Insurance Co. of Pennsylvania v. Roman Catholic Archbishop of Los Angeles
Insurance Co. of Pennsylvania v. Roman Catholic Archbishop of Los Angeles
Opinion of the Court
MEMORANDUM
The Insurance Company of the State of Pennsylvania and Granite State Insurance
A. Claim for Specific Performance
The district court did not err by refusing to order the Archbishop to specifically perform his duty to cooperate “by providing] ... all documents, information, and analyses” that are necessary to “evaluate] the reasonableness of settlement demands.” (Internal quotations omitted.) . First, plaintiffs have an adequate legal remedy in state court.
Moreover, California courts have long characterized the insured’s duty to cooperate as a condition precedent to coverage, not as a basis on which to assert an independent cause of action. See, e.g., Valladao v. Fireman’s Fund Indem. Co., 13 Cal.2d 322, 337, 89 P.2d 643 (1939) (“[T]he condition of the policy requiring cooperation by the assured is in the nature of a condition precedent to liability on the company’s part....”). For these reasons, we believe that the California Supreme Court would require plaintiffs to present their theories as to how the Archbishop breached his duty to cooperate as a defense to liability under the policies.
Second, plaintiffs’ own position with respect to the insurance contracts counsels against the equitable relief they seek. While they have not formally denied coverage, plaintiffs have filed two actions seeking to establish that they have no obligation to indemnify the Archbishop in the underlying action. While California law may recognize their right to contest coverage in a declaratory judgment action while at the same time participating in settlement discussions, that does not bear on the question of whether specific performance
B. Abstention
Plaintiffs’ argument that the district court should have abstained in toto or not at all is without merit. Plaintiffs chose the forum in which to litigate their claim for specific performance, over which the district court had a “virtually unflagging obligation” to assert jurisdiction. Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225-26 (9th Cir. 1998) (en banc) (internal quotations omitted) (“Because claims of ... breach of contract ... provide an independent basis for federal diversity jurisdiction, the district court is without discretion to remand or decline to entertain the[m].”).
We recognize that when other claims, such as one for breach of contract, are joined with a declaratory judgment action, the district court should generally entertain the latter. See United Natl Ins. Co. v. R & D Latex Corp., 242 F.3d 1102, 1112 (9th Cir. 2001). But where, as here, the non-dedaratory relief claim (the claim for specific performance) is dropped from the case, the district court may exercise its discretion and decline to rule on the claim for declaratory relief.
Our decisions in Polido and R & D Latex cannot be distinguished on the basis that the plaintiffs in those cases voluntarily dismissed their state law claims for damages before any adjudication on the merits. Although the district court in this case dismissed plaintiffs’ claim for specific performance, it did so without exploring the
AFFIRMED.
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
. Plaintiffs concede that to obtain specific performance of a contractual obligation, they must establish, among other things, that the available legal remedy is inadequate and that they have performed under the contract. See, e.g., Byrne v. Laura, 52 Cal.App.4th 1054, 1073, 60 Cal.Rptr.2d 908 (1997).
. Indeed, plaintiffs have asserted that same theory in their state court declaratory judgment action. We see no reason why they cannot use the discovery process in that action to prove, if necessary, that they “could have settled for less money if the [Archbishop] had cooperated fully.”
. That statute provides that “[n]otwithstanding that the agreed counterperformance is not or would not have been specifically enforceable, specific performance may be compelled if ... [t]he agreed counterperformance has been substantially performed or its concurrent or future performance is assured.” Cal. Civil Code § 3386.
. District courts "possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). Thus, we review a district court's decision to abstain from a declaratory judgment action for an abuse of discretion. Snodgrass v. Provident Life & Acc. Ins. Co., 147 F.3d 1163, 1166-67 (9th Cir. 1998).
Case-law data current through December 31, 2025. Source: CourtListener bulk data.