United States District Court, D. Colorado
ORDER GRANTING MOTION TO STAY CASE
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant George Allen
Dines's Motion to Dismiss or Stay this case pending the
resolution of related state court proceedings. (Doc. # 36.)
Plaintiff Vail Services Group, LLC objects to the motion.
(Doc. # 40.) For the following reasons, the Court overrules
that objection, grants Defendant's motion, and stays this
asserts only one claim against Defendant-breach of a personal
guarantee. (Doc. # 1.) Plaintiff specifically alleges that
Defendant is liable as the personal guarantor of a contract
between Plaintiff and the Dines Agency, LLC. (Id. at
¶¶ 1, 16-20.) As guarantor, Defendant promised
“to pay and fulfill all obligations of the Dines
Agency, LLC specifically including but not limited to payment
of all obligations under the . . . contract between the Dines
Agency and [Plaintiff].” (Doc. # 1-1.) Plaintiff
contends that Dines Agency failed to pay its debts under the
contract; Plaintiff therefore sought payment from Defendant
as guarantor, and Defendant refused to pay, thereby breaching
the agreement. (Doc. # 1 at ¶ 15.)
prevail on its sole claim of breach against Defendant,
Plaintiff must first establish, among other things, that it
had a valid contract with the Dines Agency-a point which
Defendant vehemently contests. (Doc. # 5 at 5, 12.) Plaintiff
must also establish, as it acknowledges in its Complaint,
that it “performed under the contract between [it] and
the Dines Agency, but the Dines Agency . . . breached the
contract”- other points that Defendant denies. (Doc. ##
1 at ¶ 18; 5 at 9, 12.)
very issues-the existence of a valid underlying contract and
breach-are the subject of litigation in Vail Services
Group, LLC v. Dines Agency LLC, No. 2017-CV-34597,
(Dist. Ct. Denver Cty, Dec. 11, 2017), currently scheduled
for arbitration before Judge Boyd Boland, which is predicted
to occur “by October 1, 2018.” (Doc. # 36-3 at
¶¶ 1, 3.) Because the issues in this case are
dependent on issues being arbitrated, Defendant requests that
this case either be dismissed or stayed pursuant to the
Colorado River doctrine. See Colo. River Water
Conserv. Dist. v. United States, 424 U.S. 800 (1976).
Plaintiff objects to a dismissal or stay of this case,
primarily arguing that the arbitration is non-binding on the
parties and issues in this case; thus, this action should
proceed alongside the arbitration.
the Colorado River doctrine, a federal court may
dismiss or stay federal proceedings when a parallel
proceeding is pending in another forum. See Rienhardt v.
Kelly, 164 F.3d 1296, 1302 (10th Cir. 1999). The
doctrine likewise applies to parallel proceedings subject to
arbitration. THI of New Mexico at Las Cruces, LLC v.
Fox, 727 F.Supp.2d 1195, 1208 (D.N.M. 2010)
applying the Colorado River factors, the Court must
first determine “whether the state and federal
proceedings are parallel.” Allen v. Bd. of Educ.,
Unified Sch. Dist. 436, 68 F.3d 401, 402 (10th
Cir.1995); Fox v. Maulding, 16 F.3d 1079, 1081 (10th
Cir.1994). The “exact identity of parties and issues is
not required. Rather, state and federal proceedings are
sufficiently parallel if ‘substantially the same
parties litigate substantially the same issues.'”
Hamilton v. Emerald Isle Lending Co., No.
10-CV-02713-REB-KMT, 2011 WL 1990568, at *11 (D. Colo. Apr.
6, 2011); Allen, 68 F.3d at 402.
Plaintiff in this lawsuit and the arbitration are identical
(Vail Services Group). Although the defendants are not
identical, for the purposes of applying the Colorado River
doctrine, the Court finds that they are “substantially
the same.” See, e.g., U.S. v. City of Las
Cruces, 289 F.3d 1170, 1182 (10th Cir. 2002)
(“[I]n the Colorado River context ... exact identity of
parties and issues is not required. Rather, state and federal
proceedings are sufficiently parallel if substantially the
same parties litigate substantially the same issues.”)
(internal citations omitted). The Defendant in this case is
alleged to be the guarantor of a contract entered into by one
of the defendants in the arbitration- the Dines Agency.
Indeed, the validity and enforceability of that contract is
the primary subject of the arbitration, and both the
Defendant in this case and the defendants to the arbitration
argue against the validity and enforceability of that
contract. Thus, the Defendant in this case and the
arbitration defendants' interests are entirely congruent.
See, e.g., Lumen Constr., Inc. v. Brant Constr. Co.,
Inc., 780 F.2d 691, 695 (7th Cir. 1985) (where interests
of parties in both suits are congruent, abstention may be
appropriate notwithstanding fact that parties are not
Court also finds that the issues in the proceedings are
substantially similar. Indeed, the sole claim in the instant
case is inseparable from the substantially related issue
being arbitrated-whether the underlying contract between
Plaintiff and the Dines Agency was valid, enforceable, and/
breached. If not, the guarantee holds no weight. If contract
is deemed valid, the guarantee may attach to it. The Court
rejects, as unsupported by any legal authority,
Plaintiff's arguments that the cases are not parallel
because (1) the Defendant in this case did not agree to
arbitration and is not bound by it; and (2) the personal
guarantee is “absent from arbitration.” Plaintiff
is essentially arguing that the existence of different
defendants and claims render the actions not parallel. That
is simply incorrect, and numerous courts have held otherwise.
See, e.g., Int'l Asset Mgmt., Inc. v.
Holt, 487 F.Supp.2d 1274, 1284 (N.D. Okla. 2007)
(finding the state and federal cases parallel because the
sole issue presented in the federal case was also at issue in
the state case regardless of the fact that the state case
involved additional, unrelated claims).
Plaintiff's suggestion that this case is not parallel to
the arbitration because “Plaintiff need not show a
judgment on the breach of . . . contract to establish an
‘obligation' on [Defendant's] part to
pay” is without merit. Plaintiff highlights a
distinction without a difference. True, Plaintiff need not
show a separate “judgment” on the breach, but
Plaintiff nonetheless must show the existence of a valid
contract and a breach of that contract to proceed with its
claims against Defendant in this case. Because the
arbitration is set to adjudicate those very issues, it is
“parallel” to this litigation.