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Westfield Insurance Co. v. Harrington

United States District Court, W.D. Kentucky, Bowling Green Division

November 4, 2019

AMY L. HARRINGTON, as Administratrix of the Estate of Aniceto Lopez Perez, et al. DEFENDANTS



         This matter is before the Court on Defendant's Motion to Dismiss (DN 15). This motion is now ripe for adjudication. For the reasons that follow, the motion is GRANTED.

         I. BACKGROUND

         Defendant Amy Harrington (“Harrington”), as Administratrix of the Estate of Aniceto Lopez Perez (“Perez”), filed suit in Kentucky (Hart County) Circuit Court alleging that Perez was stabbed by employees of Paul Dennison (“Dennison”) or Dennison's Roadside Market (“Market”) on Dennison or his Market's property. (Compl. ¶ 9, DN 1). Perez later died as a result of his injuries. Plaintiff Westfield Insurance Company (“Westfield”) insured Dennison. (Compl. Ex. A, at 1, DN 1-2). Westfield brought this action, seeking a declaratory judgment from this Court that it “has no duty to pay or extend coverage or a defense to [anyone] for any damages” as a result of Harrington's state court action against Dennison and his Market. (Compl. 11).


         Harrington moves to dismiss Westfield's declaratory judgment action, contending that the Court should decline to exercise jurisdiction over this litigation in light of the related case pending in Hart Circuit Court. (Def.'s Mot. Dismiss 1-2, DN 15).

         Under the Declaratory Judgment Act, “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). A court's exercise of jurisdiction under the Declaratory Judgment Act, however, is discretionary- not mandatory. See Bituminous Cas. Corp. v. J & L Lumber Co., 373 F.3d 807, 812 (6th Cir. 2004) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942)). When deciding if a declaratory ruling is appropriate, a court should consider whether the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and whether it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. See Grand Trunk W. R. Co. v. Consol. R.R. Corp., 746 F.2d 323, 326 (6th Cir. 1984). The Sixth Circuit has outlined the following five factors to determine whether a district court should exercise jurisdiction over a request for a declaratory judgment:

(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 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 which is better or more effective.

Id.; see also Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 564 (6th Cir. 2008). The Grand Trunk factors embody three main principles: efficiency, fairness, and federalism. See W. World Ins. Co. v. Hoey, 773 F.3d 755, 759 (6th Cir. 2014) (citation omitted).

         A. Settlement of the Controversy and Clarification of Legal Relations

         In insurance coverage cases, most courts consider the first two Grand Trunk factors together because “it is almost always the case that if a declaratory judgment will settle the controversy, then it will clarify the legal relations in issue.” Flowers, 513 F.3d at 555 (citations omitted). Ultimately, “a declaratory judgment is proper if it will only have to decide purely legal questions or engage in fact-finding that does not affect the parties in the underlying action.” Argonaut-Midwest Ins. Co. v. Johnson, No. 3:14-CV-00395-TBR, 2014 WL 6804284, at *2 (W.D. Ky. Dec. 2, 2014) (internal quotation marks omitted) (citations omitted).

         In Scottsdale Insurance Co. v. Flowers, the Sixth Circuit explained that “[t]wo lines of precedent seem to have developed in our jurisprudence regarding consideration of this first factor in the context of an insurance company's suit to determine its policy liability.” Flowers, 513 F.3d at 555. The competing lines of precedent are represented on one hand by the decision in Bituminous Casualty Corp. v. J & L Lumber Co., where the Sixth Circuit found that the first two factors favored dismissal, and on the other hand by the decision in Northland Insurance Co. v. Stewart Title Guaranty Co., 327 F.3d 448 (6th Cir. 2003), where the Sixth Circuit found that the first two factors favored retention of the case. See Bituminous, 373 F.3d at 814; Northland, 327 F.3d at 454.

         The instant case bears some similarity to Northland. Like in Northland, Westfield “[i]s not a party to the state court action . . . .” Northland, 327 F.3d at 454. In fact, Westfield attempted to intervene in the state court action but was prevented from doing so by the trial court. (Def.'s Mot. Dismiss Ex. 3, at 2-5, DN 15-3; Def.'s Mot. Dismiss Ex. 4, at 2, DN 15-4). Additionally, “the scope of insurance coverage . . . [is not] before the state court.” Northland, 327 F.3d at 454. That being said, the instant case is also analogous to Bituminous. It appears likely that the scope of coverage issues will ultimately require crossover between the facts and circumstances attendant to the state court action. Bituminous, 373 F.3d at 813-14; Everett Cash Mut. Ins. Co. v. Mann, No. 1:17-CV-00201-GNS, 2019 WL 267734, at *2 (W.D. Ky. Jan. 18, 2019).

         In the Hart Circuit Court action, Harrington filed suit against Dennison, his Market, and other “Unknown Defendants” asserting claims of negligence. (Def.'s Mot. Dismiss Ex. 1, ¶¶ 13-17, DN 15-1). Before this Court, Westfield argues that it does not have to provide coverage to anyone as a result of the subject incident. Westfield identifies twelve different ways in which coverage would not apply. (Compl. ¶¶ 16-47). Although it may be possible in some cases to determine the application of coverage without delving into the facts and circumstances surrounding the incident and the relationships between the relevant actors, the coverage questions will almost certainly overlap with the underlying claim. Most of the coverage exclusions require knowledge of the facts giving rise to the incident sought to be covered. For example, the policy provides coverage only for “bodily injury” caused by an “occurrence[.]” (Compl. ¶¶ 21-22; Compl. Ex. A, at 86). The policy defines “occurrence” to “mean[] an accident . . . .” (Compl. Ex. A, at 102). Determining whether the act giving rise to the injury constitutes a covered “occurrence” requires examining the events surrounding the injury suffered by Plaintiff's decedent, which is exactly what the Hart Circuit Court must do in determining whether Dennison is liable for negligence in the state court action. This factual crossover prevents the Court ...

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