United States District Court, E.D. Kentucky, Northern Division, Covington
MEMORANDUM OPINION AND ORDER
L. Banning United States District Judge.
American National Property and Casualty Company (ANPCC)
brought this declaratory-judgment action to adjudicate its
obligations under an insurance contract. (Doc. # 1).
ANPCC's suit arises from an underlying tort action
brought in Kentucky state court by Defendant Jalontai Wilson
against ANPCC's insureds, Dalton and Douglas Conway,
following an automobile accident between Dalton Conway and
Jalontai Wilson. Id. ANPCC alleges certain facts
that, if true, would-according to ANPCC-invoke an exclusion
in the Conways' automobile insurance policy and free
ANPCC from its contractual obligations. Id.
matter is now before the Court on Defendant Jalontai
Wilson's Motion to Dismiss for Lack of Subject Matter
Jurisdiction. (Doc. # 10). Wilson argues that the Court
should exercise its discretion to decline jurisdiction over
this declaratory-judgment action in the interest of fairness,
judicial efficiency, and federalism. Id. ANPCC
having filed its Response (Doc. # 13) and the time for
further briefing having expired under the Local Civil Rules,
the matter is now ripe for review. L.R. 7.1(c). For the
reasons set forth herein, Defendant Wilson's Motion to
Dismiss is granted.
FACTUAL AND PROCEDURAL BACKGROUND
ANPCC has named its insureds, Dalton and Douglas Conway, as
well as claimant Jalontai Wilson, as Defendants in this
declaratory-judgment action. See (Doc. # 1).
Defendant Wilson is the Plaintiff in the underlying
state-court action filed in Kenton County Circuit Court on
June 7, 2018. (Doc. # 10-2). Wilson's suit named
Dalton Conway, Douglas Conway, and ANPCC. Id.
Therefore, the same parties involved in the instant
declaratory-judgment action are parties to the underlying
state-court suit. See id.
state-court Complaint alleges that on September 5, 2017, he
was a passenger in Dalton Conway's vehicle, and was
injured while exiting the vehicle due to Mr. Conway's
operation of the vehicle. Id. As to Dalton Conway,
Wilson brought a negligence claim (Count One) and a
negligence-per-se claim based upon
Kentucky's reckless-driving statute, Ky. Rev. Stat.
§ 189.290 (Count Two). Id. Wilson also alleges
assault and battery claims against Dalton Conway (Counts Four
and Five) as well as a remedy-for-criminal-acts claim under
Ky. Rev. Stat. § 446.070 (Count Six) and a
gross-negligence claim (Count Seven). Id. at 4-5. As
to the owner of the vehicle, Douglas Conway, Wilson brought a
negligent-entrustment claim (Count Three). Id. at 3.
Finally, as to ANPCC, the Conways' motor-vehicle insurer,
Wilson brought a claim for reparation benefits under Ky. Rev.
Stat. § 304.39-050 (Count Eight). Id. at 7.
initiated this declaratory-judgment action on July 11,
2018-approximately thirty-four days after Jalontai Wilson
filed his state-court complaint. (Doc. # 1). In its federal
complaint, ANPCC summarized the allegations in Wilson's
state-court Complaint, see (Doc. # 1 at 2-3), and
added an allegation that the motor-vehicle accident arose out
of Dalton Conway's intentional acts and criminal conduct.
Id. at 3. Specifically, ANPCC's Complaint
alleges that on the day of the subject accident, Dalton
Conway was selling marijuana to Jalontai Wilson and an
unknown individual when Wilson and the unknown individual
attempted to rob him. Id. ANPCC further alleges that
during the attempted robbery, Conway attempted to flee to
avoid being shot. Id. at 3. In the process of
fleeing, Conway allegedly struck Wilson with the door of the
insured vehicle, causing significant injuries. Id.
Complaint alleges that the insurer is entitled to a
declaratory judgment confirming that there is no coverage
under the circumstances because Wilson's injuries
occurred as the result of an “intentional act” by
Dalton Conway “while participating in or preparing to
commit a criminal act, ” triggering several exclusions
under the policy. Id. at 3-4. Further, ANPCC seeks a
declaration not only that it “has no liability”
under the policy, but that it also “has no duty or
obligation to defend Douglas Conway and/or Dalton
Conway” against Wilson's state-court tort
claims. (Doc. # 1 at 5-6).
motion to dismiss (Doc. # 10), Wilson argues that the Court
should decline jurisdiction over this action in the interest
of fairness, judicial efficiency, and federalism.
Id. Because this case presents the same parties and
similar issues of fact as those involved in the underlying
state-court litigation, Wilson argues that litigation of the
insurance issue before this Court would be inefficient,
unfair, and result in potentially overlapping factfinding.
See Id. ANPCC filed a Response on September 20,
2018. (Doc. # 13). The time for further briefing having
expired, see L. R. 7.1(c), the matter is now ripe.
Standard of Review
Declaratory Judgment Act “confer[s] on federal courts
unique and substantial discretion in deciding whether to
declare the rights of litigants.” Scottsdale Ins.
Co. v. Flowers, 513 F.3d 546, 554 (6th Cir. 2008)
(quoting Wilton v. Seven Falls Co., 515 U.S. 277,
286 (1995)); 28 U.S.C. § 2201 (providing that courts
“may, ” not must, “declare the
rights and other legal relations of any interested party
seeking such declaration”). Thus, the U.S. Supreme
Court has held that “[a]lthough the District Court
ha[s] jurisdiction of the suit under the Federal Declaratory
Judgments Act, it [i]s under no compulsion to exercise that
discretion.” United States Fire Ins. Co. v. Albex
Aluminum, Inc., 161 Fed.Appx. 562, 564 (6th Cir. 2006)
[Albex] (citing Brillhart v. Excess Ins. Co. of
America, 316 U.S. 491, 494 (1942)). Moreover, unlike the
high threshold required to invoke Colorado River
abstention, courts need not “point to
‘exceptional circumstances' in declining to
exercise jurisdiction in a declaratory judgment suit.”
Id. (citing Wilton, 515 U.S. at 286;
Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800, 818-20 (1976)).
district court's discretion is not unfettered,
however.” Albex, 161 Fed.Appx. at 564. The
Sixth Circuit has identified five factors that a district
court must consider in deciding whether or not to exercise
jurisdiction over a request for a declaratory judgment.
Grand Trunk W. R.R. Co. v. Consol. Rail Corp., 746
F.2d 323 (6th Cir. 1984). Subsequently refined to add three
additional subfactors, the present formulation of the
Grand Trunk test requires the district court to
analyze the following factors:
(1) whether the declaratory action would settle the
(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
provide an arena for res judicata;”
(4) whether the use of a declaratory action would increase
the friction between our federal and state courts and
improperly encroach upon state ...