American Alternative Insurance Corporation v. Warner
- Kandis Westmore
- 4:19-cv-04628
- U.S. District Court · Northern District of California
- 11
In American Alternative v. Warner, Judge Westmore denied a stay and partially granted and denied sealing and document-removal motions in an insurance-rescission case.
American Alternative Insurance Corporation, John G. Warner, and the Law Offices of John G. Warner; the case continued, with limited portions of an expert report and related declaration references eligible for redaction.
What happened
American Alternative Insurance Corporation sued John G. Warner and the Law Offices of John G. Warner to rescind a professional liability insurance policy. The insurer alleged that Warner made material misrepresentations when applying for the policy. Warner and his law office asked the court to pause the case until a related malpractice lawsuit ended.
The court denied the motion to stay, finding that the two cases involved separate issues and that pausing this case would not simplify the litigation. The court also granted in part and denied in part both sides’ motions to file parts of a rebuttal expert’s report under seal. It granted in part Warner’s request to remove an incorrectly filed declaration and required a replacement declaration with limited redactions.
Judge Kandis Westmore allowed redactions of three specified portions of the expert report and related declaration references, but ruled that the expert’s name could not be redacted. The insurance-rescission case was therefore permitted to continue toward trial.
The detailed version
- American Alternative Insurance Corporation v. Warner · No. 4:19-cv-04628
- Kandis Westmore
- Dec. 16, 2020
Background
American Alternative Insurance Corporation sued John G. Warner and the Law Offices of John G. Warner seeking to rescind, or cancel, a professional liability insurance policy. The insurer alleged that the defendants made material misrepresentations in their insurance application. The application asked whether they knew of legal work or incidents that might lead to a claim, and Warner answered no. He also stated that he was not aware of claims, potential claims, disciplinary matters, investigations, or circumstances that might lead to a claim.
The dispute involved a related malpractice case brought by Warner’s former clients. That case concerned whether Warner committed malpractice by filing a malpractice action against another law firm too late. The insurance case instead concerned whether Warner should have reported the dismissal of that earlier malpractice action when applying for insurance.
Before this order, the court had denied American Alternative’s motion for summary judgment. The defendants then sought to stay the insurance case until the related malpractice case was resolved. The parties also filed motions to seal portions or all of a rebuttal expert’s report, and the defendants moved to remove an incorrectly filed declaration from the docket.
Motion to Stay
The court applied the federal standard from Landis v. North American Co. for deciding whether to pause a case. That standard considers possible harm to the nonmoving party, hardship to the party opposing the stay, and whether a stay would promote the orderly resolution of the litigation.
The court found no meaningful factual overlap between the two cases. The related malpractice case concerned the timing of the filing of the malpractice action against the other law firm. The insurance case concerned whether the defendants should have disclosed the dismissal of that action on their insurance application. The court stated that it could find that the defendants should have reported the dismissal even if they were not liable in the related malpractice case, and could also find the opposite results in the two cases.
The court also rejected the defendants’ argument that they would be unfairly forced to fight on two fronts. Discovery and motion practice in the insurance case were complete, leaving pretrial filings and a bench trial. The related malpractice case was not expected to go to trial until at least summer 2021, while American Alternative continued paying defense costs that it might not owe. The court concluded that proceeding with the insurance case was appropriate and denied Defendants’ motion to stay.
Motions to Seal
The court granted in part and denied in part Defendants’ October 29, 2020 motion to file under seal. It allowed redaction of pages 12:28–13:1, 13:15–16, and 14:19–20 of the rebuttal expert’s report.
The court also granted in part and denied in part Plaintiff’s November 2 and November 4, 2020 motions to file under seal. The same three portions of the rebuttal expert’s report could be redacted, as could references to those portions in the Capell and rebuttal expert declarations. The court ruled that the rebuttal expert’s name could not be redacted.
Motion to Remove Document
The court granted in part Defendants’ motion to remove the incorrectly filed declaration in connection with the reply. The document could be removed, but the defendants had to file a replacement declaration that redacted only the three specified portions of the rebuttal expert’s report.
Result
The court denied Defendants’ motion to stay, granted in part and denied in part the motions to file under seal, and granted in part Defendants’ motion to remove the incorrectly filed document. This order addressed case-management, filing, and confidentiality issues rather than deciding the parties’ ultimate insurance-rescission claims.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.