This case involved a personal injury negligence action brought by plaintiffs Cameron David and Shelby Gladd against defendants Satnam Singh and his employer Landmark Logistics, Inc. (“Landmark”) in Oklahoma federal court. Landmark was insured by CastlePoint National Insurance Company(“CastlePoint”), which is currently the subject of a California conservatorship proceeding. Defendant Singh made a motion to stay, asking the Oklahoma federal court to exercise its inherent discretion to stay the case pending the resolution of the California conservatorship proceeding. Singh’s motion was based on Burford abstention, a federal abstention doctrine to prevent interference with state insurance receivership matters. Landmark did not move for a stay or join the motion.
The Oklahoma district court denied defendant Singh’s motion for a stay, finding that the appropriate circumstances warranting Burford abstention were not present in the case. Notably, the court noted that Burford abstention requires the remand or dismissal of the action, and not merely a stay. In its analysis, the Oklahoma district court found that there was no basis to determine whether defendants’ insurance claims against CastlePoint are likely to be satisfied in the California conservatorship or any ancillary proceeding. The court noted that defendant Singh did not assert or attempt to show any irreparable harm that he would suffer if plaintiffs’ negligence case was allowed to proceed, and that his reasons for staying the case related solely to who was responsible for paying the cost to defend the case and, if plaintiffs were to prevail, for satisfying an award of damages. The court also noted that because CastlePoint had already retained counsel to represent the defendants in the action, Singh had not shown any specific injury to his defense of the case. On the other hand, the court noted that a stay would cause substantial harm to plaintiffs, whose personal injury claims against defendants would be delayed while CastlePoint’s conservator receives and processes insured claims. Thus, the court held that it would be fundamentally unfair to prevent plaintiffs’ timely pursuit of their claims, for reasons having nothing to do with the merit of the claims. Thus, the court held that defendant Singh had failed to justify a stay of the case at this juncture.
Gladd v. Landmark Logistics, Inc., No. 16-894 (D) (USDC W.D. OK. Oct. 28, 2016).