This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A05-486

 

St. Paul Mercury Insurance Company, et al.,

Respondents,

 

vs.

 

 Northern States Power Company d/b/a Xcel Energy, Inc.,

Defendant,

 

 Fidelity and Casualty Company of New York,

Respondent,

 

The Home Insurance Company,

Respondent,

 

and

 

 Fidelity and Casualty Company of New York,

third party plaintiff, Respondent,

 

vs.

 

Admiral Insurance Company, et al., Allstate Insurance Company solely as

successor-in-interest to Northbrook Excess & Surplus Insurance Company f/k/a Northbrook Insurance Company, Associated Electric & Gas Insurance Services

Limited, American Reinsurance Company, et al., Central National Insurance Company

of Omaha, et al., Fireman’s Fund Insurance Company, First State Insurance Company,

et al., Gilbraltar Casualty Company n/k/a Mt. McKinley Insurance Company, Globe

Indemnity Company, Highlands Insurance Company, TIG as successor by merger to International Surplus Lines Insurance Company, et al., Lexington Insurance Company,

et al., Britamco Ltd., et al., Compagnie D’Assurances Maritimes Aeriennes Et Terrestres,

The Dominion Insurance Co., Ltd., Eisen Und Stahl Ruckversicherung A. G., Hollandshe

Vers Van 1808 N. V., Companhia De Seguros Imperio S. A., Allianz International

Insurance Co., Ltd., Royale Belge Incendie Reassurance S. A. D’Assurances, The

Sumitomo Marine and Fire Insurance Co., Ltd., Turegum Insurance Co., Ltd.,

Unionamerical Insurance Co., Ltd., La Union Atlantique S. A., Continental Reinsurance

Management Ltd., St. Katherine Insurance Co., PLC, Wintetthur Swiss Insurance Co.,

Compagnie Europeenne D’Assurances Industrielles S. A., La Agricola Sa De Seguros Y

Reaseguros, Belge Industrielle A. N. M., Eurinco Allgerneine Versicherungs

Aktiengesellschaft, Hafez Insurance Co., PLAR Pool, Midland Insurance Company,

Old Republic Insurance Company, The Phoenix Insurance Company, Puritan

Insurance Company, TIG Insurance Company, et al.,

third party defendants, Respondents,

 

 Northern States Power Wisconsin d/b/a Xcel Energy, Inc.,

third party defendant, Appellant,

 

 Lake Superior District Power Co., d/b/a Xcel Energy, Inc.,

third party defendant,

 

and

 

 Associated Electric & Gas Insurance Services Limited, Ranger

Insurance Company, et al.,

third party plaintiffs, Respondents,

 

 vs.

 

Columbia Casualty Company, et al.,

third party defendants, Respondents,

 

 Northern States Power Wisconsin d/b/a Xcel Energy, Inc.,

third party defendant, Appellant,

 

 Lake Superior District Power Co. d/b/a Xcel Energy, Inc.,

third party defendant.

 

Filed December 27, 2005

Affirmed

Toussaint, Chief Judge

 

Hennepin County District Court

File No. CT 03-017809

 

Larry D. Espel, Jeanette M. Bazis, H. Allen Blair, III, Greene Espel, P.L.L.P., 200 South Sixth Street, Suite 1200, Minneapolis, MN  55402 (for appellant Northern States Power Company) 

 

Alan Rutkin (pro hac vice), Rivkin Radler, L.L.P., 926 EAB Plaza, Uniondale, NY  11556-0111; and

 

John M. Anderson, Carrie L. Hund, Bassford Remele, P.A., 33 South Sixth Street, Suite 3800, Minneapolis, MN  55402-3707 (for respondent Associated Electric & Gas Insurance Services Limited)

 

Charles E. Spevacek, Amy J. Woodworth, Meagher & Geer, P.L.L.P., 33 South Sixth Street, Suite 4200, Minneapolis, MN  55402 (for respondent St. Paul Fire and Marine Insurance Company, et. al)

 

Micahel S. Kreidler, Louise A. Behrendt, Stich Angel Kreidler & Dodge, P.A., The Crossings, Suite 120, 250 Second Avenue South, Minneapolis, MN  55401 (for respondent Globe Indemnity Company)

 

Thomas D. Jensen, Christopher Dalki, Lind, Jensen, Sullivan & Peterson, P.A., 150 South Fifth Street, Suite 1700, Minneapolis, MN  55402 (for respondent Fidelity and Casualty Company of New York, et. al)

 

Webster Hart, Jay Heit, Herrick & Hart, S.C., 116 West Grand Avenue, P.O. Box 167, Eau Claire, WI  54701-0167 (for respondent Admiral Insurance Company, et. al)

 

James F. Mewborn, 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN  55402 (for respondent American Reinsurance Corporation, et. al)

 

Jerome B. Abrams, Abrams & Smith, P.A., 12th Floor Pillsbury Center South, 220 South Sixth Street, Minneapolis, MN  55402 (for respondent London Market Insurers, et. al)

 

Robert McCollum, Cynthia Thurston, McCollum, Crowley, Moschet, & Miller, Ltd., 7900 Xerxes Avenue South, Suite 1300, Bloomington, MN  55431 (for respondent Old Republic Insurance Company)

 

Thomas Harder, Foley & Mansfield, 250 Marquette Avenue, Suite 1200, Minneapolis, MN  55401 (for respondent AIG Companies, et. al)

 

John Childs, Sonnenschein Nath & Rosenthal L.L.P, 520 Marquette Avenue, Suite 900, Minneapolis, MN  55402 (for respondent Phoenix Insurance Company)

 

Duana Joan Grage, Hinshaw & Clubertson, L.L.P., 3100 Campbell Mithun Tower, 222 South Ninth Street, Minneapolis, MN  55402 (for respondent Fireman’s Fund Insurance Company)

 

Jason Marcus Hill, Johnson & Lindberg, P.A., 7900 International Drive, Suite 960, Minneapolis, MN  55425-1582 (for respondent Gilbraltar Casualty Company, et. al)

 

Richard Mahoney, Mahoney, Dougherty & Mahoney, 801 Park Avenue, Minneapolis, MN  55404 (for respondent Allstate Insurance Company, et. al)

 

Donald C. Mark Jr., Kerry Middleton, Fafinski Mark & Johnson, P.A., 775 Prairie Center Drive, Suite 400, Eden Prairie, MN  55344 (for respondent First State Insurance Company, et. al)

 

William Moeller, Blethen, Gage & Krause, 127 South Second Street, P.O. Box 3049, Mankato, MN  56002-3049 (for respondent Puritan Insurance Company)

 

Scott M. Rusert, 2900 Lincoln Centre, 333 South Seventh Street, Minneapolis, MN  55402 (for respondent Compagnie Europeene D’Assurances Industrielles, SA)

 

Paul Ratelle, Michael Rosow, Fabyanske, Westra & Hart, P.A., 800 LaSalle Avenue, Suite 1900, Minneapolis, MN  55402 (for respondent Central National Insurance Company of Omaha, et. al)

            Considered and decided by Toussaint, Chief Judge, Peterson, Judge, and Dietzen, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            This case involves contaminated properties in Wisconsin for which appellant Northern States Power Company was seeking insurance coverage for the costs of clean-up.  The day before a settlement meeting was to convene, two of the insurers, respondents St. Paul Mercury Insurance Company and St. Paul Fire and Marine Insurance Company (collectively “St. Paul”) filed suit in Minnesota.  Several weeks later, appellant commenced a declaratory relief action for indemnification in Wisconsin.  The third-party defendant Associated Electric & Gas Insurance Limited (AEGIS) moved for an injunction to prohibit appellant from continuing the duplicative action filed in Wisconsin, and under the first-filed rule, the district court enjoined appellant from pursing its action in Wisconsin pending resolution of the Minnesota case.  Appellant argues (a) the court should not have applied the first-filed rule, which should not apply to preemptive declaratory judgment actions such as this one; and (b) the court relied on the wrong jurisdictional and equitable principles and failed to address the Dahlberg factors.  We affirm.

D E C I S I O N

            The decision whether to grant a temporary injunction is left to the district court’s discretion and will be upheld on review absent a clear abuse of that discretion.  Carl Bolander & Sons v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn. 1993).  An abuse of discretion occurs when the court disregards “either the facts or the applicable principles of equity.”  Cramond v. AFL-CIO, 267 Minn. 229, 234, 126 N.W.2d 252, 257 (1964).  On appeal from an order granting a temporary injunction, this court views the facts in the light most favorable to the prevailing party.  Queen City Const., Inc. v. City of Rochester, 604 N.W.2d 368, 372 (Minn. App. 1999), review denied (Minn. Mar. 14, 2000).

I.

            Appellant argues that in granting the anti-suit injunction, the district court erred by mechanically applying the “first-filed” rule.  Specifically, appellant argues that the court failed to recognize that: (1) the first-filed rule does not apply to preemptive declaratory judgment actions filed to win the race to the courthouse; and (2) the Wisconsin action named all of the parties needed to render a complete resolution to this dispute long before the Minnesota action was amended to name all of the parties. 

            A.         First-filed rule

            The first-filed rule provides that when two courts have concurrent jurisdiction, the first to acquire jurisdiction generally has priority to decide the case.  Minnesota Mut. Life Ins. v. Anderson, 410 N.W.2d 80, 82 (Minn. App. 1987).  This rule “is not intended to be rigid, mechanical, or inflexible, but should be applied in a manner serving sound judicial administration.”  Id. (quoting Orthmann v. Apple River Campground, Inc., 765 F.2d 119, 121 (8th Cir. 1985)).  The first-filed rule is not truly a rule at all, but a principle, a “blend of courtesy and expediency.”  Gavle v. Little Six, Inc., 555 N.W.2d 284, 291 (Minn. 1996) (quotation omitted).

            “In deciding whether to defer to another court, a district court considers judicial economy, comity between courts, and the cost to and the convenience of the litigants. . . .”  Medtronic, Inc., v. Advanced Bionics Corp., 630 N.W.2d, 438, 449 (Minn. App. 2001); see First State Ins. Co. v. Minn. Mining & Mfg. Co., 535 N.W.2d 684, 688 (Minn. App. 1995) (stating that in considering the first-filed status in conjunction with other equitable factors, Minnesota courts have long held that the rule recognizes the importance of comity, while permitting the district courts discretion in granting anti-suit injunctions), review denied (Minn. Oct. 18, 1995); see also Anderson, 410 N.W.2d at 82 (stating that when two actions in courts of concurrent jurisdiction are substantially similar, comity requires that “the court which first acquires jurisdiction, . . . retains its jurisdiction”).  The court must also “assess the possibility of multiple determinations of the same dispute.”  Medtronic, 630 N.W.2d at 449.

            Appellant argues that by mechanically applying the first-filed rule, the district court erred by failing to recognize that the first-filed rule has no application in cases like this one, where a movant filed the first action in a precipitous race to the courthouse in order to secure what it perceives to be a favorable forum.  We disagree.  The district court did not grant the anti-suit injunction solely on the basis that St. Paul was the first to file suit.  Rather, the court considered St. Paul’s first-to-file status along with other equitable factors.  See Medtronic, 630 N.W.2d at 449 (setting forth factors in addition to order of filing suit a court must consider when deciding whether to defer to another court).  The court weighed the equitable factors and found that “[b]ecause the parties are the same and the issues are the same, the capacity of the Minnesota court to resolve one of the actions would, therefore, dispose of the other action.”  The court also found that “it would be a waste of judicial resources, time, and money for both actions to continue in the Wisconsin and Minnesota courts, respectively.”  The court further reasoned that the adverse effect of inconsistent adjudications leaving issues unresolved and the need to achieve economy, clarity, practicality, and a reasonably expeditious resolution of all issues weighed in favor of granting the anti-suit injunction.

            Appellant further argues that the facts and circumstances of the case demonstrate that St. Paul was forum shopping, which lends support to its argument that the district court’s mechanical application of the first-filed rule is inappropriate.  Appellant asserts that the day before the scheduled settlement conference, St. Paul “ambushed” appellant by filing suit in Minnesota, thereby potentially depriving appellant, as the “natural plaintiff,” of the opportunity to recover remediation costs.  In support of its claim that St. Paul was “obviously” forum shopping, appellant points to the district court’s order staying the anti-suit injunction pending this appeal in which the court indicated that it agreed with appellant that St. Paul’s actions were “a textbook example of a premature tactical bolt to the courthouse.”[1]  Thus, appellant argues that the district court erred in its application of the first-filed rule.

            The fact that St. Paul filed suit in Minnesota the day before a scheduled settlement conference is not, in and of itself, evidence that the district court abused its discretion.  St. Paul is a Minnesota company and there are abundant Minnesota connections in this dispute.  Moreover, the Minnesota Supreme Court has encouraged insurers to promptly bring declaratory-judgment actions to resolve coverage disputes. See, e.g., Jostens, Inc. v. Mission Ins. Co., 387 N.W.2d 161, 166-67 (Minn. 1986); Grain Dealers Mut. Ins. Co. v. Cady, 318 N.W.2d 247, 249 n.3 (Minn. 1982).  Therefore, St. Paul had every right to bring this action in Minnesota to resolve the coverage dispute. 

            Also, we decline to give any weight to the subsequent order staying the anti-suit injunction.  Appellant’s motion to stay the anti-suit injunction was heard after appellant filed this appeal, and, therefore, the order is not part of the district court record.[2]  See Minn. R. Civ. App. P. 110.01 (defining the record on appeal as “[t]he papers filed in the trial court, the exhibits, and the transcript of the proceedings”).  As stated above, the district court weighed the equitable factors in conjunction with the first-filed rule and concluded that an anti-suit injunction was the proper course of action.  The record amply supports the district court’s conclusion.  Accordingly, the district court properly analyzed the first-filed rule.

            B.         Named parties

            Appellant also contends that the district court’s mechanical application of the first-filed rule was inappropriate because when St. Paul filed its declaratory judgment action in Minnesota, it neglected to name the correct insured and failed to name any of appellant’s 30-plus insurers. 

            In Doerr v. Warner, two necessary parties were not added to a first-filed Minnesota action until ten months after a competing Nevada action had been commenced.  247 Minn. 98, 102, 76 N.W.2d 505, 510 (1956).  The district court stated that “the joinder of all indispensable parties is not a prerequisite to the acquirement of jurisdiction by the court over the subject matter of an action and that the court acquires such jurisdiction the moment the action is commenced despite the fact that an indispensable party has been omitted.”  Id. at 105, 76 N.W.2d at 512.  The court went on to state that “the court first obtaining jurisdiction of the subject matter and of the parties may properly restrain one of the parties from proceeding in another state.”  Id. at 108, 76 N.W.2d at 513.  The court held that because the Minnesota district court was the first to acquire jurisdiction over the action, the injunction enjoining prosecution of the subsequently filed Nevada action was proper.  Id. at 110, 76 N.W.2d at 514.

            Here, the record shows that St. Paul originally brought this declaratory-judgment action against NSP-Minnesota.  Shortly thereafter, St. Paul filed a second amended complaint naming appellant.  But despite St. Paul’s failure to name all the necessary parties at the time it filed its action, by February 2004, the parties to the Minnesota action were identical to the parties in the Wisconsin action.  Appellant has conceded that the Minnesota action and the Wisconsin action are equally comprehensive.  Accordingly, the district court properly applied the first-filed rule in granting the anti-suit injunction.

II.

            Appellant argues that the anti-suit injunction was improperly granted because the district court relied on the wrong legal standard in granting the injunction.

            It has long been the law in Minnesota that a court may enjoin a party over whom it has in personam jurisdiction from pursuing similar litigation in another court.  Doerr, 247 Minn. at 108, 76 N.W.2d at 513; Freick v. Hinkly, 122 Minn. 24, 26, 141 N.W. 1096, 1096 (1913); see Hawkins v. Ireland, 64 Minn. 339, 344, 67 N.W. 73, 75 (1896) (stating that Minnesota courts may restrain the state’s own citizens from pursuing actions in other state courts and foreign jurisdictions “whenever the facts of the case make such restraint necessary to enable the court to do justice, and prevent one citizen from obtaining an inequitable advantage over other citizens”);.  In analyzing the propriety of anti-suit injunctions, this court has applied a three-part test.  First State Ins. Co., 535 N.W.2d at 687.  The factors to be considered under this test are:  (1) the similarity of the parties; (2) the similarity of the issues; and (3) the capacity of the first suit to dispose of the second suit.  Id.

            Here, the district court applied the three-part test in making its decision.  First, the court found that the parties to the Minnesota action were the same as the parties to the Wisconsin action.  The district court also found that appellant conceded that the parties to the two actions were similar.  Second, the district court found that the issues were similar because both suits sought to determine the rights and obligations of appellant’s insurers under the various insurance policies.  Third, the district court found that resolution of the Minnesota action would effectively dispose of the Wisconsin action under the principles of res judicata.  Based on the three factors and the district court’s consideration of other equitable factors, the court granted the anti-suit injunction. 

            Appellant contends that even though the district court properly considered the three factors, the court erred by excluding any analysis of whether the injunction was appropriate.  Appellant contends that in considering whether to grant the injunction, the district court should have analyzed (1) whether the anti-suit injunction was necessary to protect its jurisdiction; and (2) whether any equitable principles required the court to grant the injunction.

            A.         Threat to jurisdiction

            Appellant argues that in order for a district court to properly grant an anti-suit injunction, the court must specifically find that the injunction is necessary to protect its jurisdiction.  We disagree.  In First State Ins. Co., liability insurers brought a declaratory judgment action in Minnesota against the insured to determine coverage for the underlying breast implant lawsuits.  535 N.W.2d at 686.  While the Minnesota action was pending, insured brought a parallel out-of-state suit.  Id.  The district court temporarily enjoined insured from pursuing the out-of-state action, and the insured appealed.  Id. at 687.  This court held that the insurers were entitled to the injunction under the three-part substantial-similarity test.  Id. at 687-88 (stating that the district court properly applied each part of the substantial-similarity test in granting the injunction).  Notably, in concluding that the insurers were entitled to the injunction, there was no discussion as to whether the injunction was necessary to protect its jurisdiction.  See generally First State Ins. Co. v. Minn. Mining and Mfg. Co., 535 N.W.2d 684 (Minn. App. 1995). Consequently, the holding in First State Ins. Co. demonstrates that a finding that an anti-suit injunction is necessary to protect a court’s jurisdiction is not essential to the court’s analysis.[3]

            B.         Equitable principles

            Appellant also contends that the district court erred in failing to analyze whether any equitable principles required it to grant the anti-suit injunction.  In support of its claim, appellant cites First State Ins. Co., in which the court stated that “[i]n considering the first-filed status in conjunction with other equitable factors, Minnesota courts have long held that the rule recognizes the importance of comity, while permitting the courts discretion in granting anti-suit injunctions.”  535 N.W.2d at 688 (alteration in original).  Appellant asserts that the fact that the court in First State Ins. Co. upheld the injunction only after finding that “the Minnesota action [was] more comprehensive,” demonstrates that a court must consider equitable principles before it grants an anti-suit injunction.  See id. at 688.

            Appellant’s argument misconstrues the court’s holding in First State Ins. Co.  The court’s conclusion that “the Minnesota action [was] more comprehensive” is found in the discussion pertaining to the third factor of the substantial similarities test.  Id.  The conclusion did not relate to equitable principles outside of the substantial similarities test, as claimed by appellant.  Moreover, the First State Ins. Co. court’s reference to equitable principles that should be considered was included in the court’s analysis of the first-filed rule.  Id.  There is no statement in First State Ins. Co. that once the three-part substantial similarities test has been met, a court is then required to consider any other equitable principles.  In fact, the court in First State Ins. Co. specifically found insured’s argument that “the substantial similarity analysis is only the first step in determining the propriety of granting an anti-suit injunction and that the district court failed to make additional findings on the equities of the case,” to be without merit.  See id. (stating that the district court did not err by not specifically addressing additional factors).    

            Nevertheless, even if we were to conclude that a court is required to consider equitable principles after the substantial similarities test has been met, the district court here considered the equitable principles in analyzing the first-filed rule.  See id. (stating that, although unnecessary, the district court specifically commented on the equitable issues involved in the case).  A review of the district court’s order shows that after analyzing and concluding that the three-part test had been satisfied, the court went on to address the equitable principles.  As stated above, the district court found that the equitable principles justified the anti-suit injunction.   

            Appellant argues that the district court’s failure to consider the traditional Dahlberg factors is further evidence that the court neglected to consider other equitable principles.  See Dahlberg Bros., Inc. v. Ford Motor Co., 272 Minn. 264, 137 N.W.2d 314 (1965).[4]  But the court in First State Ins. Co. clearly stated that “[i]t should be noted that Minnesota courts have not applied the traditional injunction factors to decisions on anti-suit injunctions and thus the district court did not err by not specifically addressing the Dahlberg factors.”  535 N.W.2d at 688.  Accordingly, a review of the Dahlberg factors here is unnecessary. 

            We conclude that the district court applied the correct legal standard in granting the anti-suit injunction, and appellant has failed to demonstrate that the district court abused its discretion in granting the injunction. 

            Affirmed.