Grinnell Mutual Reinsurance Company v. Orcutt

Background

Grinnell Mutual Reinsurance Company and Grinnell Select Insurance Company brought this action against Cheryl Orcutt, Jon Crews, David Gosch, Auto Club Insurance Association, Auto Club Property-Casualty Insurance Company, State Auto Property & Casualty Insurance Company, and State Automobile Mutual Insurance Company. The amended complaint asserted nine listed claims, including declaratory relief, equitable contribution, breach of contract, breach of the implied covenant of good faith, negligent misrepresentation, unjust enrichment, promissory estoppel, equitable estoppel, and judicial estoppel. The opinion notes that the amended complaint has no Count 2 and contains two Count 8s.

The record stated that all defendants had been served. Crews, Gosch, Auto Club Insurance Association, and Auto Club Property-Casualty Insurance Company had not appeared. Orcutt and the two State Auto defendants appeared, and the State Auto defendants were later dismissed under a stipulation among the parties who had appeared.

The court had previously denied Grinnell Mutual and Grinnell Select’s motion for judgment on the pleadings and Orcutt’s motion for summary judgment, and stayed the case while related state-court litigation was resolved. After that state-court action concluded, the court granted Grinnell Mutual and Grinnell Select’s motion to lift the stay.

Grinnell’s Motion for Judgment on the Pleadings

Grinnell Mutual and Grinnell Select moved for judgment on the pleadings on Count 1, the declaratory-relief claim against all defendants. They also sought dismissal without prejudice of their remaining causes of action under Rule 41(a) of the Federal Rules of Civil Procedure if judgment was entered on Count 1.

Rule 12(c) permits a motion for judgment on the pleadings after the pleadings are closed but early enough not to delay trial. The court denied the motion because the pleadings were not closed: Orcutt had answered, but the remaining defendants had not. The court also stated that the motion was denied because Grinnell Mutual and Grinnell Select exceeded the word limit in the applicable local rule by incorporating lengthy memoranda into their filings.

Orcutt’s Motion to Dismiss

Orcutt moved to dismiss Grinnell Mutual’s amended complaint without prejudice. She argued that the court could dismiss duplicative litigation involving the same issues and could decline to hear declaratory-judgment claims when parallel litigation existed. She asserted that the claims against her duplicated defenses in her garnishment proceeding and that the garnishment proceeding would resolve the disputes among the relevant parties.

Grinnell Mutual and Grinnell Select opposed dismissal, arguing that the garnishment action was stayed and pending in the same federal court and that no parallel state-court action was pending.

The court denied the motion. It explained that the rule against duplicative litigation concerns multiple federal suits involving the same controversy and that this case and Orcutt’s garnishment proceeding were pending in the same district court before the same judge. Regarding declaratory judgment, the court recognized that district courts have discretion to decide whether to hear such claims. It concluded that Orcutt had not demonstrated that declining to hear the claim was warranted, particularly because no parallel state-court action was pending.

Order

The court ordered that Grinnell Mutual and Grinnell Select’s motion for judgment on the pleadings was DENIED and that Orcutt’s motion to dismiss was DENIED. The Clerk of Court was also directed to terminate Docket No. 113, which had been filed as a motion for judgment as a matter of law but was also filed as Orcutt’s memorandum opposing the judgment-on-the-pleadings motion.