Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_20-cv-00867/USCOURTS-caed-2_20-cv-00867-2/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CORLYN DUNCAN and BRUCE 

DUNCAN,

Plaintiffs,

v.

ALIERA COMPANIES, INC.; TRINITY 

HEALTHSHARE, INC.; and ONESHARE 

HEALTH, LLC,

Defendants.

No. 2:20-cv-00867-TLN-KJN

ORDER

This matter is before the Court on Defendant Aliera Companies, Inc.’s (“Aliera”) Motion 

to Stay. (ECF No. 80.) Plaintiffs Bruce and Corlyn Duncan (collectively, “Plaintiffs”) filed an 

opposition. (ECF No. 85.) Aliera filed a reply. (ECF No. 87.) For the reasons set forth below, 

the Court GRANTS Aliera’s motion.

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I. FACTUAL AND PROCEDURAL BACKGROUND 

Plaintiffs were enrolled in a health care plan provided by Aleria and Trinity Healthshare, 

Inc. (“Trinity”) from January 1, 2018 through December 31, 2019. (ECF No. 19 at 1.) Aliera 

marketed, sold, and administered insurance plans for Oneshare Health, LLC when it was known 

as Unity Healthshare, LLC (“Unity”) and then subsequently acted in a similar capacity for 

Trinity. (Id. at 2.) Plaintiffs allege Aliera, Unity, and Trinity (collectively, “Defendants”) sold 

inherently unfair and deceptive health care plans to California residents and failed to provide the 

coverage the purchasers believed they would receive. (Id. at 3.) More specifically, Plaintiffs 

allege Aliera exploited an exception under the Affordable Care Act by falsely representing that 

Unity and Trinity were Health Care Sharing Ministries (“HCSMs”), which allowed Defendants to 

sell illegal insurance plans that did not comply with the minimum basic requirements for 

authorized health care plans under state or federal law. (Id. at 3–5.) 

Plaintiffs filed the operative First Amended Complaint for this purported class action on 

June 26, 2020. (ECF No. 19). Plaintiffs allege claims for: (1) illegal contract; (2) violation of 

California’s Unfair Competition Law; (3) violation of California’s False Advertising Law; (4) 

breach of fiduciary duty as to Aliera and Trinity; (5) breach of fiduciary duty as to Aliera and

Unity; and (6) unjust enrichment against Aliera. (Id.) 

Several motions to dismiss and/or compel arbitration are currently pending. (ECF Nos. 

36, 37, 38, 45, 50.) Prior to the Court ruling on those motions, Trinity filed a notice of 

bankruptcy on July 9, 2021. (ECF No. 76.) As such, the Court stayed the action as to Plaintiffs’ 

claims against Trinity. (ECF No. 79.) The Court further noted “absent any argument to the 

contrary, the action may proceed against the other Defendants.” (Id.) Aliera filed the instant 

motion to stay the case in its entirety on July 30, 2021. (ECF No. 80.) Unity did not join in the 

motion but instead consented to a stay. (Id. at 2 n.3.) 

II. STANDARD OF LAW

A district court has the “power to stay proceedings” as part of its inherent power “to 

control the disposition of the causes on its docket with economy of time and effort for itself, for 

counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254–55 (1936). “A trial court 

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may, with propriety, find it is efficient for its own docket and the fairest course for the parties to 

enter a stay of an action before it, pending resolution of independent proceedings which bear 

upon the case.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863–64 (9th Cir. 1979). 

“This rule . . . does not require that the issues in such proceedings are necessarily controlling of 

the action before the court.” Id. 

“Where it is proposed that a pending proceeding be stayed, the competing interests which 

will be affected by the granting or refusal to grant a stay must be weighed.” CMAX, Inc. v. Hall, 

300 F.2d 265, 268 (9th Cir. 1962). Those competing interests include “[1] possible damage 

which may result from the granting of a stay, [2] the hardship or inequity which a party may 

suffer in being required to go forward, and [3] the orderly course of justice measured in terms of 

the simplifying or complicating of issues, proof, and questions of law which could be expected to 

result from a stay.” Id. 

III. ANALYSIS 

Aliera moves to stay this action in its entirety due to Trinity’s bankruptcy proceedings. 

(ECF No. 80 at 2.) Aliera argues the Court should stay the action pursuant to its discretionary 

powers because: (1) Plaintiffs’ claims against Trinity are “inextricably intertwined” with their 

claims against Aliera; (2) Aliera’s right to seek indemnification from Trinity is at issue in 

Trinity’s bankruptcy; (3) Aliera and Trinity would be prejudiced if the case proceeds without 

Trinity; and (4) the interests of judicial economy weigh in favor of a stay. (Id.) 

In opposition, Plaintiffs argue the Court should not stay the entire action because: (1) 

Aliera and Unity are independently liable to Plaintiffs; (2) the Trinity bankruptcy is unlikely to 

conclude in a reasonable time; (3) prosecution of this matter will not prejudice Aliera; and (4) a 

stay will not promote judicial economy. (ECF No. 85.) 

Another district court recently addressed a nearly identical scenario involving these same 

Defendants and Trinity’s bankruptcy. See Albina v. Aliera Companies, Inc., No. 5:20-CV-496-

JMH, 2021 WL 3519460 (E.D. Ky. Aug. 10, 2021). The Albina court concluded Plaintiffs’ 

general concerns about delay did not outweigh “the benefit the [p]arties and [c]ourt would receive 

by the Bankruptcy Court narrowing some of the issues.” Id. at *2. The court further concluded 

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“[a]ny prejudice to Plaintiffs would be minimal, and Plaintiffs would not be placed at a tactical 

disadvantage.” Id. The court found the potential prejudice to Trinity in denying the stay was 

much greater, explaining, 

Since Trinity would be unable to participate following this Court’s 

decision and prior to the conclusion of the bankruptcy proceedings, 

Trinity would be prejudiced by its inability to appeal this Court’s 

decision or otherwise defend itself either in this Court, the Sixth 

Circuit Court of Appeals, or during arbitration. If Trinity can 

participate again, depending on this Court’s decision, the Parties may 

be forced to relitigate certain matters that were decided in Trinity's 

absence or participate in discovery twice.

Id. For these reasons, the Albina court stayed the action in its entirety pending the termination of 

the automatic stay imposed by Trinity’s bankruptcy. Id. at *3. 

The Court is persuaded by the well-reasoned Albina decision, which considered facts 

nearly identical to those at issue here. As in Albina, the parties seem to agree that Trinity’s 

bankruptcy is proceeding pursuant to Subchapter V of Chapter 11 of the Bankruptcy Code, which 

“was designed to expedite the bankruptcy process for small business debtors to allow them to 

reorganize quickly, inexpensively, and efficiently.” Id. at *2. Although Plaintiffs argue recent 

developments suggest the bankruptcy may be unable to proceed under the expedited procedures 

of Subchapter V, Plaintiffs raise the same general concerns about delay that were rejected in 

Albina. (See ECF No. 85 at 4–5 (“Delaying this proceeding indefinitely will increase the danger 

of prejudice to Plaintiffs resulting from loss of evidence, including the inability of witnesses to 

recall specific facts.”)); Albina, 2021 WL 3519460, at *2. The Court concludes Plaintiffs’ 

general concerns about delay are insufficient, especially considering the significant prejudice 

Trinity would suffer in the absence of a stay. Id. (“On the other hand . . . a decision limited to 

Aliera and Unity would decide issues that affect Trinity.”). More specifically, Plaintiffs do not 

dispute that Trinity’s HCSM status is a key issue in Plaintiffs’ claims against Aliera. An analysis 

of Trinity’s HCSM status and Aliera’s role in administering plans for Trinity will arguably mirror 

an analysis of Unity’s HCSM status and Aliera’s role in administering plans for Unity. The Court 

believes Trinity should participate in adjudicating these overlapping issues to prevent inconsistent 

decisions and wasted effort. Accordingly, judicial economy weighs in favor of a stay. 

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IV. CONCLUSION 

For the foregoing reasons, the Court GRANTS Aliera’s Motion to Stay. (ECF No. 80.) 

This action is STAYED and is now ADMINISTRATIVELY CLOSED pending the termination 

of the automatic stay imposed by Defendant Trinity Healthshare, Inc.’s bankruptcy proceedings. 

The case may be reopened at the request of the parties. 

IT IS SO ORDERED. 

September 9, 2021

Troy L. Nunley

United States District Judge

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