Rockhill Insurance Company v. High End Development, Inc.

Background

Rockhill Insurance Company sued High End Development, Inc. The opinion refers to underlying actions in which High End is being defended and to the underlying Niki Properties matter. United Specialty Insurance Company moved to intervene.

Stay ruling

The court stayed the case under its inherent authority, meaning the court’s power to pause litigation when appropriate. Applying the three factors identified in Landis v. North American Co., the court concluded that a stay was warranted.

First, the court found that Rockhill’s only identified harm was having to pay for High End’s defense immediately and later trying to recover those costs. The court characterized that harm as a cost of doing business in the insurance industry. Second, the court found that High End would be prejudiced if the case proceeded because it would have to fight its insurance carrier while defending the underlying actions. Third, the court found that deciding the insurance dispute while the other actions were pending could disrupt High End’s representation in those matters at a critical point and interfere with their orderly resolution.

Rockhill argued that the Landis analysis did not apply because the other case was not also in federal court. The court rejected that argument, citing authority indicating that the applicable weight of authority in the district and the Ninth Circuit was to the contrary.

Intervention ruling and next steps

United Specialty Insurance Company’s motion to intervene was denied as moot in light of the stay. The denial was without prejudice to refiling when the stay is lifted.

The parties must notify the court within seven days after resolution of the underlying Niki Properties matter. The court also set a case management conference for May 31, 2023. Judge Vince Chhabria signed the order.