MOTION – STAY DISCOVERY PENDING RESOLUTION OF DECLARATORY JUDGMENT ACTION
The motion for partial stay filed by Fidelis Underwriting Limited, Liberty Corporate Capital Limited as sole corporate member of Syndicate 4472 at Lloyd’s for the 2021 year of account, Atrium Underwriters Limited for and on behalf of the 2021 underwriting members of Syndicate 609 at Lloyd’s, Chaucer Corporate Capital (No. 3) Ltd. (UK) as the sole corporate member of Syndicate 1084 at Lloyd’s for the 2021 year of account, and Lancashire Syndicates Limited for and on behalf of the participating 2021 underwriting members of Syndicate 3010 and Syndicate 2010 at Lloyd’s (collectively, the “Moving Defendants”), is DENIED.
Procedural Background
On August 20, 2025, the Moving Defendants filed an action against Willis Lease Finance Corporation (“WLFC”), titled Fidelis Underwriting Limited, et al. v. Willis Lease Finance Corporation, Case No. CV0007356 (the “Declaratory Judgment Action”), alleging that they and WLFC reached an oral agreement to resolve an insurance coverage dispute under a policy severally subscribed by the Moving Defendants to WLFC. The dispute arose out of WLFC’s claim for a 2022 loss of, or to, several aircraft engines located in Russia. The Moving Defendants seek declaratory relief and allege anticipatory breach of the oral agreement. No trial date has been set in the Declaratory Judgment Action, but the parties have recently stated in a joint case management conference statement that a trial in that case would be completed in two days.
Just a few weeks after the Declaratory Judgment Action was filed, on September 3, 2025, WLFC filed the instant action against the Moving Defendants as well as a number of other insurer defendants. WLFC alleges that the insurers are obligated to pay for the loss of three engines under the policy but have refused to do so. WLFC asserts causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing.
Standard
“Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) A court can stay discovery in one action pending resolution of another action. (See Riddell, Inc. v. Superior Court (2017) 14 Cal.App.5th 755, 765-66
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Parties in a civil action are entitled to discover non-privileged, relevant information and a party requesting to limit or stay discovery has the burden of showing good cause for the request. (Code Civ. Proc., §§ 2017.010, 2019.020(b).)
Discussion
The Moving Parties seek an order staying WLFC’s discovery efforts against them in this case pending resolution of the Declaratory Judgment Action. They contend that a stay is warranted because the Declaratory Judgment Action requires substantially less discovery, can be resolved quickly through a bench trial, and a resolution of the Declaratory Judgment Action in favor of the Moving Defendants would negate the need for discovery in this case as to the Moving Defendants. The Moving Defendants state that they have not yet served discovery in this case, but WLFC has propounded overbroad and burdensome requests on them.
WLFC opposes the motion, arguing that the insurer defendants in this case have sat on WLFC’s claim for coverage for over four years and the requested stay would further delay resolution of this claim. While the Declaratory Judgment Action was filed first, it was only by a couple of weeks; the day after WLFC filed this case, the Moving Defendants served WLFC with their Complaint in the Declaratory Judgment Action. WLFC also argues that one of the grounds for the requested stay – that the Declaratory Judgment Action can negate the need for discovery against the Moving Defendants – is based on speculation and the unwarranted presumption that the Moving Defendants will prevail in that action.
WLFC further argues that a stay of discovery as against the Moving Defendants is impractical and helps only the Moving Defendants while simultaneously prejudicing WLFC. By way of example, WLFC notes that with a stay, it may have to engage in fact discovery as to the Moving Defendants at the same time it is engaging in expert discovery as to the other defendants, which is inefficient. Moreover, the trial in the Declaratory Judgment Action will not take place until October 2026 at the earliest, meaning WLFC will deprived of any discovery from the Moving Defendants in this case for over a year of litigation, and the insurers have already delayed payment under the Policy for four years.
With respect to the Moving Defendants’ arguments as to the scope of discovery in this case, WLFC states that its discovery requests are routine insurance coverage requests that have been answered by other defendants, and the propriety of specific requests are not before the Court in any event.
Defendants Global Aerospace Underwriting Managers Limited, Great Lakes Insurance SE, Berkshire Hathaway International Insurance Ltd., Houston Casualty Company, Mapfre Espana, Compania de Seguros y Reaseguros, S.A., Mitsui Sumitomo Insurance Company (Europe) Limited, Swiss Re International SE, Faraday Capital Limited as the sole member and capital provider to Faraday Syndicate 0435 at Lloyd’s, Starr Managing Agents Limited on its own behalf and on behalf of all underwriting members of Lloyd’s Syndicate 1919, Convex Insurance UK Limited, AXIS Specialty Europe SE, and Texas Insurance Company (the “AR Insurers”) have filed a Response to the Moving Defendants’ motion, arguing that a partial stay of discovery as against the Moving Defendants only would prejudice the AR Defendants who would be required to continue participating in discovery with WLFC.
The AR Insurers argue that the Moving Defendants would gain an unfair advantage by using completed deposition transcripts of WLFC’s fact and expert witnesses to tailor their own later examinations to the Moving Defendants’ advantage and the AR Insurers’ disadvantage, and the AR Insurers would be unable to depose the Moving Defendants’ experts before filing summary judgment while the Moving Defendants could later oppose that motion with expert opinions the AR Insurers never had a fair chance to test.
The AR Defendants also argue that the stay would further compress discovery timelines and hamper the parties’ ability to coordinate contemporaneous depositions of key witnesses, or could require two depositions of these witnesses, some of whom are located outside of the United States.
The motion for partial stay is denied. The Court finds the arguments of WLFC and the AR Insurers regarding the impact of the requested stay on the parties and the proceedings to be compelling. The requested stay would unfairly favor one set of defendants and prejudice the other parties remaining in the case. The temporary stay issued at the March 29, 2026 ex parte hearing is dissolved.
All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.
The Zoom appearance information for July, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1605267272?pwd=908CbP6TV2mhCAyai1nzo6lyz2dKaw.1
Meeting ID: 160 526 7272 Passcode: 026935
If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov