Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_02-cv-02165/USCOURTS-casd-3_02-cv-02165-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Insurance Contract

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02cv2165

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

EAGLE STAR INSURANCE COMPANY

LIMITED, a foreign corporation

Plaintiff,

v.

HIGHLANDS INSURANCE COMPANY

Defendant/Third-Party

Plaintiff

v.

ACE PROPERTY & CASUALTY

INSURANCE COMPANY, f/k/a AETNA

INSURANCE COMPANY, improperly

identified as ACE USA

Third-Party Defendant 

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Civil No. 02-CV-02165-WQH (AJB)

ORDER

HAYES, Judge:

The matter before the Court is the motion for relief from stay to take the deposition to

preserve testimony of non-party witnesses filed by Plaintiff Eagle Star Insurance Company

Limited. (Doc. # 148).

On August 7, 2003, Plaintiff Eagle Star filed a First Amended Complaint alleging that

Defendant Highlands has failed to pay its respective share of liability losses and claim expenses.

On August 15, 2003, Defendant Highlands filed a Third-Party Complaint against ACE Property

(as successor to Aetna Insurance Co.) alleging that to the extent Highlands has any liability to Eagle

Star, ACE is obligated to indemnify Highlands. 

Case 3:02-cv-02165-WQH-CAB Document 161 Filed 11/23/09 Page 1 of 3
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02cv2165

On February 26, 2004, this Court issued an order (1) denying ACE’s motion to stay/dismiss

in favor of arbitration; (2) granting ACE’s motion to dismiss Highlands’ breach of contract cause

of action; (3) denying ACE’s motion to dismiss Highlands’ unjust enrichment claim; (4) denying

ACE’s motion to strike; and (5) denying ACE’s motion to sever and stay. (Doc. # 56). Third-Party

Defendant ACE appealed the ruling regarding arbitration to the Court of Appeals for the Ninth

Circuit. (Doc. # 57). 

On March 30, 2005, the Court issued an order staying “Highlands’ third party claims against

ACE pending resolution of ACE’s appeal to the Ninth Circuit Court of Appeals” of the ruling

regarding arbitration. (Doc. # 100).

On January 27, 2006, the Ninth Circuit held that “dismissal or stay of Highlands’ third-party

complaint in favor of arbitration is required.” 2006 WL 204783, at *1. Accordingly, the stay

granted on March 30, 2005 of “Highlands’ third party claims against ACE pending resolution of

ACE’s appeal to the Ninth Circuit Court of Appeals” of the ruling regarding arbitration is no longer

in effect. 

On September 24, 2007, Plaintiff Eagle Star moved the Court to stay its claims against

Defendant Highlands pending the outcome of the Texas Court of Appeals proceedings pertaining

to the settlement between Plaintiff Eagle Star and Defendant Highlands. Plaintiff explained that

Plaintiff Eagle Star and Defendant Highlands “have reached a settlement but cannot consummate

same so long as the appeal by third party defendant here, ACE Property Casualty Insurance

Company . . . in the Texas Court remains unresolved.” (Doc. # 132 at 1.) 

On October 26, 2007, this Court granted the motion to stay filed by Plaintiff Eagle Star “so

long as the appeal by third party defendant in the Texas Court of Appeals remains unresolved.”

(Doc. # 137). 

On August 17, 2009, Plaintiff Eagle Star filed the motion now pending before this Court

seeking limited relief from the stay in order to perpetuate the testimony of two witnesses in

anticipation of the arbitration proceedings against Third-Party Defendant ACE. (Doc. # 148).

Third Party-Defendant ACE filed an opposition to the motion for relief from the stay on the

grounds that discovery matters should be resolved in the arbitration proceeding. (Doc. # 153).

Case 3:02-cv-02165-WQH-CAB Document 161 Filed 11/23/09 Page 2 of 3
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02cv2165

On August 26, 2009, the Texas Court of Appeals issued a Memorandum Opinion resolving

the action pertaining to the settlement between Plaintiff Eagle Star and Defendant Highlands

Insurance Company. Accordingly, the stay granted by his Court on October 26, 2007 “so long as

the appeal by third party defendant in the Texas Court of Appeals remains unresolved” is no longer

in effect. (Doc. # 137). 

On October 21, 2009, Plaintiff Eagle Star filed a status report stating that resolution of the

Texas appeal is final and “the settlement negotiated between Eagle Star and [Highlands], which

was substantially completed at the time approval was sought from the Texas court... can, hopefully,

be concluded within the next 30 to 60 days.” (Doc. # 158). The status report further states that

Eagle Star will commence arbitration as directed by the Court of Appeals in order to pursue the

rights of Defendant Highlands against Third-Party Defendant ACE. The Court concludes that

discovery matters relating to the arbitration should be resolved in the arbitration proceeding. 

IT IS HEREBY ORDERED that the motion for relief from stay to take the deposition to

preserve testimony of non-party witnesses filed by Plaintiff Eagle Star Insurance Company Limited

(Doc. # 148) is denied. The orders of this Court granting a stay of this action filed on March 30,

2005 and on October 26, 2007 are vacated. The parties shall proceed forthwith with the resolution

of this action. 

DATED: November 23, 2009

WILLIAM Q. HAYES

United States District Judge

Case 3:02-cv-02165-WQH-CAB Document 161 Filed 11/23/09 Page 3 of 3