United States District Court, D. Montana, Billings Division
ORDER STAYING CASE
TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE
Galilea, LLC (“Galilea”) and Taunia Kittler
(together “Plaintiffs”) brought this action
against Defendants Pantaenius America Limited
(“Pantaenius”) and Andrea M. Giacomazza (together
“Broker Defendants”); and Defendants AGCS Marine
Insurance Company, Liberty Mutual Insurance Company, and
Torus Insurance Company (together “Insurer
Defendants”). In the complaint, both Plaintiffs assert
seven counts against the Broker Defendants relating to
whether they properly procured insurance (Counts I-VII), and
Mrs. Kittler brings seven counts individually against the
Insurer Defendants relating to the denial of insurance
coverage for loss of the sailing yacht Galilea
(Counts VIII-XIV). (Doc. 1.).
is a Nevada limited liability company that was formed by
Chris and Taunia Kittler for the purpose of owning their
60-foot sailing yacht, the Galilea. (Doc. 1 at
¶ 1.) The Kittlers are Montana residents and are the
sole members of Galilea. (Id.) The Insurer
Defendants are the insurance companies who provided the
coverage under the insurance policy at issue in this case.
(Doc. 5-4.) Pantaenius specializes in obtaining and
administering yacht insurance policies, and acts as an agent
for the insurance underwriters. (Doc. 5-4; Galilea, LLC
v. AGCS Marine Ins. Co., 879 F.3d 1052, 1054 (9th Cir.
2018).) Giacomazza is an employee of Pantaenius. (Doc. 1 at
24, 2015, the Galilea ran ashore off the coast of
Panama, and was deemed a complete loss. (Doc. 1 at
¶¶ 31, 33-34.) Mr. Kittler submitted a claim for
insurance coverage the same day. (Id. at ¶ 35.)
The Insurer Defendants denied coverage on the basis that the
accident occurred outside of the cruising area identified in
the policy. (Id. at ¶ 38.)
Galilea requested the Insurer Defendants to reconsider the
coverage denial, the Insurer Defendants initiated arbitration
proceedings in New York. (Doc. 5-1.) In response, Galilea
filed an action in this Court against the Insurer Defendants.
See Galilea v. AGCS Marine Ins. Co., No.
15-cv-84-SPW, Docket No. 1 (D. Mont. August 28, 2015)
(“Galilea I”). Ultimately, United States
District Judge Susan P. Watters granted the Insurer
Defendants' motion to compel arbitration in its entirety
and dismissed the case. Galilea I, No. 15-cv-84-SPW,
Docket No. 50 (D. Mont. Feb. 9, 2018). Subsequently, on April
23, 2018, Galilea asserted counterclaims in the arbitration
proceedings. (Doc. 4-1.) The counterclaims are nearly
identical to the claims Galilea had alleged against the
Insurer Defendants in Galilea I. (Compare
Galilea I, No. 15-cv-84-SPW, Docket No. 1 with
22, 2018, Plaintiffs filed the instant action. (Doc. 1.) Mrs.
Kittler's claims against the Insurer Defendants in this
case are substantially identical to the counterclaims that
Galilea and Mr. Kittler asserted in the arbitration
proceedings. (Compare Doc. 1 at ¶¶ 82-127
with Doc. 4-1 at ¶¶ 46-54, 59-70, 77-81,
85-98.) Plaintiffs also bring claims against the Broker
Defendants for the first time. (Doc. 1.) Plaintiffs'
claims against the Broker Defendants are based on the same
nucleus of facts as the counterclaims in the arbitration
February 15, 2019, the Court issued Findings and
Recommendations, recommending that Judge Watters compel Mrs.
Kittler to arbitrate her claims against the Insurer
Defendants because she was seeking direct benefits under the
insurance policy. (Doc. 27.) The Court also recommended that
Pantaenius' motion to compel arbitration be granted.
(Id.) Thereafter, Mrs. Kittler sought to amend the
Complaint to remove Counts VIII (declaratory relief) and IX
(breach of contract) so that she could avoid arbitration.
March 19, 2019, Judge Watters issued an order rejecting the
undersigned's Findings and Recommendations. (Doc. 38.)
Judge Watters granted the Insurer Defendants' Motion to
Dismiss as to Counts VIII and IX. (Id.) As a result,
the basis for the Court's determination that Mrs. Kittler
must arbitrate her claims against the Insurer Defendants was
removed. Judge Watters also denied Pantaenius' Motion to
Compel Arbitration. (Id.) Judge Watters then
recommitted this matter to the undersigned to determine the
merit, if any, of the remainder of the Insurer
Defendants' Motion to Dismiss and/or Stay the Action
(Doc. 2), and Pantaenius' Motion to Dismiss and/or Stay
the Action. (Doc. 6.)
April 9, 2019, Defendants filed a Notice of Final Arbitration
Award with this Court, indicating the arbitration proceedings
in New York have concluded. (Doc. 41.) The New York Arbitral
Tribunal ruled: 1) all counterclaims made by Galilea and Mr.
Kittler under the policy were denied with prejudice; 2) the
policy was void ab initio due to Galilea and Mr.
Kittler's failure to disclose previous Galilea
insurance claims; and 3) Galilea and Mr. Kittler did not
establish by a preponderance of the evidence that they
notified the Insurer Defendants of their specific insurance
requirements. (Doc. 41-1 at 36-37.) Specifically, the
Arbitral Tribunal found Galilea and Mr. Kittler failed to
establish that they communicated to Pantaenius, or any person
working for Pantaenius, a specific request for expanded
insurance coverage. (Id. at 34.) Therefore, the
Arbitral Tribunal determined Galilea and Mr. Kittler were not
entitled to coverage for the grounding of the
Galilea. (Id. at 37.) The Broker Defendants
were not parties to the New York arbitration proceedings.
20, 2019, Galilea and Mr. Kittler filed a Petition to Vacate
the Arbitration Award in the United States District Court for
the Southern District of New York. See Galilea, LLC v.
AGCS Marine Insurance Company, No. 19-cv-5768-VEC,
Docket No. 1 (S.D.N.Y June 20, 2019). That action is currently
pending. The Arbitration Award, therefore, has not been
The Insurer Defendants' Motion to Dismiss and/or
Insurer Defendants first argue that all claims pursued by
Mrs. Kittler individually should be dismissed for lack of
standing. They argue Galilea is the real party in interest,
and that Mrs. Kittler has no standing to personally assert
claims for damage to property owned by the LLC. The Insurer
Defendants further point out that Galilea has already pursued
its claims against them in the arbitration proceedings. The
Insurer Defendants also argue Mrs. Kittler's individual
claims each fail as a matter of law. Alternatively, the
Insurer Defendants argue this action should be stayed ...