Gonzalez v. Cruz

• Decision Date: 04 December 1990
• Docket Number: No. 90-1812,90-1812
• Citation: 926 F.2d 1
• Parties: Damaris GONZALEZ, et al., Plaintiffs, Appellants, v. Migdalia CRUZ, Defendant, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1

926 F.2d 1

18 Fed.R.Serv.3d 904

Damaris GONZALEZ, et al., Plaintiffs, Appellants, v. Migdalia CRUZ, Defendant, Appellee.

No. 90-1812.

United States Court of Appeals First Circuit.

Heard Dec. 4, 1990.

Decided Feb. 1, 1991.

Motion for Reconsideration Denied Feb. 26, 1991.

John E. Mudd with whom Ortiz Toro & Ortiz Brunet, was on brief, for plaintiffs, appellants.

Jose L. Delgado Cadilla, for defendant, appellee.

Before BREYER, Chief Judge, CAMPBELL and CYR, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

Plaintiff-appellant Gonzalez appeals from the district court's dismissal of her complaint based on the pendency in the courts of the Commonwealth of Puerto Rico of a lawsuit arising from the identical motor vehicle accident that gave rise to plaintiff's federal-court claim. Although we are not unsympathetic to the district court's interest in avoiding duplicative proceedings, we conclude that the factors cited by the district court are insufficient by themselves to warrant dismissal of the federal action. Nevertheless, under the principles set forth in Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), we believe there might be other factors that would justify dismissal. Alternatively, the insurer may possibly be an indispensable party under Fed.R.Civ.P. 19(b), requiring dismissal of the federal action for lack of complete diversity under 28 U.S.C. Sec. 1332. We therefore vacate the order of dismissal and remand to the district court for consideration of such further matters.

Damaris Gonzalez was injured in an automobile accident in the course of her employment. Migdalia Cruz, the driver of the other car, is a citizen of New York who was visiting relatives in Puerto Rico. Because the accident occurred in the course of Gonzalez's employment, the plaintiff was required to file a claim with the State Insurance Fund (SIF) for worker's compensation. ¹ On August 15, 1988, after what was arguably the final disposition of the claim by the SIF, ² the plaintiff brought an action in the District Court for the District of Puerto Rico against Cruz, the driver of the other car; jurisdiction was based on diversity of citizenship, 28 U.S.C. Sec. 1332. Nine days later, Gonzalez also filed an action in the Superior Court for the Commonwealth of Puerto Rico against Velazco Rental and Leasing of Puerto Rico, the owner of the automobile driven by Cruz, and its insurance carrier. ³

The district court denied defendant's original motion to dismiss in an Opinion and Order dated May 8, 1989, holding that the action was not barred under Title 11 L.P.R.A. Sec. 32 and that the claims met the jurisdictional amount. Defendant's motion for reconsideration was denied in August, 1989. Defendant subsequently filed a motion under Fed.R.Civ.P. 19(a) to join the SIF as a party, and the SIF filed a motion to intervene. While these motions were pending, defendant filed a second motion to dismiss on July 3, 1990, arguing that the complaint should be dismissed because of the pending state action. Without ruling on the motions relating to the SIF, the district court entered an order July 24, 1990, dismissing the complaint.

The district court explained that it "[had] no doubt that the state courts are fully capable of resolving the entire controversy between the parties and that the public interest in avoiding piecemeal and inefficient litigation is particularly strong where it is evident that the extant state proceedings will adjudicate the entire controversy." Opinion and Order at 2-3. Gonzalez argues that dismissal of her federal district court complaint merely because proceedings were pending in the Puerto Rico court was an illegitimate refusal to exercise federal jurisdiction and should, therefore, be reversed.

ANALYSIS

A. Abstention under Colorado River

In Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the Supreme Court listed various circumstances under which a federal district court might decline to exercise jurisdiction based on the pendency of a state action arising out of the same transaction. The Colorado River approach was premised upon "consideration of 'wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.' " Colorado River, 424 U.S. at 817, 96 S.Ct. at 1246 (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183, 72 S.Ct. 219, 221, 96 L.Ed. 200 (1952)). Stressing that these circumstances were very narrow, the Court set forth four factors: 1. whether property is involved in the litigation; 2. the inconvenience of the federal forum; 3. the desirability of stopping piecemeal litigation; and 4. the order in which jurisdiction was obtained by the courts. 424 U.S. at 813, 96 S.Ct. at 1244. In Moses H. Cone v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1982), the Court added two more elements: 5. whether federal law or state law controls and 6. whether the state forum will adequately protect the interests of the parties.

In Colorado River itself, the Court sustained the district court's stay of its own proceedings pending resolution of the state court proceedings. The Court nevertheless cautioned that "[o]nly the clearest of justifications will warrant dismissal." 424 U.S. at 819, 96 S.Ct. at 1247. After Moses H. Cone, in which the Court reversed the district court's grant of a stay, commentators have suggested that "there will be rare cases in which 'exceptional circumstances' will exist justifying stay or dismissal because of a concurrent state proceeding." Wright, Miller and Cooper, Federal Practice & Procedure Sec. 4247, 150-54.

This court recently considered the application of Colorado River principles in Villa Marina Yacht Sales v. Hatteras Yachts, 915 F.2d 7 (1st Cir.1990). In Villa Marina, we held that "the pendency of an overlapping state court suit is an insufficient basis in and of itself to warrant dismissal of a federal suit." Id. at 12. There we concluded that the factors considered by the district court were insufficient to warrant dismissal, but we noted that other issues weighed in favor of the surrender of federal jurisdiction. Consequently, we vacated the district court's dismissal order and remanded for further consideration. We adopt the same approach here.

Although the district court's opinion does not cite Colorado River, it addresses several factors deemed relevant by the Supreme Court in Colorado River and Moses H. Cone, including the order in which jurisdiction was obtained and the fact that the case is governed by state law. These factors, however, do not, by themselves, justify abstention given the strong presumption in favor of the exercise of federal jurisdiction, Moses H. Cone, 460 U.S. at 16, 103 S.Ct. at 937. On the other hand, it is possible that a full consideration of all of the relevant factors could lead the district court properly to decline jurisdiction. As the present record is inadequate for such a complete evaluation--especially in respect to the relationships between the insurance company, the rental company, and the alleged tortfeasor--we do not attempt the evaluation ourselves. Rather, as in Villa Marina, we remand to the district court, which is better suited to the task. We shall discuss, however, the possible effect of some of the relevant factors, in order to guide the district court in its weighing and balancing of these against its obligation to exercise jurisdiction in the absence of extraordinary circumstances. Our analysis is not meant to be exhaustive; the district court may entertain other considerations that it determines to be appropriate.

We point out initially that two factors cited by the Supreme Court in Colorado River are of no significance here. Property is not involved in this case--this is not a proceeding in rem. Also, the federal forum is no less convenient than is the state forum--both courts are located in the same city.

With respect to the third factor, the order in which jurisdiction was obtained, the district court noted that "the case in the state court was filed around the same time the present case was filed alleging damages against a different defendant but as a result of the same cause of action." Opinion and Order at 1. Other circuits have held that the filing of a second lawsuit by the same plaintiff should weigh against the exercise of federal jurisdiction. See, e.g., American Int'l Underwriters v. Continental Ins. Co., 843 F.2d 1253 (9th Cir.1988); LaDuke v. Burlington Northern R.R. Co., 879 F.2d 1556 (7th Cir.1989); Interstate Material Corp. v. City of Chicago, 847 F.2d 1285 (7th Cir.1988); Telesco v. Fuel and Masons, 765 F.2d 356 (2d Cir.1985). The significance of this factor, however, must be examined in light of the motivation of the plaintiff in filing the second suit. For example, in American Int'l Underwriters, the Ninth Circuit upheld the district court's dismissal of the complaint because the second filing permitted the plaintiff to circumvent the policy against plaintiff removal. See 843 F.2d at 1261.

In this case the plaintiff's claims in the federal suit are not, facially at least, duplicative of the claims in the commonwealth suit; the defendants are different in each. Moreover, the federal suit here is not "vexatious or reactive." 460 U.S. at 18 n. 20, 103 S.Ct. at 938 n. 20. Plaintiff, indeed, sued in federal court first--thus obviously not in response to an unfavorable ruling in the commonwealth court. Because both suits were filed within a two-week period, the commonwealth action following the federal, the timing of the filings does not seem to argue either in favor of or against the exercise of jurisdiction. The Supreme Court stated in Moses H. Cone that the relative progress of the suits is more important than the strict order in which the courts obtained jurisdiction. In this case,...