Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_08-cv-00366/USCOURTS-caed-2_08-cv-00366-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

TRAVELERS CASUALTY AND SURETY

COMPANY OF AMERICA, 

No. 2:08-CV-0366-FCD-KJM

Plaintiff,

v. MEMORANDUM AND ORDER

COMERICA BANK,

Defendant.

_____________________________/

----oo0oo----

This matter is before the court on defendant Comerica Bank’s

(“defendant”) motion to dismiss the complaint of plaintiff

Travelers Casualty and Surety Company of America (“plaintiff”)

for lack of subject matter jurisdiction and for failure to state

a claim upon which relief can be granted pursuant to Federal

Rules of Civil Procedure 12(b)(1) and 12(b)(6). Alternatively,

defendant requests this court abstain from adjudicating

plaintiff’s claims in light of pending state court claims brought

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

E.D. Cal. L.R. 78-230(h).

2 As such, the court does not reach the merits of

defendant’s motion under Rules 12(b)(1) and 12(b)(6).

3 Specifically, the Indemnity Agreement was entered into

between plaintiff and 1) Sidney B. Dunmore; 2) Sid Dunmore Trust

Dated February 28, 2003; 3) Sidney B. Dunmore, as Trustee for the

Sid Dunmore Trust Dated February 28, 2003; and 4) DHI

Development, a California Corporation. (Def.’s RJN, Ex. 4.) The

Indemnity Agreement was made in consideration for plaintiff

issuing bonds on behalf of “Dunmore Homes, a California

Corporation, and its related affiliates and subsidiaries.” (Id.) 

The court assumes that Dunmore Croftwood, LLC is one of these

affiliated parties. 

2

against defendant.1

After considering the memoranda filed by the parties, and

for the reasons stated herein, the court STAYS this action

pursuant to the doctrine of abstention set forth in Colorado

River Water Conservation Dist. v. United States, 424 U.S. 800

(1976).2

BACKGROUND

This action is one of at least four involving an improvement

project that failed to proceed as planned at a 156-acre lot near

Rocklin, California. The background relevant to this action is

summarized as follows:

1. The Rocklin Project 

In December of 2005, plaintiff entered into an indemnity

agreement involving Dunmore Croftwood, LLC (“Dunmore”)3 under

which plaintiff agreed to issue construction bonds on behalf of

Dunmore guaranteeing the performance and payment obligations of

Dunmore for improvement projects it undertook. (Def.’s RJN,

filed March 26, 2008, Ex. 4.) In return, plaintiff was entitled

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3

to indemnity for payments made to claimants of the bonds issued

on behalf of Dunmore. (Id.) 

After execution of the Indemnity Agreement, Dunmore entered

into an agreement with the City of Rocklin whereby Dunmore agreed

to install and complete certain public improvements at a 156-acre

lot near Rocklin, California (“Rocklin Project”). (Troughton

Decl. in Supp. of Def.’s MTD (“Troughton Decl.”), filed March 26,

2008, Exs. 1-6.) Under the terms of its agreement with the City

of Rocklin, Dunmore was required to have both performance bonds

and payment bonds issued on its behalf. (Troughton Decl., Exs.

1-6.) Accordingly, on May 19, 2006, plaintiff issued three

performance bonds and three payment bonds on behalf of Dunmore. 

(Id.) The performance bonds guaranteed the completion of the

Rocklin Project to the City of Rocklin, while the payment bonds

guaranteed payment to parties providing labor at the Rocklin

Project. (Id.) The six bonds were classified under three

separate bond numbers, with each bond number containing one

payment bond and one performance bond in equal amounts: Bond No.

104705146 (“146") included one performance bond and one payment

bond for $1,006,674.00 each; Bond No. 104705147 (“147") included

one performance bond and one payment bond for $2,793,931.25 each;

and Bond No. 104705148 (“148") included one performance bond and

one payment bond for $1,650,673.20 each. (Id.)

In order to finance the Rocklin Project, Dunmore entered

into a loan agreement with defendant in which defendant was to

arrange financing for Dunmore in the amount of $33,973,331.00. 

(Pl.’s Compl., filed Feb. 19, 2008, Exs. 1-3). In order to

effectuate the loan to Dunmore, defendant entered into three “Set

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4 The bonds referenced in the Set Aside Agreements are

not identified by an official bond number. (Pl.’s Compl., Exs.

1-3.) However, the parties do not dispute that the bonds

referenced in the Set Aside Agreements are Bond Nos. 146, 147,

and 148. Furthermore, the value of the bonds listed in the three

Set Aside Agreements matches the value of Bond Nos. 146, 147, and

148, respectively. Also, the Set Aside Agreements and Bond Nos.

146, 147, and 148 all state they are related to the Rocklin

Project. 

5 Plaintiff contends that the Set Aside Agreements refer

to both the payment bonds and performance bonds attached to Bond

Nos. 146, 147, and 148. (Pl.’s Opp’n to MTD 6:17-8:3.) 

Defendant, on the other hand, contends that the Set Aside

Agreements refer only to the performance bonds attached to Bond

Nos. 146, 147, and 148. (Def’s. Mem. and P. & A. in Supp. of MTD

7:11-8:8.) Since this court stays the present action, this

dispute need not be resolved on the instant motion. 

4

Aside Agreements” with plaintiff. (Id. at ¶ 6.) Each Set Aside

Agreement provided that defendant was to establish a “bonded

sitework improvement category” (a “category”)--in essence, a

separate fund of money--relating to “a bond” executed by

plaintiff on behalf of Dunmore. (Id. at Exs. 1-3). The bond

referred to in the first Set Aside Agreement is Bond No. 146, the

bond referred to in the second Set Aside Agreement is Bond No.

147, and the bond referred to in the third Set Aside Agreement is

Bond No. 148.4

The funds in the categories were to be made immediately

available to plaintiff if Dunmore defaulted in the performance

and/or payment requirements5 of the bonds referenced in the Set

Aside Agreements, subject only to statutory requirements for

defendant to hold the funds. (Id. at Exs. 1-3.) The Set Aside

Agreements were created to induce plaintiff to issue the bonds on

behalf of Dunmore by providing a mechanism for plaintiff to be

compensated if it was obligated to pay claims made on the bonds

referenced in the Set Aside Agreements. (Id. at ¶ 7.)

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6 In addition, Dunmore filed for Chapter 11 Bankruptcy in

the Bankruptcy Court for the Southern District of New York. The

bankruptcy proceeding was transferred to this district in January

of 2008.

5

The Set Aside Agreements relating to Bond Nos. 146 and 147

initially established categories for amounts of $1,006,674.00 and

$2,793,931.25, respectively--the same value of Bond Nos. 146 and

147, respectively. (Id.) The Set Aside Agreement relating to

Bond No. 148 initially established a category in the amount of

$952,331.00, $698,342.20 less than the value of Bond No. 148. 

(Id.) As of November 8, 2007, the category established for Bond

No. 146 had $233,974.66 remaining; the category established for

Bond No. 147 had $1,094,518.40 remaining; and the category

established for Bond No. 148 had $95,233.10 remaining. (Id. at ¶

9.) The combined total of the remaining funds is $1,423,726.16.

(Id.) 

Beginning on or about June 1, 2006, Dunmore began entering

into agreements with various subcontractors, including Cal Sierra

Construction, Inc. (“Cal Sierra”) and Desilva Gates Construction,

L.P. (“Desilva”), to perform portions of the labor at the Rocklin

Project. (Def.’s RJN, Exs. 1-2.) After the improvements began,

both Cal Sierra and Desilva claimed that Dunmore failed to

provide payment for the work each performed at the Rocklin

Project. (Id.) 

2. Claims by Parties Involved With the Rocklin Project

Dunmore’s alleged default triggered two separate state court

actions and two separate federal court actions involving, in one

way or another, plaintiff, defendant, Dunmore, Cal Sierra, and

Desilva.6

 First, in September of 2007, Cal Sierra brought an

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7 The enforcement of bonded stop notices in California is

governed by California Civil Code section 3159, et seq. “These

provisions enable the contractor to require a construction lender

to withhold funds from the construction loan account to pay for

uncompensated work performed on the project.” North Bay Const.,

Inc. v. City of Petaluma, 143 Cal. App. 4th 552, 562 (2006).

6

action in Placer County Superior Court against Dunmore,

defendant, and four others to recover $2,368,622.25 it alleges is

owed for work performed at the Rocklin Project. (Def.’s RJN, Ex.

1.) Cal Sierra asserted four claims for relief: 1) breach of

contract; 2) foreclosure of mechanic’s lien; 3) unjust

enrichment; and 4) account stated. (Id.) All four claims were

asserted against Dunmore, while only the claim to foreclose on

the mechanic’s lien was asserted against defendant. (Id.) In

January of this year, Cal Sierra filed an amended complaint to

add a claim against defendant to enforce a bonded stop notice7 in

the amount of $2,368,622.25. (Id. at Ex. 3.) 

In November of 2007, Desilva brought an action against

Dunmore and defendant to recover $671,200.72 Desilva alleges it

is owed for work performed at the Rocklin Project. (Id. at Ex.

2.) In its complaint, Desilva asserted four claims for relief:

1) breach of contract (against Dunmore); 2) common counts

(against Dunmore); 3) foreclosure of mechanic’s lien (against

Dunmore and defendant); and 4) enforcement of a bonded stop

notice in the amount of $625,272.42 (against defendant). (Id.)

Also in November of 2007, plaintiff brought a separate

federal court action in this district against parties related to

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8 Specifically, the named defendants were Sidney B.

Dunmore; Sid Dunmore Trust dated February 28, 2003; Sidney B.

Dunmore as Trustee for Sid Dunmore Trust Dated February 28, 2003;

and DHI Development, a California Corporation. 

9 Jurisdiction was founded solely on diversity of

citizenship pursuant to 28 U.S.C. § 1332. 

10 “The Colorado River doctrine is not technically an

abstention doctrine; therefore a district court’s decision

declining to exercise federal jurisdiction pursuant to Colorado

River is more properly referred to as a stay or dismissal, as the

7

Dunmore.8

 (Id. at Ex. 4.) Pursuant to the Indemnity Agreement,

plaintiff sought to recover losses it had incurred from paying

claims on bonds issued by plaintiff on behalf of Dunmore. (Id.) 

As part of its action against Dunmore, plaintiff provided the

court with a list of claims made on bonds issued by plaintiff on

behalf of Dunmore. (Id.) 

On January 17, 2008, plaintiff sent three written demands to

defendant to disburse the remaining balance of the three

categories. (Pl.’s Compl., Exs. 4-6.) Defendant refused to

disburse the remaining funds. (Id. at ¶ 19-20.) On February 19,

2008, plaintiff brought the present action against defendant.9

Plaintiff asserted claims for 1) breach of contract; 

2) conversion; and 3) declaratory relief to recover the

undisbursed funds in the categories. (Id. at ¶¶ 24,32,50.) 

Plaintiff also brought a claim for subrogation to recoup money it

had paid to claimants involved with the Rocklin Project. (Id. at

¶¶ 44-45.) 

STANDARD 

Based on the aforementioned facts, defendant contends that

this case should be stayed or dismissed pursuant to the

abstention doctrine10 set forth by the United States Supreme

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case may be.” Smith v. Cental Az. Water Conservation Dist., 418

F.3d 1028, 1032 n.4 (9th Cir. 2005) (internal quotations

omitted). The Ninth Circuit advocates that district courts

should issue a stay instead of dismissing an action: “A stay,

like a dismissal, avoids the waste of judicial resources from

duplicative litigation in two courts.” Attwood v. Mendocino

Coast Dist. Hosp., 886 F.2d 241, 244 (9th Cir. 1989). However,

“unlike a dismissal, a stay avoids the risk that the federal

plaintiff will be time-barred from reinstating the federal suit. 

In this way, a stay will effectively conserve court resources

while avoiding premature rejection of the litigants' access...to

a federal forum.” Id. (internal quotations omitted). 

8

Court in Colorado River Water Conservation Dist. v. United

States, 424 U.S. 800 (1976). This doctrine provides that in the

presence of a concurrent state court proceeding, a federal court

can abstain from hearing an action based on “considerations of

[w]ise judicial administration, giving regard to conservation of

judicial resources and comprehensive disposition of litigation.” 

Id. at 817. 

“Abstention from the exercise of federal jurisdiction is the

exception, not the rule.” Id. at 813. “Generally, as between

state and federal courts, the rule is that ‘the pendency of an

action in the state court is no bar to proceedings concerning the

same matter in the Federal court having jurisdiction.’” Id. at

817 (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)). 

Therefore, the application of the Colorado River doctrine can be

justified “only in the exceptional circumstances where the order

to the parties to repair to the State court would clearly serve

an important countervailing interest.” Id. at 813 (internal

quotations omitted). As such, “the circumstances permitting the

dismissal of a federal suit due to the presence of a concurrent

state proceeding for reasons of wise judicial administration are

considerably more limited,” though these circumstances “do

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9

nevertheless exist.” Id. at 818. 

The Supreme Court has set forth various factors that a

district court should consider when assessing the appropriateness

of a stay or dismissal in light of concurrent state court

proceedings. These factors include (1) assumption by either

court of jurisdiction over the res or property at dispute in the

lawsuit; (2) the inconvenience of the federal forum, (3) the

desirability of avoiding piecemeal litigation, and (4) the order

in which jurisdiction was obtained by the concurrent forums. Id.

at 818. In Moses H., the court also found relevant to the

inquiry (5) whether federal law provides the decision on the

merits, and (6) the probable inadequacy of the state court

proceeding to protect the parties’ rights. Moses H. Cone

Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 23,

26 (1983). Further, the Ninth Circuit has recognized that forum

shopping can in some cases justify Colorado River abstention. 

Fireman’s Fund Ins. Co. v. Quackenbush, 87 F.3d 290, 297 (9th

Cir. 1996) (citing Travelers Indem. Co. v. Madonna, 914 F.2d

1364, 1371 (9th Cir. 1990)). However, “[n]o one factor is

necessarily determinative; a carefully considered judgment taking

into account both the obligation to exercise jurisdiction and the

combination of factors counseling against that exercise is

required.” Id. at 818-19 (citing Landis v. N. Am. Co., 299 U.S.

248, 254-55 (1936)). The factors are “to be applied in a

pragmatic, flexible manner with a view to the realities of the

case at hand.” Moses H., 460 U.S. at 21.

///

///

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11 The court notes that neither plaintiff nor defendant

explicitly addresses whether the state court actions and this

action are parallel. See Moses H., 460 U.S. at 15 (“...[T]he

decision whether to dismiss a federal action because of parallel

state-court litigation does not rest on a mechanical checklist,

but on a careful balancing of the important factors as they apply

in a given case, with the balance heavily weighted in favor of

the exercise of jurisdiction.”) (emphasis added).

10

ANALYSIS

1. Parallel Litigation11

Even though different parties are involved, the state court

actions brought by Cal Sierra and Desilva and the action brought

here by plaintiff constitute parallel litigation for purposes of

the Colorado River doctrine. Exact parallelism is not required

for the Colorado River doctrine to apply. Nakash v. Marciano,

882 F.2d 1411, 1416 (9th Cir. 1989). “It is enough if the two

proceedings are ‘substantially similar.’” Id.; Quackenbush, 87

F.3d at 297 (abstention appropriate under Colorado River doctrine

even though plaintiff in federal action claimed it was no longer

party to state proceeding). A proceeding is substantially

similar if “substantially the same parties are contemporaneously

litigating substantially the same issues in another forum.” 

Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1288

(7th Cir. 1988).

In this case, while the parties have not expressly discussed

the similarity of the actions under the parallel litigation

requirement, they do vigorously dispute whether the remaining

funds in the categories are the same funds sought by Cal Sierra

and Desilva from defendant in their respective state court

actions. Plaintiff contends that only a fraction of the funds,

if any, in the categories from the Set Aside Agreements are the

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11

same funds sought by Cal Sierra and Desilva against defendant in

state court. (Pl.’s Opp’n to MTD 5:19-6:12.) As proof,

plaintiff references the list of claims on bonds issued by

plaintiff that it provided to this court in its separate action

against Dunmore. That list shows that, of the three bonds

related to the Set Aside Agreements, only Bond No. 148 was listed

as having a claim against it. (Id. at 5:19-23.) That claim was

made by Desilva for $625,272.42, the same amount as the bonded

stop notice that Desilva seeks to enforce against defendant in

state court. (Id. at 5:22; Def.’s RJN, Ex. 2.) Plaintiff

further notes that only $95,233.10 remained in the category

related to Bond No. 148. 

Cal Sierra also made a claim on a bond issued by plaintiff

related to the Rocklin Project. (Def.’s RJN, Ex. 4.) That bond,

however, was identified with a different bond number than Bond

Nos. 146, 147, and 148. (Pl.’s Opp’n to MTD 5:4-8.) This leads

plaintiff to conclude that, at most, $95,233.10 of the

$1,423,726.16 remaining in the three categories is a portion of

the same money sought by Cal Sierra and Desilva against defendant

in state court. (Id. at 5:19-6:12.) Accordingly, plaintiff

contends that, at a minimum, 93% of the funds remaining in the

three categories are unrelated to the claims made by Cal Sierra

and Desilva against defendant in state court. (Id.)

Plaintiff’s contentions, however, ignore other facts about

the state court claims made by Cal Sierra and Desilva. They also

contradict other statements made by plaintiff in this action. 

For instance, in its opposition, plaintiff states that it has

expended $2,637,772.32 in satisfying claims pursuant to bonds

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12

related to the Set Aside Agreements. (Pl.’s Opp’n to MTD at

13:4-5.) Additionally, plaintiff stated in Dunmore’s bankruptcy

proceeding that Cal Sierra’s bond claims on the Rocklin Project

arose under Bond Nos. 146, 147, and 148 for $16,357.76,

$970,741.36, and $979,472.48, respectively. (Reply RJN in Supp.

of MTD (“Reply RJN”), filed May 2, 2008, Ex. 2.) The total of

those three bond claims is $1,966,571.60, $1,871,338.50 more than

what plaintiff contends is the amount of funds in the categories

also sought by Cal Sierra and Desilva in their state court

actions against defendant. 

Moreover, when $1,966,571.60 is added to $671,200.72--the

amount Desilva claims in its state court action that it has not

been paid--a sum of $2,637,772.32 is reached. This is the exact

amount plaintiff stated in its opposition was expended in

satisfying claims pursuant to bonds related to the Set Aside

Agreements. (Pl.’s Opp’n to MTD 13:4-5.) 

Finally, in addition to all of the foregoing, plaintiff’s

counsel stated in a letter to defendant’s counsel dated April 4,

2008, that plaintiff had made payment on 1) Bond No. 146 to Cal

Sierra in the amount of $16,357.76; 2) Bond No. 147 to Cal Sierra

in the amount of $970,741.36; 3) Bond No. 148 to Cal Sierra in

the amount of $979,472.48; and 4) Bond No. 148 to Desilva in the

amount of $671,200.72. (Reply RJN, Ex. 4.) The sum of these

payments also equals $2,637,772.32. Accordingly, despite

plaintiff’s contentions to the contrary, the money remaining in

the categories of the three Set Aside Agreements that plaintiff

seeks in this action is the same money that Cal Sierra and

Desilva seek to recover from plaintiff for their claims on Bond

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13

Nos. 146, 147, and 148. Therefore, the court finds that the

money sought by plaintiff here is for the same recovery that Cal

Sierra and Desilva seek from defendant in their respective state

court actions.

In sum, the money sought by Cal Sierra and Desilva in their

state court actions involves the same money plaintiff seeks to

recover from defendant in this action. In both cases, that money

is sought to compensate Cal Sierra and Desilva for money that

Dunmore has allegedly defaulted in paying for work at the Rocklin

Project. The only difference is that Cal Sierra and Desilva seek

the money directly from defendant in the state court actions,

while in the present action, the money would pass from defendant

to Cal Sierra and Desilva through plaintiff. That difference,

however, does not affect whether the state court actions and this

action constitute parallel litigation under Colorado River. 

For the reasons stated above, the state court actions and

this action are substantially similar and constitute parallel

litigation under the Colorado River doctrine. Accordingly,

having made that preliminary finding, the court next turns to the

factors promulgated in Colorado River and its progeny. 

2. The Colorado River Factors

Initially, the court notes that inconvenience of the federal

forum is not an issue here. Plaintiff is a party to another

action in this district, while defendant is a party to two state

court actions pending within this judicial district. 

Defendant contends that the first factor, jurisdiction over

the res, weighs in favor of this court granting a stay because

the two state court actions involve foreclosure of a mechanic’s

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12 Such a holding is consistent with the Supreme Court’s

guidance in Colorado River itself, where the Court stated that

federal court jurisdiction should be “yielded to the court first

acquiring control of property” in order to avoid “inconsistent

dispositions of property.” Colorado River, 424 U.S. at 819

(emphasis added).

14

lien. To support this argument, defendant cites to California

case law, asserting that in California, “[a]n action to foreclose

a mechanics' [sic] lien, like a mortgage foreclosure, is an in

rem action and is local in nature.” Central Bank v. Superior

Court, 30 Cal. App. 3d 913, 917 (1973). This statement of the

law is not incorrect, but it is incomplete and misleading. In

the same paragraph cited by defendant, the court in Central Bank

goes on to state that “where the main relief sought is personal,

the fact that title or possession of real property is

incidentally involved does not change its character as a

transitory action.” Id. (emphasis added). In holding that the

action before it was transitory and not in rem, the Central Bank

court noted that the plaintiff in its action “does not seek,

merely, to foreclose a mechanics' [sic] lien; [plaintiff’s] real

objective is to recover a money judgment.” Id. 

Similarly here, in their state court actions, Cal Sierra and

Desilva seek to recover money allegedly owed for work done on the

Rocklin Project. (Def.’s RJN, Exs. 1-2.) Foreclosure of a

mechanic’s lien is only incidental to that recovery. 

Accordingly, like in Central Bank, the state court actions

brought by Cal Sierra and Desilva are not in rem for the purposes

of the Colorado River doctrine.12 

However, that this case does not involve an in rem action is

not dispositive of the propriety of abstention. Even when a

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state court does not assume jurisdiction over property, courts

have often dismissed or stayed an action under Colorado River. 

See Am. Int’l Underwriters (Philippines), Inc. v. Cont’l Ins.

Co., 843 F.2d 1253, 1257-1258 (9th Cir. 1988) (abstention proper

when both state and federal claims alleged breach of obligations

under same insurance policies); Nakash, 882 F.2d at 1415 n.6

(abstention proper when both state and federal claims involved

dispute over stock purchase agreement); Quackenbush, 87 F.3d at

297-298 (abstention proper when both state and federal actions

challenged constitutionality of insurance regulations).

Furthermore, other district courts have stayed cases

involving construction and bond-payment disputes, even though the

state court did not assume jurisdiction over any property. See

U.S. for Use and Benefit of Arrow Concrete v. Ohio Farmers Ins.

Co., 981 F. Supp. 443, 445 (S.D. W. Va. 1997) (abstention proper

over subcontractor’s claim against surety when contractor brought

state action against subcontractor; both actions involved

subcontractor’s labor during construction of dam); Pace Constr.

Co., Inc. v. Travelers Cas. & Sur. Co. of Am., 259 F. Supp. 2d

934, 938 (E.D. Mo. 2003) (abstention of federal action by

subcontractor against surety proper when contractor and surety

brought action against subcontractor in state court regarding

same road construction project). Similarly, a “careful

balancing” of all the factors in this case weighs in favor of

this court granting a stay.

The most significant of the remaining factors is the

desirability of avoiding piecemeal litigation. “Piecemeal

litigation occurs when different tribunals consider the same

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issue, thereby duplicating efforts and possibly reaching

different results.” Am. Int’l Underwriters, 843 F.2d at 1258. 

The money sought by Cal Sierra and Desilva in their state court

actions against defendant involves the same money being sought by

plaintiff against defendant in this case. In either case, the

money is intended to compensate Cal Sierra and Desilva for

payments that Dunmore has allegedly failed to make. Plaintiff,

perhaps unintentionally, makes this very point in its opposition,

when it states it “does not seek to adjudicate mechanic’s lien

claims standing in its own shoes, it seeks to adjudicate

mechanic’s lien claims standing in the shoes of contractors and

subcontractors whose claims were satisfied by [plaintiff].” 

(Pl.’s Opp’n to MTD 15:11-13.) Accordingly, if an adverse

judgment is rendered against defendant in this action and in the

state court actions, defendant risks double liability. 

Furthermore, if this court and the state courts were to rule

differently, defendant may face the possibility of inconsistent

judgments. 

Next, the order in which jurisdiction was obtained does not

weigh heavily for either party. Although both state actions were

filed months before this action, “priority should not be measured

exclusively by which complaint was filed first, but rather in

terms of how much progress has been made in the two actions.” 

Moses H., 460 U.S. at 22. In this case, only plaintiff’s

complaint and defendant’s motion to dismiss have been considered

by the court. Cal Sierra’s state court action against defendant

has progressed slightly further than this action; defendant has

filed a cross-complaint, the parties have begun discovery, and

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defendant is contemplating filing a motion to consolidate the two

state court actions and a motion for summary judgment. (Reply

RJN, Ex. 6.) Desilva’s state court action has not proceeded any

further than this action. (Id.) Accordingly, although the state

court actions, when analyzed together, may have advanced slightly

farther than this action, this factor bares little weight. 

Nonetheless, additional factors weigh in favor of this court

granting a stay. For instance, the resolution of this dispute

involves no federal law and would be resolved entirely on state

law. Additionally, the state court proceedings can adequately

protect the rights of plaintiff. Plaintiff states that if this

action does not proceed, plaintiff will be prejudiced to the

extent defendant “improperly distributes funds referenced in the

Set Aside Agreements to compensate claimants for unbonded private

work rather than public work.” (Pl.’s Opp’n to MTD 17:3-5.) 

Plaintiff never states, however, how the improper distribution of

funds by defendant is related to this action. Presumably,

defendant could improperly distribute the funds regardless of

this court’s involvement since the court has no control over the

funds. Moreover, plaintiff could seek to intervene in both state

court actions, further demonstrating the ability of the state

court to protect the rights of plaintiff. See Cal. Civ. Proc.

Code § 387. 

In sum, the court acknowledges that abstention under the

Colorado River doctrine is a narrow exception, appropriate only

in extraordinary circumstances. See Quackenbush, 87 F.3d at 297;

O’Neill v. United States, 50 F.3d 677, 688 (9th Cir. 1995). Such

extraordinary circumstances are present in this case; this action

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and the two state actions are substantially similar, and a

“careful balancing” of the Colorado River factors weighs strongly

in favor of this action being stayed. 

CONCLUSION

The Supreme Court has counseled that the Colorado River

doctrine should be considered and applied “with a view to the

realities of the case at hand.” Moses H., 460 U.S. at 21. For

the foregoing reasons, the reality of the situation demonstrates

that this is an exceptional case justifying that this action be

STAYED. 

IT IS SO ORDERED. 

DATED: June 13, 2008. 

 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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