The opinion of the court was delivered by: Hughes, U.S.M.J.
This matter has come before the Court upon Motion by Plaintiffs Glenbrook Estates, et al. ("Plaintiffs") to stay the Declaratory Judgment action in federal court pending the resolution of the underlying state law action [dkt. entry no. 40], returnable November 19, 2007. A conference call between the parties was held on September 27, 2007, where the Court recommended that the parties consider an administrative dismissal of this action. Although this option was amenable to Plaintiffs, ultimately, the parties could not agree. This Motion followed. For the reasons stated herein, Plaintiffs' Motion to stay the Declaratory Judgment action is granted.*fn1
Plaintiff Glenbrook Estates, Inc. was the builder and developer of a condominium complex known as Glenbrook Estates. The individual plaintiffs are shareholders in Glenbrook Estates, Inc. Construction was completed on Glenbrook Estates in 1998, and a sufficient number of individuals purchased units in the complex for the developer to turn over control to the condominium association by late 2001.
In late 2005, a lawsuit was commenced by the Glenbrook Condominium Association, Inc. against the Plaintiffs and all contractors and subcontractors who were believed to have worked on the development, seeking recovery for, among other things, alleged defective construction in the common elements of the community. That action is captioned as Glenbrook Condominium Association, Inc. v. Glenbrook Estates, et al., Docket Number MON-L-1924-05 ("the state case") in the Superior Court of New Jersey.*fn2
Defendant shareholders Daniel Werbler and Jack Werbler, as well as former officers of Glenbrook, Leonard Fellen, Edith Watstein, and Barbara Feldman were served with a Summons and Complaint in the underlying action in September 2005. In October 2005, the then-law firm of Defendants in the state case demanded that Employers Insurance of Wausau ("Wausau") assume the defense and indemnity of Daniel Werbler, Jack Werbler, Leonard Fellen, Edith Watstein, and Barbara Feldman. Wausau agreed to defend those parties in the state case under a reservation of rights.*fn3
Around August 2006, however, Wausau refused to provide a defense for Joseph Wilf, Leonard Wilf, and Zygmunt Wilf after they were named as defendants in Plaintiff's Amended Complaint in the state case.
The state case has been proceeding since around November 2005 in the Superior Court of New Jersey. Discovery has involved over twenty (20) parties and eleven (11) different law firms. A discovery master has been appointed by the state court. There are an estimated tens of thousands of pages of documents with additional documents being sought. In addition, expert testimony must still be obtained and there are many more fact witness depositions to occur.
On December 19, 2006, the Plaintiffs commenced this action in the Superior Court of New Jersey seeking a declaratory judgment that Wausau was obligated to provide a defense and indemnification in the state case for Joseph Wilf, Leonard Wilf, and Zygmunt Wilf. The Plaintiffs intended to move to consolidate this Declaratory Judgment action with the underlying action in the Superior Court of New Jersey; however, on February 13, 2007, Wausau, defendant in this action, removed the case to federal court pursuant to 28 U.S.C. § 1332.
Plaintiffs argue that if a stay in not granted then the Court is wasting judicial resources, clients' funds, and encroaching ...