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State Farm Fire and Casualty Co. v. Taylor

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

July 26, 2018

RYAN TAYLOR, et al., Defendants.



         This action presents the question of whether State Farm Fire and Casualty Company ("State Farm") has a duty under its homeowner's insurance policy with Defendant Alex Lincoln Carpenter to defend or indemnify Carpenter regarding bodily injury claims asserted against him by Defendant Ryan Taylor. [See Record No. 1.] State Farm has moved for a declaratory judgment that it is under no such duty, and Taylor has moved for a declaratory judgment that it is. [Record Nos. 22, 25] For the reasons that follow, State Farm's motion will be granted, and Taylor's motion will be denied.


         The incident giving rise to this action took place outside of Rosebud's Bar and Silk's Lounge around 2:55 a.m. on Sunday, November 9, 2014. [Record Nos. 22-4, p. 1; 25-2, p. 12] The bars had just closed for the night, and a group of patrons remained, milling about in the street. [Record No. 25-2, pp. 12, 19-21, 26] According to Carpenter, he and William James were looking for a group of friends when they were approached by Wade Fisher. [Id. at 20-21] Fisher, Carpenter's former co-worker, and James, Carpenter's friend, had developed an interest in the same woman during the evening. [Id. at 16-17] The woman apparently showed more interest in James than Fisher, creating some animosity. [Id. at 18-19]

         Fisher accused James of stealing a cell phone.[1" name="FN1" id="FN1">1] [Id. at 21, 42-43] Carpenter believes this was a "made up cell phone that didn't exist" and Fisher "was just fishing for a fight completely at that point" because James "was going to take his pretty little blond home." [Id. at 21-22, 43] Carpenter knew Fisher to be aggressive from past interactions so he allegedly attempted to deescalate the situation by taking James to the other side of the street. [See Id. at 22-23.] But Fisher followed James and Carpenter across the street. When Carpenter tried to intervene again, Fisher pushed him "aggressively in the chest" to get him out of the way. [Id. at 25-26] Carpenter "kind of fell back" into the street, and had to catch his balance. [Id. at 26] When he gathered himself and "re-approached the situation," he found Fisher and three others surrounding James in a corner against a wall and a few trash cans. [Id. at 26-28]

         According to Carpenter, one of the men (who turned out to be Ryan Taylor) had his hands around James' shoulders. [Id. at 27-28] Carpenter believed that James' safety was being threatened, "thought within a split second," and decided to "hit the guy that had his hands around [James'] shoulders." [Id. at 28-29] He swung at Taylor from a couple of feet away, "trying to punch him." [Id. at 29, 44] Without a particular target in mind, Carpenter aimed generally for Taylor's head, realizing that if he hit Taylor in the head it might hurt him. [Id. at 30] The blow landed on Taylor's jaw and sent him stumbling into the trash cans. [Id. at 29-30]

         A nearby police officer broke up the fight, handcuffed Carpenter, and sat him on the ground. [Id. at 30] Carpenter was charged with second degree assault. [Record No. 22-5] He later pleaded guilty under North Carolina v. Alford, 25');">400 U.S. 25 (1970), to fourth degree assault. [Record No. 22-6] He served a sentence of two years' probation, and paid approximately $600 to $800 in restitution. [Record No. 25-2, pp. 40-41]

         Shortly after Carpenter entered his Alford plea, Taylor filed a civil action in the Fayette Circuit Court alleging that Carpenter committed the tort of assault. [Record No. 22-7] Carpenter was insured on the date of loss under a homeowner's policy with State Farm that, in part, provided liability coverage. [See Record No. 22-1, p. 6.] State Farm hired counsel to defend Carpenter in the civil action under a reservation of rights, and filed this separate action seeking a declaratory judgment that it is under no duty to defend or indemnify Carpenter against Taylor's claims. [See id.] State Farm and Taylor's cross-motions for declaratory judgment are now ripe for consideration.[2" name="FN2" id="FN2">2] [Record Nos. 22, 25]


         The Declaratory Judgment 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). But this provision "does not provide for its own subject matter jurisdiction; the plaintiff must establish that the district court has either diversity jurisdiction or federal question jurisdiction before the Court will entertain a declaratory action." Brotherhood Mut. Ins. Co. v. United Apostolic Lighthouse, Inc., 200 F.Supp.2d 689');">200 F.Supp.2d 689, 691 (E.D. Ky. 2002). In the present case, the plaintiff has alleged that the defendants are all Kentucky citizens, the plaintiff is an Illinois citizen, and the amount in controversy exceeds $75, 000, exclusive of interest and costs. [Record No. 1] Accordingly, there is diversity jurisdiction to resolve this action under 28 U.S.C. § 1332(a).

         "Once the Court has determined that subject matter jurisdiction exists, it must evaluate whether this case is appropriate for declaratory judgment pursuant to the Declaratory Judgment Act." Brotherhood, 200 F.Supp.2d at 692. The Declaratory Judgment Act "created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants." Wilton v. Seven Falls Co, 515 U.S. 277, 288 (1995). Thus, "district courts possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites." Id. at 282.

In deciding whether a case is appropriate for declaratory judgment, the principal criteria are (1) whether the judgment would settle the controversy; (2) whether the declaratory action would serve a useful purpose in clarifying the legal relations at issue; (3) whether 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) whether the use of a declaratory action would increase friction between our federal and state courts and improperly encroach upon state jurisdiction; and (5) whether there is an alternative remedy that is better or more effective.

Am. Home Assurance Co. v. Evans, 1 F.2d 61');">791 F.2d 61, 64 (6th Cir. 1986) (citing Grand Trunk W. R.R. v. Consol. Rail Corp., 2d 323');">746 F.2d 323, 326 (6th Cir. 1984)).

         Here, issuing a declaratory judgment would settle the controversy, would serve a useful purpose in clarifying the legal relations at issue, and would not improperly encroach on state jurisdiction. It does not appear that a declaratory judgment is being sought for an improper purpose. And it does not appear that there is an alternative remedy that would ...

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