HAWTHORNE SAVINGS F.S.B v. RELIANCE INSURANCE COMPANY OF ILLINOIS, Defendant-Appellant. Hawthorne Savings F.S.B.; Hawthorne Financial Corporation, Plaintiffs-Appellees,

Opinion of the United States Court of Appeals, Ninth Circuit.


Hawthorne Savings, F.S.B. ("Hawthorne") sued the Reliance Insurance Company of Illinois ("Reliance-Illinois") in California state court, alleging various California state-law contract-based claims. Reliance-Illinois removed the suit to federal court on the basis of diversity. Shortly thereafter, Reliance was placed in rehabilitation proceedings, and later in liquidation proceedings, in the Commonwealth Court of Pennsylvania.

The district court proceeded with this suit. The jury entered a verdict in Hawthorne's favor and awarded $950,000 in damages. Reliance now appeals the final judgment. Reliance's principal argument is that the district court erred in continuing to exercise jurisdiction over Hawthorne's suit once the rehabilitation proceedings began, because (1) it lacked jurisdiction or (2) various abstention and comity-based doctrines required the court to stay its hand. In addition, Reliance challenges the district court's order requiring it to post a $1.1 million litigation bond, and contests one of the jury instructions used at trial. For the reasons that follow, we affirm on all claims in No. 03-55548 and dismiss No. 03-55611 for failure to prosecute.

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Reference Info:Decision | Federal, 9th Circuit, California | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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