STIPULATION AND ORDER TO SEVER DEFENDANT PATRIOT NATIONAL, INC.

MORRISON C. ENGLAND, JR., District Judge.

On June 30, 2017, Plaintiffs Karen Rigsby, as Trustee of the Marsh Revocable Trust of 2003 and Donald P. Steinmeyer ("Plaintiffs") filed this action for Breach of Contract against Defendant Intercare Specialty Risk Insurance Services, Inc., and its successor-in-interest ISR Holdings, Inc. ("ISR"); Alter Ego Liability against Defendants ISR and Kevin Hamm ("Hamm"); Intentional Interference of Contract against Defendant Patriot National, Inc. ("Patriot"); and Fraudulent Conveyance against Defendants Patriot and Phoenix Risk Management, Inc. ("Phoenix").

On September 21, 2017, ISR filed a Cross-Complaint against Plaintiffs. Patriot is not named as a Cross-Defendant in the Cross-Complaint.

On January 30, 2018, Patriot filed for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the District of Delaware ("the Bankruptcy Petition"). The bankruptcy matter is entitled In re Patriot National, Inc., Case No. 18-10189.

On February 5, 2018, Patriot filed a Suggestion of Bankruptcy of Defendant Patriot National, Inc. noticing a stay on prosecution of the action against Patriot pursuant to Bankruptcy Code § 362(a).

The parties in this action agree and stipulate as follows:

1. Good cause exists to sever the action as to Patriot pursuant to Fed. R. Civ. Proc. 21.

2. A stay of the action due to Patriot's Bankruptcy Petition will cause indefinite delay of the action and prejudice Plaintiffs if Plaintiffs are not permitted to proceed with their claims against the three solvent defendants, ISR, Hamm, and Phoenix.

3. Severing Patriot from the action will promote the expeditious resolution of this litigation.

4. Patriot is not an indispensable party to this litigation because:

a. This action primarily arises out of a contract between Plaintiffs and ISR. Patriot is a third party to that contract.

b. Plaintiffs' claim of Intentional Interference of Contract is stated solely against Patriot and involves different issues of fact and law from Plaintiffs' other claims.

c. Plaintiffs allege that Patriot and Phoenix are joint tortfeasors with respect to Plaintiffs' claim of fraudulent conveyance. Joint tortfeasors are not indispensable parties under federal law. (In re Related Asbestos Cases, 23 B.R. 523, 530 (N.D. Cal. 1982); Symantec Corp. v. Logical Plus, Inc., 2009 U.S. Dist. LEXIS 86340, at * 4 (N.D. Cal. 2009).)

Therefore, the parties agree and stipulate that the action shall be severed as follows:

Plaintiffs' claims for Intentional Interference of Contract and Fraudulent Conveyance against Patriot shall be severed from the action and shall proceed as a discrete, independent action. The severed action against Patriot shall be stayed pursuant to Bankruptcy Code § 362(a).

Plaintiffs' claims for Breach of Contract against ISR, Alter Ego Liability against ISR and Hamm, and Fraudulent Conveyance against Phoenix and ISR's cross-claims shall proceed and shall not be stayed by Patriot's Bankruptcy Petition.

Good cause appearing, IT IS SO ORDERED.