The following excerpt is from Mapfre Ins. Co. v. Ruiz, No. 1:18-cv-00047-DAD-EPG (E.D. Cal. 2018):
Here, this coverage action will not resolve the underlying liability action and there is, at most, merely the potential for overlap between the factual issues to be addressed in the two cases. Additionally, it is unlikely that this coverage dispute was commenced for the purposes of obtaining a res judicata advantage, as there is no obvious overlap between the issues, and plaintiff in this case is not a party to the underlying action. Moreover, as discussed above, there is a low risk for federal-state court entanglement because any factual overlap between the actions is currently hypothetical. Of course, this declaratory relief action would clarify the legal relationship between the parties to it. Finally, as to the convenience of the parties, proceeding here will require the insureds to simultaneously defend two actions, but "being required to defend a suit, without more, does not constitute a clear case of hardship or inequity to justify a stay." Hanover, 2016 WL 3443387, at *5 (citing Lockyer v. Mirant Corp., 398 F.3d 1098, 1112 (9th Cir. 2005)). Moreover, granting a stay of this action pending trial in the state court action may require plaintiff to provide a defense where coverage is not called for under the insurance policy it provided. Taken as a whole, consideration of these secondary factors (see Dizol, 133 F.3d at 1225, n.5) also do not weigh in favor of the granting of a stay.
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For the reasons set forth above:
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