insurance Company, 621 F. 

Supp. 2d 1025, 1027 (D. Haw. 2008), Plaintiff filed an action in state court against Plaintiff’s

insurer, Tudor Insurance, “seeking a declaration that [Tudor Insurance was] obligated to defend 

and indemnify Plaintiff in a separate Hawaii state action that names Plaintiff as a defendant.” 

Tudor Insurance removed the action to federal court, and Plaintiff filed a motion to remand. As in 

this case, the central legal issue in Keown was whether Tudor Insurance’s decision to deny 

coverage fell within a particular policy exclusion. After finding this to be the case’s central legal 

issue, the district court granted Plaintiff’s motion to remand, with the district court stating that 

federal courts “should decline jurisdiction to avoid needlessly determining a state law issue that 

the Hawaii courts have yet to address.” Id. at 1032. “By granting Plaintiff’s Motion for Remand, 

the Hawaii state courts can determine the proper scope of the[] exclusions [at issue].” Id. 

Consonant with Keown, many district courts within the Ninth Circuit have remanded or 

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ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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dismissed cases where, as here, an insurer brings an action in federal court solely to obtain 

declaratory relief over what is essentially a dispute over state law. See, e.g., Catholic Foreign 

Mission Soc. of Am., Inc. v. Arrowood Indem. Co., 76 F. Supp. 3d 1148, 1158 (D. Haw. 2014) 

(granting motion to remand because insurance law dispute and choice of law dispute were issues 

better left to state court); Medmarc Ins. Co. v. Berkeley Prop., Inc., 2003 WL 21018205, *3 (N.D. 

Cal. Apr. 29, 2003) (granting motion to dismiss because insurance law disputes “raise[] questions 

exclusively of state law”). Consistent with the holdings in these cases, the Court sees no reason 

why the instant action should not be dismissed.

State Farm’s arguments to the contrary lack merit. First, State Farm argues that it was not 

a party in the State Court Action. This argument, however, is belied by State Farm’s very own 

representations. As State Farm admits, State Farm agreed to provide Marentes a defense. In fact, 

in opposing Bichegueva’s motion to enforce the settlement agreement, State Farm designated

itself as the real party in interest. ECF No. 17 (Exh. 12 at 4). State Farm cannot, after making 

these representations in state court, turn around now and insist in federal court that State Farm is 

not a party to the State Court Action. 

Second, State Farm appears to argue that “[t]he coverage issue to be determined in this 

action . . . will not be litigated in the underlying personal injury case.” Marentes Opp’n at 5. The 

Court finds this argument unpersuasive. As the Court has noted, the only reason why the coverage 

issue was not litigated in the State Court Action was because State Farm chose not to do so. State

Farm knew about this coverage defense early on—this defense, in fact, underscored State Farm’s 

initial decision to deny coverage to Marentes. Over the next two years, State Farm was provided 

multiple opportunities to intervene in the State Court Action and assert all of its defenses against 

Bichegkueva. State Farm chose not to intervene. Indeed, even after Judge Huber denied State 

Farm’s opposition to the settlement agreement, Judge Huber invited State Farm to file a motion 

for reconsideration of Judge Huber’s Order, so that State Farm could assert any and all defenses

against Bichegkueva, but State Farm declined to do so. 

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MOTION FOR SUMMARY JUDGMENT

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Third, State Farm contends that “[i]t is preposterous to think that the state court would 

consider a third-party’s coverage dispute.” Id. at 8. To the contrary, insurance disputes are “an 

area [of law] that Congress has expressly left to the states.” Cont’l Cas. Co. v. Robsac Indus., 947 

F.2d 1367, 1371 (9th Cir. 1991), overruled on other grounds by Dizol, 133 F.3d at 1227. It is not 

at all preposterous to believe that the instant claims could have been resolved in state court.

In sum, the Court finds that the first Brillhart factor—whether federal court action would 

require needless determination of state law issues—weighs in favor of dismissal. 

2. Forum Shopping

The Court turns next to whether dismissal would discourage forum shopping. In 

examining this Brillhart factor, courts have looked to whether the declaratory relief action could 

have been filed in state court and could have been “coordinated with [any] pending state court 

actions.” See Great Am. Assurance v. McCormick, 2005 WL 3095972, *2 (N.D. Cal. Nov. 15, 

2005) (citing Polido v. State Farm Mut. Auto. Ins. Co., 110 F.3d 1418, 1423 (9th Cir. 1997)). In 

addition, claims for declaratory relief that are “defensive or reactive” in nature may be indicative 

of forum shopping. Robsac, 947 F.2d at 1371. 

These considerations weigh strongly against State Farm. As the Court has noted, State 

Farm could have pursued the instant action in state court. California law in fact provides a 

declaratory relief cause of action similar to the federal cause of action for declaratory relief. 

Compare Cal Civ. Proc. Code § 1060 (“Any person . . . who desires a declaration of his or her 

rights or duties with respect to another . . . may ask for a declaration of rights or duties, either 

alone or with other relief.”), with 28 U.S.C. § 2201(a) (federal court “may declare the rights and 

other legal relations of any interested party seeking such declaration, whether or not further relief 

is or could be sought.”). Thus, the instant causes of action could have been litigated in state court, 

and could have been coordinated with the State Court Action.

The Court also finds this suit to be “reactive” or “defensive.” “A ‘reactive’ or ‘defensive’ 

declaratory judgment action is typically a diversity federal action commenced by an insurer that 

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ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTIONS TO STRIKE, AND DENYING AS MOOT 

MOTION FOR SUMMARY JUDGMENT

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has already been sued in state court, either by the injured third party or the insured.” Nat. 

Chiropractic Mut. Ins. Co. v. Doe, 23 F. Supp. 2d 1109, 1117 (D. Ak. 1998). That is exactly what 

happened here. State Farm was a real party in interest to the State Court Action. State Farm

received an unfavorable ruling in that action. State Farm was invited to file a motion for 

reconsideration in state court—thereby providing State Farm with a judicial forum to litigate State 

Farm’s defenses. State Farm instead decided to file suit in federal court. 

State Farm’s only argument to the contrary is that the instant suit is not actually reactive 

because Bichegkueva has not yet filed a bad faith action against State Farm which, State Farm 

argues, would finally allow State Farm to raise certain coverage defenses. The Court is not 

persuaded. As the Court has explained, State Farm could have presented the instant coverage 

defense in the State Court Action. State Farm chose not to intervene. Even now, State Farm may 

raise the coverage defense (and, for that matter, any other defense) in state court. State Farm has 

instead chosen to move forward in federal court. State Farm does appear to be forum shopping.

Accordingly, the Court finds that the second Brillhart factor—whether dismissal would 

discourage forum shopping—weighs in favor of dismissal. 

3. Duplicative Litigation

Finally, the Court turns to the third Brillhart factor—whether dismissal would avoid 

duplicative litigation. With respect to this factor, “the dispositive question is . . . whether there 

was a procedural vehicle available to the insurance company in state court to resolve the issues 

raised in the action in federal court.” See Polido, 110 F.3d at 1423. As the Court has explained, 

State Farm could have asserted a claim for declaratory relief in state court. 

State Farm, however, contends that the issues to be resolved in the instant action are 

different from those at issue in the State Court Action. According to State Farm, the instant suit 

involves State Farm’s coverage defense, and the State Court Action concerns whether Marentes 

was negligent and whether Marentes could assign his rights to Bichegkueva. 

These differences are immaterial. As the Ninth Circuit has held, “differences in factual 

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and legal issues between the state and federal court proceedings are not dispositive because the 

insurer could have presented the issues that it brought to federal court in a separate action to the 

same court that will decide the underlying tort action.” Id. at 1423 (internal quotation marks 

omitted). In this case, State Farm could have and should have raised its claims in state court, 

whether in the State Court Action itself (as State Farm was expressly invited to do by Judge 

Huber) or in a separate suit in state court. In deciding to pursue an action in federal court, State 

Farm has eschewed both of these approaches, and has thus created mirror actions in state and 

federal court. That is duplicative litigation in the most classic sense. The Court therefore finds 

that the third Brillhart factor—whether dismissal would avoid duplicative litigation—weighs in 

favor of dismissal. 

4. Other Factors

In addition to the Brillhart factors identified above, the Ninth Circuit has also provided a 

list of additional factors that a federal district court may consider in deciding whether to exercise 

jurisdiction. These factors include: 

Whether the declaratory action will settle all aspects of the controversy; whether 

the declaratory action will serve a useful purpose in clarifying the legal relations in 

issue; whether the declaratory action is being sought merely for the purposes of 

procedural fencing or to obtain a “res judicata” advantage; or whether the use of a 

declaratory action will result in entanglement between the federal and state court 

systems. In addition, the district court might also consider the convenience of the 

parties, and the availability and relative convenience of other remedies. 

Dizol, 133 F.3d at 1225 n.5 (internal quotation marks omitted). These factors weigh against State 

Farm. Allowing State Farm to proceed in federal court would entangle the instant action with 

litigation already occurring in state court. In addition, State Farm may be seeking declaratory 

relief in federal court in order to gain a res judicata advantage. That is, State Farm is suing in 

federal court to receive a favorable ruling on State Farm’s coverage defense in advance of any 

additional litigation in state court. Finally, allowing this action to proceed would not be in the best 

interest of the parties. There is no reason why Bichegkueva and Marentes should have to litigate 

in both federal and in state court on what is quintessentially a state law question already being 

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litigated in state court.

B. Leave to Amend

The Court declines to provide State Farm with leave to amend because amendment would 

be futile and would result in undue delay. See Leadsinger, 512 F.3d at 532 (holding that leave to 

amend shall be denied if amendment would unduly prejudice the opposing party, cause undue 

delay, or be futile, or if the moving party has acted in bad faith). The Court finds futility because 

the inherent facts of the instant case—the underlying state court litigation, the unfavorable ruling 

that State Farm received in state court, the fact that State Farm could have and still can resolve its 

claims and defenses in state court, and the defensive or reactive nature of the instant suit—would 

not be cured by amendment. 

Likewise, the Court finds that allowing amendment would cause undue delay to the 

resolution of the issues at the heart of this dispute. As the Court has noted, the State Court Action 

continues to move forward. At this point, federal court involvement would only result in undue 

and unnecessary delay. The legal issues in this case arise from an incident that occurred over two 

years ago. These issues should have been, have been, and shall be resolved in state court. 

Accordingly, Marentes and Bichegkueva’s motions to dismiss are granted with prejudice. 

V. CONCLUSION

For the foregoing reasons, the Court finds dismissal of the instant action appropriate. In 

addition, the Court finds that leave to amend would be futile and would cause undue delay. 

Consequently, the Court GRANTS Marentes and Bichegkueva’s motions to dismiss with 

prejudice. The Court DENIES State Farm’s motions to strike. The Court also DENIES AS 

MOOT State Farm’s motion for summary judgment. The Clerk shall close the file. 

IT IS SO ORDERED.

Dated: November 10, 2015

______________________________________

LUCY H. KOH

United States District Judge

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