Litigants shouldn’t be afraid to revisit requesting dismissal based on comity

Posted on 09/02/2016 at 12:00 AM by Mollie Pawlosky

Property Casualty Co. of America v. Flexsteel Industries, Inc. (Ia. Ct. App. Aug. 17, 2016) demonstrates that a litigant shouldn’t be afraid to renew a motion to dismiss based on comity. Comity permits, but does not require, a court to stay or dismiss a case where the same parties and the same subject matter are pending in a court in another state. Travelers v. Flexsteel, an insurance coverage dispute, arose from a complicated procedural history with suits that were filed in Indiana and Iowa, and prior proceedings before the Court of Appeals. The simple lesson of Travelers, however, is that between the first appeal and the most recent appeal, the procedural posture of the litigation had changed, such that it was within the trial court’s discretion to dismiss the suit based on comity.

In deciding a motion to stay or dismiss a suit based on principles of comity, the court considers whether the foreign litigation is at an advanced or preliminary stage; the likelihood of obtaining complete relief in the foreign jurisdiction; and the possibility that a judgment entered in the foreign jurisdiction will give rise to collateral estoppel or will render the matter before the court res judicata.

Flexsteel filed a motion to stay or dismiss the Iowa actions in 2011, arguing that the Indiana suit resolve the parties’ disputes.  The Iowa court denied the motion, which denial was affirmed by the Court of Appeals in 2014.  After the appeal was final, Flexsteel again moved to dismiss based on comity, noting that the Court of Appeals had held in the earlier appeal that Indiana had the most significant relationship to the dispute (when ruling on a separate appellate issue regarding choice of law). Thus, there was no longer a legitimate purpose for the Iowa courts to entertain arguments related to Indiana law. Indiana courts would be deciding the same issues involving the same parties, and the Indiana lawsuits were moving forward with discovery, while the Iowa actions were “in [their] infancy.” (Flexsteel had not answered.)

The Court of Appeals acknowledged that the prior appeal had decided the choice of law issue, which was binding upon the parties, with limited exception, but the choice of law decision did not control whether the court could apply comity principles to dismiss the case. Choice of law is not a factor in comity analysis. Rather, the Court of Appeals simply analyzed the comity factors and concluded that the district court had not abused its discretion in granting dismissal based on comity; the district court carefully considered each of the factors, concluding that the “landscape of this litigation has changed significantly since November of 2011, when the Court ruled on the first motion to dismiss.” Because there was no abuse of discretion, the dismissal was affirmed.

Travelers v. Flexsteel demonstrates that parties litigating in multiple forums should periodically examine their cases and determine if during the litigation the “landscape” has changed, such that dismissal based on comity may be possible. For further information on Travelers v. Flexsteel or other information regarding Iowa civil procedure, contact Mollie Pawlosky.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

 

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