Mutual of Enumclaw Insurance Company v. Vignola, 2:16-cv-02080

2010 Nevada car accident resulted in wrongful-death verdict against insured Charles Gilman, Jr.; judgment totaled $9,096,746.00. Gilman’s policy with Mutual of Enumclaw Insurance (MOE) had $100,000 per-claim limits and $300,000 aggregate.
Gilman assigned his rights against MOE to defendant Vignola by an August 12, 2016 assignment and forbearance agreement.
Vignola sent a 20-day IFCA notice (Washington Insurance Fair Conduct Act) and later sued MOE in Washington state court alleging breach of contract, bad faith, IFCA violations, Washington Consumer Protection Act violations, and negligence.
MOE filed a federal declaratory-judgment action in D. Nev. seeking a declaration that its indemnity obligation is limited to the $100,000 policy limit.
Vignola moved to dismiss the federal action; MOE opposed. The court also noted procedural noncompliance by Vignola (local rules violations) and struck unauthorized supplemental filings.
Applying Brillhart/related Ninth Circuit precedent, the district court declined to exercise declaratory-judgment jurisdiction and granted Vignola’s motion to dismiss to avoid duplicative state litigation and needless state-law determinations.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the federal court should exercise declaratory-judgment jurisdiction over MOE’s claim interpreting Washington insurance law	MOE sought an early federal determination that its indemnity exposure is limited to policy limits (filed first in federal court).	Vignola argued parallel Washington proceedings were pending and the federal court should decline jurisdiction under Brillhart/Wilton factors.	Court declined to exercise jurisdiction: weight against jurisdiction based on needless state-law determination and duplicative litigation; dismissed action.
Whether defendant’s filings complied with local rules and whether supplemental filings were proper	MOE noted procedural defects in defendant’s filings only insofar as they affected the record.	Vignola filed a reply and unauthorized supplements; was notified to cure defects but failed to do so.	Court struck unauthorized supplements, noted local-rule noncompliance, admonished defendant to follow rules; future noncompliant filings will be stricken.

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (two-step pleading analysis; legal conclusions not assumed true)
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (district courts may decline declaratory-judgment jurisdiction)
Wilton v. Seven Falls Co., 515 U.S. 277 (discretionary nature of declaratory relief)
Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220 (Ninth Circuit guidance on federal declaratory actions and parallel state proceedings)
Allstate Ins. Co. v. Herron, 634 F.3d 1101 (factors for declining declaratory jurisdiction)
Starr v. Baca, 652 F.3d 1202 (Ninth Circuit clarification of post-Iqbal pleading standards)
Huth v. Hartford Ins. Co. of the West, 298 F.3d 800 (application of Brillhart factors)
Chamberlain v. Allstate Ins. Co., 931 F.2d 1361 (presumption favoring state court when parallel proceedings exist)
Continental Cas. Co. v. Robsac Indus., 947 F.2d 1367 (insurance law generally left to states under McCarran-Ferguson)
Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402 (district courts’ inherent power to control docket; striking filings)