Pacific Structures, Inc v. Greenwich Insurance Company
- Haywood Gilliam
- 4:21-cv-04438
- U.S. District Court · Northern District of California
- 3
In Pacific Structures v. Greenwich Insurance, Judge Gilliam granted dismissal of the UCL claim with leave to amend and denied a stay without prejudice.
Pacific Structures, Inc. and Greenwich Insurance Company; Pacific may amend its UCL claim within 21 days, while Greenwich may refile a properly supported stay motion.
What happened
Pacific Structures, Inc. sued Greenwich Insurance Company in an insurance coverage dispute. Pacific sought damages connected to an earlier state-court action, alleging that Greenwich delayed agreeing to defend it. The complaint included claims for declaratory relief, breach of contract, bad faith, and violation of California’s Unfair Competition Law.
Greenwich asked the court to dismiss the Unfair Competition Law claim and to pause the federal case until the state-court action was resolved. The court examined whether Pacific had adequately pleaded that claim and which legal standard applied to the requested pause.
Judge Gilliam granted the motion to dismiss the Unfair Competition Law claim, but allowed Pacific 21 days to amend it without adding claims or defendants. He denied the motion to stay without prejudice because the parties had not addressed the Colorado River standard that appeared to apply.
The detailed version
- Pacific Structures, Inc v. Greenwich Insurance Company · No. 4:21-cv-04438
- Haywood Gilliam
- Mar. 24, 2022
Background
Pacific Structures, Inc. brought an insurance coverage dispute against Greenwich Insurance Company. Pacific sought damages it allegedly suffered in an underlying state-court action after Greenwich allegedly delayed agreeing to defend Pacific. Pacific asserted four claims: declaratory relief, breach of contract, breach of the implied covenant of good faith and fair dealing, and an unfair-business-practices claim under California’s Unfair Competition Law (UCL).
Greenwich filed two motions: a motion to dismiss the UCL claim and a motion to stay, or pause, the federal case while the underlying state-court action was resolved.
UCL Claim
The court granted Greenwich’s motion to dismiss the UCL claim. It gave two reasons. First, Pacific could not obtain the UCL’s equitable remedies because its contract and bad-faith damages claims provided an adequate remedy at law. Second, the UCL allegations consisted of legal conclusions and did not provide enough factual content for the court to reasonably infer that Greenwich was liable for the alleged misconduct.
The court expressed significant doubt that Pacific could amend the complaint consistently with its obligations under Rule 11, which requires factual and legal support for court filings. But the court could not conclude that amendment would necessarily be futile. It therefore dismissed the UCL claim with leave to amend. Pacific had 21 days from the order’s date to file an amended complaint, and the amendment could not add new claims or defendants.
Motion to Stay
The court denied Greenwich’s motion to stay without prejudice. Both parties had asked the court to apply the standard from Landis v. North American Co., but the court stated that the more appropriate standard appeared to come from Colorado River Water Conservation District v. United States because Pacific’s complaint sought more than declaratory relief.
Because the Colorado River standard appeared likely to control and neither party had addressed it, the court denied the motion. The order left Greenwich free to refile a motion addressing the factors identified by the Ninth Circuit for evaluating a Colorado River stay, or to explain why that standard did not apply.
Disposition
The motion to dismiss the UCL claim was granted, and that claim was dismissed with leave to amend under the stated limits. The motion to stay was denied without prejudice. The order was signed by Judge Haywood S. Gilliam, Jr.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.