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Bituminous Casualty Corp. v. Kinzer Drilling Co.

United States District Court, E.D. Kentucky, Central Division, Lexington

November 4, 2014

BITUMINOUS CASUALTY CORP., Plaintiffs,
v.
KINZER DRILLING COMPANY, et al., Defendants.

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is pending for consideration of Defendants Kinzer Drilling Company, LLC ("Kinzer") and Howell Property, LLC's ("Howell") motion to dismiss. [Record No. 19] Their motion was joined by Defendants Sheila Martin, Jennifer Calhoun, Lowell Calhoun, Betty Calhoun, Myra Calhoun, and Rory Calhoun (the "Calhoun Heirs"). [Record No. 20] For the reasons discussed below, the defendants' motion will be granted.

I.

On February 11, 2009, the Calhoun Heirs filed a lawsuit in Breathitt Circuit Court against Kinzer and Howell, alleging that mining activities on Howell's land resulted in an encroachment upon and removal of coal from their adjoining property. [Record No. 1-3, p. 3] The state court complaint included inter alia claims for trespass, conversion, and ejectment. The plainitffs also sought a declaratory judgment to quiet title. [ Id., p. 4-7] At all relevant times, Kinzer and Howell were insured by Bituminous Casualty Corporation ("Bituminous"), the plaintiff in this action. According to the defendants, Bituminous has also provided a defense for Kinzer and Howell in the underlying action. [Record No. 19-1] Bituminous brings this suit to obtain a judgment declaring that it owes no duty to provide insurance coverage or a defense to the defendants. [Record No. 1]

II.

The defendants ask this Court to decline jurisdiction and dismiss this action. [Record Nos. 19, 20] This case meets the basic standard for diversity jurisdiction under 28 U.S.C. § 1332. However, even when a suit otherwise satisfies subject matter prerequisites, district courts retain discretion to determine "whether and when to entertain an action under the Declaratory Judgment Act." Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995); see Aetna Cas. & Sur. Co. v. Sunshine Corp., 74 F.3d 685, 687 (6th Cir. 1996). The Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. (the "Act"), provides that "any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). The Supreme Court has explained that the Act "confers discretion on courts, not rights on litigants." Am. Home Assurance Co. v. Evans, 791 F.2d 61, 64 (6th Cir. 1986) (citing Green v. Mansour, 474 U.S. 64 (1985)).

The Sixth Circuit has identified five factors to guide adistrict courts in determining whether to exercise discretionary jurisdiction under the Act. Grand Trunk Western Railroad Co. v. Consolidated Rail Corp., 746 F.2d 323 (6th Cir. 1984). Those factors are whether:

1. the declaratory action would settle the controversy;
2. the declaratory action would serve a useful purpose in clarifying the legal relations in issue;
3. the declaratory remedy is being used merely for the purpose of procedural fencing' or to provide an arena for a race for res judicata';
4. the use of a declaratory action would increase friction between our federal and state courts and improperly encroach on state jurisdiction; and
5. there is an alternative remedy which is better or more effective.

AmSouth Bank v. Dale, 386 F.3d 763, 785 (6th Cir. 2004) (citing Grand Trunk, 746 F.2d at 326). This list is not exhaustive; therefore, "a full inquiry [must be made] into all relevant considerations." Brotherhood Mut. Ins. Co. v. United ...


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