VOYAGER INDEMNITY INSURANCE COMPANY v. GOLDSMITH (2024)

Proceedings: IN CHAMBERS ORDER

Before the Court is a Motion to Dismiss, or in the Alternative, Stay Plaintiff's Federal Court Action (“Motion to Dismiss”), filed by defendant Carey Ann Goldsmith (“Goldsmith”). (Docket No. 51.) Voyager Indemnity Insurance Company (“Voyager” or “Plaintiff”) filed an Opposition (Docket No. 52), and Goldsmith filed a Reply (Docket No. 54). Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral argument.

I. Background

This action arises from a dispute involving an underlying personal injury action between the defendants, Goldsmith and Matthew Joshua Deiley (“Deiley”), pending in Orange County Superior Court, Goldsmith v. Deiley, et al. Case No. 30-2020-01168637 (the “Underlying Action”). In that action, Goldsmith seeks to recover damages she sustained in a motor vehicle accident involving Deiley. At the time, Deiley was driving a car he rented from Fair Titling Trust that was insured under a fleet automobile policy issued by Voyager. On September 30, 2020, Voyager alleges that it accepted Goldsmith's “policy limit” settlement demand, and later sent Goldsmith's counsel a proposed release of all claims against Deiley, advising that Voyager would issue a $50,000 check (the amount of the policy limit) upon receipt of the signed release. Voyager alleges that Goldsmith never responded, ignored Voyager's attempts to finalize the settlement, and instead filed the Underlying Action against Deiley seeking more than $10,000,000 in damages. The Underlying Action is currently set for trial on August 12, 2024.

Voyager then brought this action to obtain declaratory relief regarding the rights of the parties under the policy. The Court dismissed the Complaint for lack of subject matter jurisdiction based on Plaintiff's failure to sufficiently allege the parties’ citizenship for purposes of invoking the Court's diversity jurisdiction on September 19, 2023. (Docket No. 17.) Voyager filed a First Amended Complaint (“FAC”) on September 28, 2023. (Docket No. 18.) Defendant Deiley did not file an answer to the FAC, and the Clerk entered Deiley's default on November 29, 2023. (Docket No. 27.) Following Goldsmith's Motion to Dismiss the FAC, Voyager filed a Second Amended Complaint (“SAC”) on January 16, 2024. (Docket No. 38.) Goldsmith filed a Motion to Dismiss the SAC on February 6, 2024. (Docket No. 44.) On March 1, 2024, the Court granted the Motion to Dismiss with leave to amend based on the failure of the SAC to allege facts demonstrating Voyager's standing in the action. (Docket No. 47.)

On March 22, 2024, Voyager filed a Third Amended Complaint (“TAC”). (Docket No. 48.) The TAC requests that the Court enter a judgment declaring that: (1) there is a valid and enforceable settlement agreement between Voyager and Goldsmith resolving all claims against Deiley; and (2) Voyager's duty to indemnify is subject to the policy's coverage limit of $50,000. (TAC at ¶¶ 43-50). The TAC also asserts a claim against Goldsmith for breach of contract, alleging that Goldsmith breached the parties’ settlement agreement by filing the Underlying Action against Deiley. (Id. at ¶¶ 38-42.) Voyager claims that as a result of the alleged breach, it has incurred fees and costs in excess of $75,000 defending its insured, Deiley, in the Underlying Action. (Id. at ¶ 42.) The TAC is virtually identical to the SAC, adding allegations establishing Voyager's basis for asserting Deiley's claims, and its authority to settle claims on behalf of Deiley. Specially, the TAC alleges that: (1) Deiley is an insured under the Policy; (2) Voyager has a duty to defend Deiley under the Policy; and (3) Voyager has a contractual right to settle claims against Deiley as an insured under the Policy. (TAC ¶¶ 12, 14, 16, 17 & 31.)

Goldsmith now moves to dismiss the TAC, or in the alternative stay this action pending resolution of the Underlying Action. Goldsmith contends that: (1) the Court lacks subject matter jurisdiction over this matter because there is no case or controversy, and the amount in controversy does not exceed $75,000; (2) the TAC seeks an advisory opinion prohibited by the Declaratory Judgment Act; (3) this action amounts to forum shopping – which is also prohibited by the Declaratory Judgment Act – because the Underlying Action involving the same parties and facts is already pending; (4) at a minimum, the Court should stay this action until the Underlying Action is resolved; and (5) Voyager fails to state a viable breach of contract claim.¹

II. Legal Standard

A. Rule 12(b)(1)

Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only over matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). “Rule 12(b)(1) jurisdictional attacks can be either facial or factual.” White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “The court need not presume the truthfulness of the plaintiff's allegations.” Id. “Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 (9th Cir. 2003).

B. Rule 12(b)(6)

For purposes of a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6), plaintiffs in federal court are generally required to give only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). While the Federal Rules allow a court to dismiss a cause of action for “failure to state a claim upon which relief can be granted,” they also require all pleadings to be “construed so as to do justice.” Fed. R. Civ. P. 12(b)(6), 8(e). The purpose of Rule 8(a)(2) is to “ ‘give the defendant fair notice of what the ․ claim is and the grounds upon which it rests.’ ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The Ninth Circuit is particularly hostile to motions to dismiss under Rule 12(b)(6). See, e.g., Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 248–49 (9th Cir. 1997) (“The Rule 8 standard contains a powerful presumption against rejecting pleadings for failure to state a claim.”) (internal quotation omitted).

However, in Twombly, the Supreme Court rejected the notion that “a wholly conclusory statement of a claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery.” Twombly, 550 U.S. at 561, 127 S.Ct. 1955 (internal quotation omitted). Instead, the Court adopted a “plausibility standard,” in which the complaint must “raise a reasonable expectation that discovery will reveal evidence of [the alleged infraction].” Id. at 556, 127 S.Ct. 1955. For a complaint to meet this standard, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235–36 (3d ed. 2004) (“[T]he pleading must contain something more ․ than ․ a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”) (alteration in original)); Daniel v. County of Santa Barbara, 288 F.3d 375, 380 (9th Cir. 2002) (“ ‘All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.’ ”) (quoting Burgert v. Lokelani Bernice Pauahi Bishop Trust, 200 F.3d 661, 663 (9th Cir. 2000)). “[A] plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotations omitted). In construing the Twombly standard, the Supreme Court has advised that “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

III. Analysis

A. Subject Matter Jurisdiction

Goldsmith argues that the Court lacks jurisdiction because there is no case or controversy until there is a judgment against Deiley for more than the amount of the policy. Goldsmith also argues that if the Court finds that Voyager has presented a case or controversy, the Court should decline to exercise its discretion to decide this case under Brillhart v. Excess Ins. Co., 316 U.S. 361, 363 (1987).² Voyager argues that the relief it seeks – a determination that there is a valid settlement agreement with Goldsmith and damages as a result of the breach of that agreement – presents a case or controversy that is appropriate for the Court to address now. Voyager also argues that the Court should reject Goldsmith's attempt to “re-cast” the nature of the relief it is seeking as somehow dependent on the existence of an “excess” judgment.

Under the Declaratory Judgment Act, “any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201(a). “[F]ederal courts have never been empowered to issue advisory opinions.” F.C.C. v. Pacifica Foundation, 438 U.S. 726, 735, 98 S.Ct. 3026, 57 L.Ed.2d 1073 (1978). The Ninth Circuit has explained: “[w]hen presented with a claim for a declaratory judgment, [ ] federal courts must take care to ensure the presence of an actual case or controversy, such that the judgment does not become an unconstitutional advisory opinion.” Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1157 (9th Cir. 2007) (citation omitted); see also Coal. for a Healthy Cal. v. F.C.C., 87 F.3d 383, 386 (9th Cir. 1996) (noting that “federal courts have never been empowered to issue advisory opinions”). “Absent a true case or controversy, a complaint solely for declaratory relief under 28 U.S.C. § 2201 will fail for lack of jurisdiction under Rule 12(b)(1).” Rhoades, 504 F.3d at 1157.

“An actual case or controversy exists where ‘the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’ ” Id. (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007)). “Moreover, the dispute has to be ‘definite and concrete, touching the legal relations of parties having adverse legal interests.’ ” Id. (quoting MedImmune, 549 U.S. at 127, 127 S.Ct. 764); see also Veoh Networks, Inc. v. UMG Recordings, Inc., 522 F. Supp. 2d 1265, 1269 (S.D. Cal. 2007) (“The controversy must be real, substantial, and capable of specific relief through a decree of conclusive character.”).

The Ninth Circuit has explained that “[t]wo issues are presented to the district court” when it assesses whether it may and should exercise jurisdiction over an action for declaratory judgment. American States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir. 1994). “First, the court must inquire whether there is a case of actual controversy within its jurisdiction. Jurisdiction to award declaratory relief exists only in a case of actual controversy. We have held that this requirement is identical to Article III's constitutional case or controversy requirement.” Id. at 143. “Second, if there is a case or controversy within its jurisdiction, the court must decide whether to exercise that jurisdiction.” Id. at 143-44. In assessing whether to exercise its discretion to entertain a declaratory relief claim over which it possesses subject matter jurisdiction, district courts apply the factors set out in Brillhart v. Excess Ins. Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942). “The district court should avoid needless determination of state law issues; it should discourage litigants from filing declaratory actions as a means of forum shopping; and it should avoid duplicative litigation.” Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998).

1. This Matter Presents a Live Case or Controversy

“Article III of the Constitution requires that there be a live case or controversy at the time that a federal court decides the case ․” Burke v. Barnes, 479 U.S. 361, 363, 107 S.Ct. 734, 93 L.Ed.2d 732 (1987). A case arises within the meaning of the Constitution if it involves “[a] declaration on rights as they stand ․, not on rights which may arise in the future ․, [and] an actual controversy over an issue, not a desire for an abstract declaration of the law.” In re Summers, 325 U.S. 561, 566–67, 65 S. Ct. 1307, 89 L. Ed. 1795 (1945). “Standing is a jurisdictional issue deriving from the ‘case or controversy’ requirement of Article III of the United States Constitution.” Native Vill. of Kivalina v. ExxonMobil Corp., 696 F.3d 849, 867 (9th Cir. 2012) (citing Cole v. Oroville Union High Sch. Dist., 228 F.3d 1092, 1098 (9th Cir. 2000)). The party invoking federal jurisdiction bears the burden to establish Article III standing. Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

The Court concludes that Voyager has alleged facts demonstrating its standing and the existence of a dispute of “sufficient immediacy” to satisfy Article III's case or controversy requirement. The TAC alleges a dispute between the parties based on conduct that occurred in the past – namely, whether there is an enforceable settlement agreement and whether Goldsmith breached that agreement. This dispute is real, substantial, and capable of specific relief. Goldsmith's main argument is that Plaintiff's claims are not ripe for review because it has not yet been determined whether Deiley is liable to Goldsmith. However, when addressing similar arguments in cases where an insurance company seeks to clarify its duties, the Ninth Circuit has held that “an insurer's declaratory judgment action regarding its duty to defend and indemnify was sufficiently ripe, even when the underlying liability action in state court had not yet proceeded to judgment.” Kearns, 15 F.3d at 144 (9th Cir. 1994). The Court thus declines to re-frame the case in the manner suggested by Goldsmith, and rejects Goldsmith's argument that the case is somehow not ripe or justiciable until after there is an excess liability judgment in the Underlying Action.

2. The Brillhart Factors Favor Retaining Jurisdiction Over this Action

Under Brillhart, a district court should consider the following factors when determining whether to exercise jurisdiction over a claim for declaratory relief: “[t]he district court should avoid needless determination of state law issues; it should discourage litigants from filing declaratory actions as a means of forum shopping; and it should avoid duplicative litigation. Dizol, 133 F.3d at 1225. “[W]hen other claims are joined with an action for declaratory relief (e.g., bad faith, breach of contract, breach of fiduciary duty, rescission, or claims for other monetary relief), the district court should not, as a general rule, remand or decline to entertain the claim for declaratory relief.” Id. As the Dizol court recognized, these factors are not exhaustive. Dizol, 133 F.3d at 1225 n.5 (citing additional factors for courts to consider) (quoting Kearns, 15 F.3d at 145).

“ ‘[T]here is no per se rule against the district court exercising its jurisdiction to resolve an insurance coverage dispute when the underlying liability suit is pending in state court.” Kearns, 15 F.3d at 145. Instead, Brillhart guides the Court's discretion under the Declaratory Judgment Act. Brillhart requires district courts to consider whether exercising jurisdiction would require “needless determination of state law issues”, encourage forum shopping, or lead to duplicative litigation in state and federal court. Dizol, 133 F.3d at 1225. However, “[i]f there are parallel state proceedings involving the same issues and parties pending at the time the federal declaratory action is filed, there is a presumption that the entire suit should be heard in state court.” Id. (citing Chamberlain v. Allstate Ins. Co., 931 F.2d 1361, 1366-67 (9th Cir. 1991)). In addition to considering the Brillhart factors, the Court must “balance concerns of judicial administration, comity, and fairness to the litigants.” Chamberlain, 931 F.2d at 1367.

a. Needless Determination of State Law Issues

The first Brillhart factor considers whether the federal action would involve needless determinations of state law. The concern is with unsettled issues of state law, not fact-finding in the specific case. Cont'l Cas. Co. v. Robsac Indus., 947 F.2d 1367, 1371 (9th Cir. 1991), overruled on other grounds by Dizol, 133 F.3d at 1227. Here, the main issue presented by the declaratory action is whether Voyager and Goldsmith entered into a valid and enforceable settlement agreement of her claims against Deiley, Thus, the Underlying Action does not constitute a parallel proceeding; it is merely a concurrent action, and Voyager, having properly alleged diversity jurisdiction, has chosen to file its case in federal court. The action before this Court is not factually analogous to the Underlying Action. While the set of facts leading to the Underlying Action are the same as those which necessitated the settlement demand, the issues to be determined in this action are related to the alleged settlement of the claims against Deiley between Voyager and Goldsmith. Thus, there is little or no overlap between the issues presented in the Underlying Action pertaining to Deiley's liability for the accident, and those presented here. Moreover, Voyager is not a party in the Underlying Action. Accordingly, the Court finds the first Brillhart factor favors retaining jurisdiction of this action.

b. Forum Shopping

The Court finds that the second Brillhart factor, which is aimed at discouraging forum shopping, supports this Court's exercise of jurisdiction as well. “Forum shopping weighs in favor of a stay when the party opposing the stay seeks to avoid adverse rulings made by the state court or to gain a tactical advantage from the application of federal court rules.” See Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1371 (9th Cir. 1990) (citation omitted). This is not the case here, as there is no evidence at this time that Voyager has acted in bad faith or seeks to gain a tactical advantage from filing this action in federal court.

c. Duplicative Litigation

This factor looks to see if there is a “parallel proceeding” in state court. Cases are parallel, for this purpose, “in the sense that the ultimate legal determination in each depends on the same facts.” Am. NAt. Fire Ins. Co. v. Hungerford, 53 F.3d 1012, 1015 (9th Cir. 1995), overruled on other grounds by Dizol, 133 F.3d at 1220. As noted above, although the state court proceeding and this action arise from the same set of facts, the legal issues that need to be determined are different, and only this declaratory judgment action would determine the parties’ contractual rights. See Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1108 (9th Cir. 2011) (“Here, the district court did not abuse its discretion by maintaining jurisdiction over [the insurer's] declaratory judgment action. This case presents a straightforward contract dispute between [the insurer] and [the insured], over which the district court has jurisdiction based on the parties’ diversity.”) In the Underlying Action the issue is whether Goldsmith is entitled to recover damages from Deiley based on the circumstances of an automobile accident, while in this action, the issues are whether the parties previously settled their claims relating to that accident, and whether Goldsmith breached that contract by filing the Underlying Action. Because the legal issues are different in the two actions, there is little risk of duplicative litigation. Thus, this factor favors the Court's retaining jurisdiction over this action.

d. Weighing the Factors

As there is no substantial overlap between the issues in this action and those in the state court case, continued litigation of this action is unlikely to interfere with the “orderly and comprehensive disposition of the state court litigation.” Brillhart, 316 U.S. at 496, 62 S.Ct. 1173 (stating that “gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided”). Moreover, Voyager's claims for declaratory relief are joined together in this action with its breach of contract claim, another factor weighing in favor of entertaining jurisdiction.

Accordingly, because each of the Brillhart factors favor the exercise of jurisdiction, and having considered the other relevant considerations articulated in Dizol, the Court retains jurisdiction over this declaratory judgment action. The Court thus denies Goldsmith's Motion to Dismiss based on lack of subject matter jurisdiction and the Court's discretion under the Declaratory Judgment Act.

B. Sufficiency of Breach of Contract Claim

Goldsmith also argues that the TAC fails to allege the existence of a contract. The TAC alleges that on September 10, 2020, Goldsmith sent Voyager a policy limit demand which offered to accept all applicable policy limits in exchange for the release of all of Goldsmith's claims against Deiley. (TAC ¶ 19.) Goldsmith sent “part two” of the demand – her medical records – on September 14, 2020. (Id. ¶ 20.) Voyager obtained an extension to reply to the demand, and accepted the demand on September 30, 2020, two days before the expiration of the extended time period. (Id. at ¶¶ 23-27.) Voyager's acceptance of the demand was made orally, in a phone call between Voyager's adjustor and Goldsmith's counsel. (Id. at ¶ 26.) During this conversation, Voyager conveyed its acceptance and offered to provide a release and Goldsmith's counsel “led Voyager's adjustor to understand that nothing further was required at that time ․” (Id.) The TAC alleges that “[c]onsequently, there is a binding written settlement agreement as between Goldsmith and Voyager ․ [whereby] Goldsmith released any and all claims against Deiley arising from the Incident in exchange for payment of Voyager's $50,000 policy limits.” (Id. ¶ 40.) The TAC also alleges that “[b]ased on this September 30 communication, Voyager understood that it had successfully accepted the Demand and formed a binding written settlement agreement.” (Id. ¶ 27.) Additionally, although Goldsmith's counsel stated that she would call Voyager's adjustor the next day to discuss future steps necessary to execute the release and payment, she never followed up by either email or phone. (Id. ¶ 28.) The TAC alleges that Voyager thus sent it own proposed release form to Goldsmith's counsel on October 6, 2020. (Id. ¶ 29.)

Goldsmith argues that the Court should consider extrinsic evidence – the initial settlement offer she sent to Voyager on September 10, 2020 (Soleimany Dec. Ex. A, Docket No. 51-3) along with the proposed release Voyager sent to Goldsmith's counsel on October 6, 2020 (Complaint Ex. B), to conclude that Voyager's October 6, 2020 proposed release did not constitute an acceptance of the demand because it directly contradicted the terms of the written offer ³ . Generally, district courts may not consider material outside the pleadings when assessing the sufficiency of a complaint under Rule 12(b)(6). Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). But “[t]here are two exceptions to this rule: the incorporation-by-reference doctrine, and judicial notice under Federal Rule of Evidence 201.” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (noting documents incorporated by reference and “matters of which a court may take judicial notice” are properly considered when ruling on a motion to dismiss).

“Incorporation-by-reference is a judicially created doctrine that treats certain documents as though they are part of the complaint itself.” Khoja, 899 F.3d at 1002. A defendant may seek to incorporate a document into the complaint “if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim.” U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). “The doctrine prevents plaintiffs from selecting only portions of documents that support their claims, while omitting portions of those very documents that weaken – or doom – their claims.” Khoja, 899 F.3d at 1002. Similarly, a court may take judicial notice of facts that are “not subject to reasonable dispute,” Fed. R. Evid. 201(b), as well as documents that are referred to in the complaint, that are central to the plaintiff's claims, and whose authenticity is not disputed. See, e.g., Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. Cty of Santa Clara, 307 F.3d 1119, 1127 (9th Cir. 2002).

Here, the Court need not decide whether to consider the extrinsic evidence.⁴ While this evidence may ultimately be necessary to establish whether there is a valid contract between the parties, that question is not appropriate for decision at this time. The determination of whether there was an agreement, which conversations and documents form that agreement, and whether that agreement should be considered written or oral, is more appropriately decided on a motion for summary judgment or by the trier of fact, and not on a motion to dismiss.⁵ See Bustamante v. Intuit, Inc., 141 Cal. App. 4th 199, 208, 45 Cal.Rptr.3d 692 (2006) (“Where the existence of a contract is at issue and the evidence is conflicting or admits of more than one inference, it is for the trier of fact to determine whether the contract actually existed.”).

The essential question in this case is whether the parties reached an agreement to settle Goldsmith's claims against Deiley. “Under California law ․ [a] valid contract requires: (1) parties capable of contracting; (2) their consent; (3) a lawful object; and (4) a sufficient cause or consideration.” Thomas v. JPMorgan Chase Bank, N.A., No. SA CV 15-00518 DMG (FFMx), 2015 WL 12683961, at *3 (C.D. Cal. Sept. 15, 2015) (citation omitted). “An essential element of any contract is the consent of the parties, or mutual assent. Mutual assent usually is manifested by an offer communicated to the offeree and an acceptance communicated to the offeror.” Donovan v. RRL Corp., 26 Cal.4th 261, 270, 109 Cal.Rptr.2d 807, 27 P.3d 702 (2001) (citations omitted). While this issue may sometimes be decided on a motion to dismiss, that is simply not the case where the parties dispute the evidence of contract formation. Alexander v. Codemasters Grp. Ltd., 104 Cal. App. 4th 129, 141, 127 Cal.Rptr.2d 145, (2002), as modified on denial of reh'g (Dec. 13, 2002) (“ ‘[W]hether a certain or undisputed state of facts establishes a contract is one of law for the court ․ On the other hand, where the existence and not the validity or construction of a contract or the terms thereof is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury or other trier of the facts to determine whether the contract did in fact exist ․”) (citations omitted).

The Court concludes that Voyager has plausibly alleged a claim for breach of contract that is sufficient to withstand a motion to dismiss. Accordingly, Goldsmith's Motion to Dismiss the breach of contract claim is denied.

C. A Stay of this Action is Not Warranted

Lastly, Goldsmith argues that the Court should stay this action pending resolution of the Underlying Action under Wilton v. Seven Falls Co., 515 U.S. 277, 288, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) and the Court's inherent power to control its docket and promote efficient use of judicial resources.

“A trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case.” Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857, 863 (9th Cir. 1979). The California Supreme Court has declared that “[t]o eliminate the risk of inconsistent factual determinations that could prejudice the insured, a stay of the declaratory relief action pending resolution of the third party suit is appropriate when the coverage question turns on facts to be litigated in the underlying action.” Montrose Chem. Corp. v. Superior Court, 6 Cal.4th 287, 301, 24 Cal.Rptr.2d 467, 861 P.2d 1153 (1993). “It is only where there is no potential conflict between the trial of the coverage dispute and the underlying action that an insurer can obtain an early trial date and resolution of its claim that coverage does not exist.” David Kleis, Inc. v. Superior Court, 37 Cal. App. 4th 1035, 1045, 44 Cal.Rptr.2d 181 (1995) (emphasis in original). However, absent overlapping factual issues, the insurer's declaratory relief action need not be stayed. A court exercising its discretion on a motion to stay in such a case must balance “the insured's interest in not fighting a two-front war against the insurer's interest in not being required to continue paying defense costs which it may not owe and likely will not be able to recoup.” Great American Ins. Co. v. Sup. Ct., 178 Cal. App. 4th 221, 237, 100 Cal.Rptr.3d 258 (2009).

Here, Goldsmith fails to meet her burden of demonstrating that a stay is necessary. Because none of the issues in the Underlying Action overlap with the issues in this action, retaining jurisdiction over this action will not result in inconsistent factual determinations. Moreover, this action seeks to protect the interests of Voyager's insured by establishing that the claims against Deiley are barred by the parties’ settlement agreement. Thus, Goldsmith fails to establish the risk of inconsistent factual determinations that could operate to prejudice the insured. Accordingly, Goldsmith's Motion to Stay is denied.

Conclusion

Based on the foregoing, the Court denies Goldsmith's Motion to Dismiss. Goldsmith shall file her answer to the Third Amended Complaint no later than May 24, 2024.

IT IS SO ORDERED.

FOOTNOTES

1.   The Court notes that Goldsmith's brief violates the Local Rules and the Court's Standing Order regarding page limits. Local Rule 11-6 provides: “No memorandum of points and authorities, pre-trial brief, trial brief, or post-trial brief shall exceed 25 pages in length, excluding indices and exhibits, unless permitted by order of the judge.” The Court's Standing Order reiterates this requirement and states that “[f]ilings which do not conform to ․ this Order ․ will not be considered. (Docket No. 16 at p. 5.) In her reply brief, Goldsmith apologized to the Court for violating the rules. The Court has considered Goldsmith's Memorandum of Points and Authorities in its entirety in ruling on this Motion. Goldsmith is warned, however, that any future violation of the Federal Rules of Civil Procedure, the Local Rules or the Court's orders may result in the imposition of sanctions.

2.   Lastly, Goldsmith asserts that there is no diversity jurisdiction because the amount in controversy is less than $75,000. The Court disagrees, however, and concludes that Voyager has plausibly alleged an amount in controversy in excess of $75,000. (See TAC ¶¶ 8, 42.)

3.   Voyager argues against the Court's consideration of the extrinsic evidence both on the merits, and on the ground that Goldsmith's arguments premised on this evidence are barred by Federal Rule of Procedure 12(g)(2) because she failed to include these arguments in her prior Motions to Dismiss. Rule 12(g)(2) provides that a defendant who fails to assert a failure to state a claim defense in a pre-answer Rule 12 motion cannot assert that defense in a later pre-answer motion under Rule 12(b)(6). In re Apple iPhone Antitrust Litig., 846 F.3d 313, 317-18 (9th Cir. 2017), aff'd sub nom. Apple Inc. v. Pepper, ––– U.S. ––––, 139 S. Ct. 1514, 203 L.Ed.2d 802 (2019). Although Voyager's argument has merit, the Court has considered Goldsmith's new arguments in the interest of efficiency. See Coles Valley Church v. Oregon Land Use Bd. of Appeals, No. 6:20-CV-00661-MK, 2021 WL 1950181, at *8 (D. Or. May 14, 2021) (noting that the Ninth Circuit has indicated that it will be “forgiving” over a district court's decision to entertain a successive Rule 12(b)(6) motion when it is done in the interest of efficiency).

4.   Even if the Court were to consider the extrinsic evidence, Goldsmith's argument ignores the well pleaded allegations in the TAC that the contract was formed on September 30, 2020, and not on October 6, 2020.

5.   Goldsmith also argues that the two-year statute of limitations for actions involving oral contracts bars Voyager's breach of contract claim. This argument also fails because it depends on the same premature determination of whether the alleged contract in this case is written, oral, or both.

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE