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Qbe Insurance Corporation v. Green

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

December 23, 2014

QBE INSURANCE CORPORATION, Plaintiff,
v.
LARRY GREEN and CLAUDIA GREEN, Defendants.

MEMORANDUM OPINION AND ORDER

JOSEPH M. HOOD, Senior District Judge.

This matter is before the Court upon the motion of the defendants, Larry and Claudia Green, requesting this Court to abstain from exercising jurisdiction in this case. [DE 23]. Plaintiff filed a memorandum in opposition, [DE 30], and Defendants filed a reply. [DE 31]. Fully briefed, this matter is ripe for a decision.

I. Background

This declaratory judgment action stems from a complaint brought by A.H. in state court on June 3, 2014 against the Heritage Place Condominium Association. A.H. alleged damages arising out of a dog bite she received while at the home of her grandparents, Larry and Claudia Green, who own a condo in the Heritage Place complex. On theories of negligence and strict liability, the complaint claims Heritage Place "harbored the dog and/or permitted it to remain on" property that Heritage Place owned. [DE 1-2 at ¶ 3]. Heritage Place subsequently filed a third-party complaint against the Greens in state court, alleging the Greens owned the dog as well as the property where the dog bite occurred and were, thus, liable for damages resulting from the dog bite. [DE 1-3 at ¶ 8, 9, 13].

Heritage Place holds a policy of insurance issued by QBE Insurance Corporation. On July 23, 2014, QBE filed the instant action with this Court seeking a declaratory judgment on its duty under the policy to cover the Greens for the underlying state court claim. QBE's complaint alleges that it is not responsible for the Greens' insurance coverage for several reasons, one of which is because the alleged injury occurred in an area owned by the Greens and not subject to coverage under the policy. [DE 1].

As of the date of this Order, QBE is not a party in the state court action. However, there is a pending motion before that court by A.H. for permission to amend her complaint and add QBE as a defendant, alleging that QBE is obligated to indemnify the Greens and asserting violations of Kentucky's Unfair Claims Settlement Practices Act. [DE 23-2].

The Greens ask this Court to abstain from exercising jurisdiction, arguing that the state court is the better forum to resolve this matter under Grand Trunk Western Railroad Co. v. Consolidated Rail Corp., 746 F.2d 323 (6th Cir. 1984) (setting forth five factors to guide district courts in determining whether to exercise their discretion to entertain a declaratory judgment action). QBE contends that this is the proper forum according to the Grand Trunk factors. For the reasons stated herein, the Court will grant Defendants' motion and abstain from exercising jurisdiction.

II. Analysis

The Declaratory Judgment Act states in relevant part:

In a case of actual controversy within its jurisdiction... 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, whether or not further relief is or could be sought.

28 U.S.C. § 2201(a). Whether a district court exercises jurisdiction under this statute, however, is within its discretion. Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995) (noting that Congress, through the Act, "created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants"). District courts should consider the following five factors in deciding whether to exercise jurisdiction over a declaratory judgment action:

(1) whether the declaratory action would settle the controversy;
(2) whether the declaratory action would serve a useful purpose in clarifying the legal relations in issue;
(3) whether the declaratory remedy is being used merely for the purpose of "procedural fencing" or "to ...

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