United States District Court, D. Montana, Missoula Division
AMERICAN TRUCKING AND TRANSPORTATION INSURANCE COMPANY, a Risk Retention Group, Plaintiff,
RALPH NELSON, ROBERT GORMAN, SR., BOBBY J. GORMAN, DAN DOOLEY, and WESTCHESTER SURPLUS LINES INSURANCE COMPANY, Defendants.
L. CHRISTENSEN, CHIEF JUDGE
the Court is Westchester Surplus Lines Insurance
Company's ("Westchester") Motion to Stay
Proceedings Pending Appeal of Decision on Motion to Compel
Arbitration. (Doc. 71.) Plaintiff American Trucking and
Transportation Insurance Company ("ATTIC") and
Defendant Dan Dooley oppose the motion. (Docs. 84, 85.) For
the reasons explained below, the Court denies the motion.
December 29, 2016, ATTIC filed its Original Complaint against
various officers and directors of Tango Transport and Gorman
Group. Since that time, Defendants Ralph Nelson, Robert
Gorman, and Bobby Gorman settled pursuant to a stipulated
judgment (Docs. 22, 23), a Motion to Dismiss was filed by
Defendant Dooley and judgment was issued on that motion
(Docs. 4, 33), and Defendants Darrell Forman and Liz Cannon
were dismissed because they reached a settlement with ATTIC
(Docs. 25, 26). Following the stipulated judgment and
dismissals, on July 26, 2017, ATTIC filed an Amended
Complaint adding Westchester to this action (Doc. 32.).
September 8, 2017, Westchester moved to compel arbitration of
ATTIC's claims against Westchester. Westchester also
moved to dismiss Count XI of the Amended Complaint. The Court
subsequently vacated the Preliminary Pretrial Conference in
order to resolve the pending arbitration issue. The parties
then stipulated to stay any briefing on the Motion to Dismiss
Count XI until disposition on the Motion to Compel
Arbitration. Thereafter, the Court denied the Motion to
Compel Arbitration because it found that Westchester had lost
the right to enforce the mandatory arbitration clause because
Westchester had not defended the insureds nor commenced a
declaratory action against the Insureds. (Doc. 64.) On May
15, 2018, Westchester appealed the Court's ruling on the
Motion to Compel Arbitration to the Ninth Circuit pursuant to
9 U.S.C. § 16. (Doc. 66.)
Westchester moves the Court to stay proceedings pending the
outcome of its appeal. Due to the unique nature of the
motions filed to date, the extensions of time given, and the
amendments to pleadings, this case is still in its early
stages and no Preliminary Pretrial Conference has occurred.
Hence, trial has not been set. Essentially, this case has
been in a holding pattern for over a year and a half.
courts within the Ninth Circuit, unlike those in the majority
of other circuits, are not required to automatically stay
proceedings upon the appeal of an order denying a motion to
compel arbitration." Murphy v. DirecTV, Inc.,
2008 WL 8608808, *1 (CD. Cal. 2008) (citing Britton v.
Co-op Banking Group, 916 F.2d 1405, 1411 (9th Cir.
1990)). The Ninth Circuit has explained that an automatic
stay in this context "would allow a defendant to stall
at trial simply by bringing a frivolous motion to compel
arbitration." Britton, 916 F.2d at 1412.
Instead, the decision whether to issue a stay remains
squarely within the district court's discretion.
Murphy at * 1.
moving party bears the burden of persuading the court that
the circumstances of the case justify a stay. Cesca
Therapeutics, Inc. v. SynGen Inc., 2017 WL 1174062, *2
(E.D. Cal. 2017). The district court must consider four
factors in evaluating whether to issue a stay:
(1) whether the stay applicant has made a strong showing that
he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay; (3)
whether issuance of the stay will substantially injure the
other parties interested in the proceeding; and (4) where the
public interest lies.
Leiva-Perez v. Holder, 640 F.3d 962, 964 (9th Cir.
2011) (citing Nken v. Holder, 556 U.S. 418 (2009);
Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). The
party moving for a stay must make a "threshold
showing" as to each of these four prongs.
Leiva-Perez, 640 F.3d at 965. Further, the first two
factors are the most critical. Nken, 556 U.S. at
a "stay will not issue simply because the necessary
conditions are satisfied. Rather, sound equitable discretion
will deny the stay when a decided balance of convenience
weighs against it." Philip Morris USA v. Scott,
561 U.S. 1301, 1305 (2010) (internal quotations and citation
Likelihood of Success on the Merits, or ...