United States District Court, D. South Dakota, Southern Division
For National Music Museum: America's Shrine to Music, Plaintiff: Mitchell A. Peterson, LEAD ATTORNEY, Davenport, Evans, Hurwitz & Smith, Sioux Falls, SD.
For Larry Moss, Defendant: Randall J. Fishman, Richard S. Townley, LEAD ATTORNEYS, PRO HAC VICE, Ballin, Ballin & Fishman, P.C., Memphis, TN; Ronald A. Parsons, Jr., LEAD ATTORNEY, Johnson, Heidepriem & Abdallah, LLP, Sioux Falls, SD.
ORDER DENYING MOTION TO STAY
KAREN E. SCHREIER, UNITED STATES DISTRICT JUDGE.
Defendant, Larry Moss, moves the court to stay this action pursuant to the Colorado River abstention doctrine. Plaintiff, National Music Museum: America's Shrine to Music (NMM), opposes the motion. For the following reasons, the motion to stay is denied.
NMM is a South Dakota nonprofit corporation located in Vermillion, South Dakota. Defendant Robert Johnson is a Tennessee resident who collects rock music instruments and other collectibles. Moss, also a Tennessee resident, is also engaged in the business of rock collectibles.
On February 12, 2008, Moss and Johnson executed an agreement whereby Johnson would convey four guitars to Moss in exchange for $120,000. Docket 13-1 at 13-14. Moss tendered a $70,000 down payment upon delivery of two guitars, with the balance of $50,000 payable on receipt of the remaining two guitars. Id. One of the guitars not initially delivered was a Martin D-35 guitar formerly owned by Elvis Presley (the Elvis guitar). On February 6, 2013, Johnson donated the Elvis guitar to NMM pursuant to a sales-donation agreement. Docket 5-1.
Moss sent an email to NMM on December 10, 2013, in which he claimed that he had purchased the Elvis guitar from Johnson and that Johnson had no right to transfer the Elvis guitar to NMM. Docket 13-1 at 18-19. Moss sent another email, dated January 16, 2014, requesting that NMM retain the Elvis guitar until its ownership could be resolved. Id. at 18.
Johnson filed suit against Moss in Tennessee state court on January 27, 2014,
claiming damages for libel and defamation. Docket 13-1 at 1-3. Moss filed a counterclaim seeking specific performance, damages for breach of warranty relating to the National Steel guitar, breach of contract for nondelivery of the two undelivered guitars including the Elvis guitar, and fraud based on Johnson's representations about both his ability to convey all four guitars and the provenance of the National Steel guitar. Id. at 4-12.
On July 7, 2014, NMM filed suit in circuit court in Clay County, South Dakota, requesting a declaratory judgment with respect to the ownership of the Elvis guitar, alternatively seeking damages against Johnson, and asserting that the doctrines of estoppel, waiver, and assumption of the risk bar Moss's claim to ownership of the Elvis guitar. Docket 1-1. Moss subsequently removed NMM's action to this court based on this court's diversity jurisdiction. Docket 1. Following removal, Moss answered the complaint and moved the court to stay this proceeding pending a determination in Tennessee state court of the respective rights of Moss and Johnson to the Elvis guitar. Docket 13. Johnson has yet to appear before this court in this matter.
In Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the Supreme Court addressed " principles . . . which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts." Id. at 817. " These principles rest on consideration of '[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" Id. (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183, 72 S.Ct. 219, 96 L.Ed. 200, 1952 Dec. Comm'r Pat. 407 (1952)). Although federal courts have a " virtually unflagging obligation . . . to exercise the jurisdiction given them," exceptional circumstances permit a federal court to abstain from exercising jurisdiction when a concurrent state-court action is also pending. Id. at 817-18.
To determine whether exceptional circumstances exist, a court should evaluate the following factors:
(1) whether there is a res over which one court has established jurisdiction, (2) the inconvenience of the federal forum, (3) whether maintaining separate actions may result in piecemeal litigation, unless the relevant law would require piecemeal litigation and the federal court issue is easily severed, (4) which case has priority-- not necessarily which case was filed first but a greater emphasis on the relative progress made in the cases, (5) whether state or federal law controls, especially favoring the ...