In a recent case, the U.S. District Court for the District of Hawaii determined the insurer's duty to indemnify was unripe for decision because the underlying litigation was still ongoing in state court. See Western World Ins. Co. v. The County of Hawaii, 2008 U.S. Dist. LEXIS 40118 (D. Haw. May 15, 2008).
The Court previously ruled in March that Western World had a duty to defend because there was a possibility of coverage in the underlying state cases. The Court also determined the insurer's duty to indemnify could only be established by the resolution of the issue of liability in the underlying actions.
The insured subsequently filed a Motion for Clarification, essentially arguing the Court should have granted summary judgment on the indemnification issue. The Court disagreed. It was clear that the indemnification issue was not yet ripe. Substantial factual issues needed to be resolved in the underlying actions. A substantive ruling in the coverage case on the indemnification issue would unnecessarily entangle the federal court in an area that was properly being adjudicated in the state court.
Therefore, dismissal without prejudice of Western World's declaratory action on the duty to indemnify was appropriate. Following the resolution of the underlying actions, Western World could re-file its declaratory judgment action on the duty to indemnify should the facts developed in the underlying cases support such a filing.
