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Western World Insurance Group, Inc. v. Slone's Heating and Cooling, LLC

United States District Court, E.D. Kentucky, Southern Division, Pikeville

September 10, 2018

WESTERN WORLD INSURANCE GROUP, INC., Plaintiff,
v.
SLONE'S HEATING AND COOLING LLC, SHANNON BULLOCK, STEPHEN SLONE, and SHANNON BULLOCK Defendants.

          OPINION AND ORDER

          KAREN K. CALDWELL, CHIEF JUDGE.

         This matter is before the Court on Defendant, Shannon Bullock's motion to dismiss, or in the alternative, to abstain (DE 5). For the reasons outlined below, Bullock's motion to dismiss without prejudice is hereby Granted. As a result of this decision, Plaintiff, Western World Insurance Group, Inc.'s motion for default judgment is Denied as moot.

         Background

         On October 5, 2015, decedent Eli Bullock was fatally injured when his mother's vehicle rolled down the driveway of Stephen Slone and over an embankment (DE 1, 6). The location of the accident, 623 Winwright Road in Pikeville, Kentucky, was Stephen Slone's personal residence and the principal place of business for Slone's Heating and Cooling, LLC (“Slone's Heating and Cooling”), a company solely owned and operated by Slone (DE 1, 6).

         On July 13, 2016, Shannon Bullock, Eli Bullock's father, filed a state action in Pike Circuit Court against Stephen Slone. Shannon Bullock, Individually and in His Capacity as Administrator of the Estate of Eli Bullock v. Stephen Slone, Civil Action No. 16-Cl-00654. The complaint alleges that Stephen Slone breached a duty owed to Eli Bullock as a licensee or social guest on his property (DE 1, 6). Pursuant to a home owner's insurance policy, State Farm Fire and Casualty company has been defending the claims asserted against Stephen Slone in his individual capacity (DE 1, 6).

         In response, Stephen Slone filed a third-party complaint against his daughter, Amanda Bullock, seeking indemnity or contribution for any damages arising from the death of Eli Bullock (DE 1, 7). The third-party complaint specifically alleges that Amanda Bullock acted negligently in leaving the vehicle unattended with the keys in the ignition. On January 17, 2017, Shannon Bullock commenced a second action in Pike Circuit Court (DE 1, 8). This second action named Stephen Slone's business, Slone's Heating and Cooling, as the Defendant. Shannon Bullock, Individually and in His Capacity as Administrator of the Estate of Eli Bullock v. Slone's Heating and Cooling, LLC, Civil Action No. 17-Cl-0054. The January action against the LLC and the action filed against Stephen Slone in his individual capacity were consolidated on May 3, 2017 (DE 1, 9). This case is currently pending before Division I of the Pike Circuit Court.

         Slone's Heating and Cooling was insured under a commercial general liability insurance policy provided by Western World Insurance Group, Inc. (“Western World”). The precise contours of this insurance arrangement remain disputed. And though Western World provided Slone's Heating and Cooling with an initial legal defense, the insurance company now argues that it has no obligation to do so (DE 1, 2).

         On October 3, 2017, Western World filed a complaint in this Court seeking a declaration that the policy it issued to Slone's Heating and Cooling does not provide coverage for the claims against the business relating to the death of Eli Bullock. (DE 1). In particular, Plaintiff Western World avers that the insurance contract limits coverage in a way that would exclude liability merely arising from ownership and maintenance of Slone's property, as opposed to activity related to the company's HVAC and electrical operations. While Western World was not an original party to the Pikeville action, on December 22, 2017, the Pike Circuit Court permitted Shannon Bullock to amend his complaint to include the insurance company.

         On November 27, 2017, Shannon Bullock-a Defendant in this federal action-filed a motion to dismiss, or in the alternative, to abstain (DE 5). Plaintiff Western World has since responded (DE 7) and Bullock has submitted a reply (DE 9) to this response. In his motion to dismiss or in the alternative, to abstain, Defendant Shannon Bullock argues that the Pike Circuit Court is better situated to resolve the insurance coverage issue. This Court agrees.

         ANALYSIS

         The Declaratory Judgment Act provides that “[i]n 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); Nationwide Mut. Ins. Co. v. Veterans of Foreign Wars of the United States, No. CV 16-146-DLB, 2017 WL 1147454, at *3 (E.D. Ky. Mar. 27, 2017). This language makes clear that while federal district courts retain the ability to exercise this power, they are under no obligation to do. Id.

         The Sixth Circuit has enumerated five factors for courts to consider when determining whether to exercise jurisdiction under the Declaratory Judgment Act. These “Grand Trunk” factors include:

(1) whether the declaratory action would settle the controversy;
(2) whether the declaratory action would serve a useful purpose in clarifying the ...

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