Westfield Insurance v. Arnold

177 F. Supp. 3d 1054, 2016 U.S. Dist. LEXIS 50238, 2016 WL 1466533
CourtDistrict Court, E.D. Kentucky
DecidedApril 14, 2016
DocketCivil Case No. 5:16-cv-30-JMH
StatusPublished

This text of 177 F. Supp. 3d 1054 (Westfield Insurance v. Arnold) is published on Counsel Stack Legal Research, covering District Court, E.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Westfield Insurance v. Arnold, 177 F. Supp. 3d 1054, 2016 U.S. Dist. LEXIS 50238, 2016 WL 1466533 (E.D. Ky. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

Joseph M. Hood, Senior United States District Judge

This declaratory judgment action is pending for consideration on the motions to dismiss filed by Casey Arnold [DE 11] and Mediport, LLC, Dr. Timothy Carroll, Richard Covington, and Steve Morris [DE 12]. Defendant Westfield Insurance Company (“Westfield”) opposes the motions. [DE 13, 14]. For the reasons discussed below, the defendants’ motions to dismiss will be granted.

I.

This declaratory judgment action arises as a result of an underlying wrongful death action filed in Scott County Circuit Court, Kentucky (“the Scott Circuit Action”). In the Scott Circuit Action, Casey Arnold (“Arnold”), one of the defendants herein, has brought suit individually and as the adminstratrix of the estate of Chad Arnold and as next friend and guardian/conservator for Miles Arnold following the untimely death of her spouse at a 5K racing event at the Kentucky Horse Park on March 2, 2013. [DE 11-1, Third Amended Complaint].- Therein, Arnold asserts various negligence claims including, the failure to respond to the decedent’s demise in a timely fashion; failing to properly perform CPR and to provide an external defibrillator, the failure to use, operate equip, and maintain the ambulances at the event; as well as other alleged instances of negligence. The Defendants in the Scott Circuit Action include Mediport, Dr. Carroll, Richard Covington, and Steve Morris (the “Negligence Defendants”).

Arnold has also filed a Motion to Amerid the Complaint in the Scott Circuit Action to assert new allegations against the insurance companies who are potentially responsible for indemnifying the defendants in that action, including RSUI Indemnity Company and Landmark American Insurance Company (hereinafter “RSUI/Land-mark”), as well as Westfield Insurance Company. [DE 11-5, Fourth Amended Complaint]. In particular, the Fourth Amended Complaint asserts a claim for third party bad faith against RSUI/Land-mark on numerous grounds and a declaratory judgment action seeking a declaration of the rights and obligations between RSUI/Landmark and Westfield. Id.

Despite the pending Scott Circuit. Action, on January 27, 2016, Westfield filed the instant declaratory judgment action, pursuant to 28 U.S.C. § 2201, seeking a declaration that Westfield, Mediport’s automobile insurance carrier at the time of Mr. Arnold’s death, has no duty to defend or indemnify the Negligence Defendants in the Scott County Action. [DE 1], While Westfield named Arnold as well as the Negligence Defendants in this action, Westfield did not include RSUI/Landmark. Id.

On February 22, 2016, Defendants Arnold, as well as the Negligence Defendants, moved to dismiss Westfield’s complaint for declaratory judgment on substantially similar grounds. [DE 11, 12]. The motions to dismiss are addressed together herein.

II.

District courts retain discretion to determine “whether and when to entertain an [1056]*1056action under the Declaratory Judgment Act.” Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). The Declaratory Judgment Act (the “Act”), 28 U.S.C. §§ 2201 et seq., 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). The Act “confers discretion on courts,; not rights on litigants,” and the “propriety of issuing a declaratory judgment may depend on equitable considerations.” American Home Assurance Co. v. Evans, 791 F.2d 61, 64 (6th Cir.1986)(citing Green v. Mansour, 474 U.S. 64, 106 S.Ct. 423, 88 L.Ed.2d 371 (1985)). Thus, this Court is under no compulsion to exercise jurisdiction.

The Sixth Circuit has articulated five factors (the “Grand Trunk factors”) to guide a district court in determining whether to exercise jurisdiction under the Act. Scottsdale Ins. Co. v. Roumph, 211 F.3d 964, 968 (6th Cir.2000)(citing Grand Trunk Western Ry. Co. v. Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir.1984)). Those factors include whether:

1. the declaratory action would settle the controversy;
2. the declaratory action would serve a useful purpose in clarifying the legal relations in issue;
3. 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. the use of a declaratory action would increase friction between our federal and state courts and improperly encroach on state jurisdiction; and
5. there is an alternative remedy which is better or more effective.

Grand Trunk, 746 F.2d at 326. The Grand Trunk factors embody three main principles: efficiency, fairness, and federalism. Western World Ins. Co. v. Hoey, 773 F.3d 755, 759 (6th Cir.2014). The Court will analyze each factor in turn.

Settlement of the Controversy

The first factor focuses not on whether issuing a declaratory judgment would settle the controversy immediately before the Court, but whether doing so would settle the “ultimate controversy” in the underlying state court litigation. Atain Specialty Ins. v. Dwyer Concrete Lifting of Lexington, Inc., No. 12-cv-21, 2012 WL 2119407, at *3 (E.D.Ky. June 11, 2012). The Sixth Circuit has repeatedly held that “declaratory judgment actions seeking an advance opinion on indemnity issues are seldom helpful in resolving an ongoing action in another court.” Bituminous Cas. Corp. v. J & L Lumber Co., Inc., 373 F.3d 807, 812-13 (6th Cir.2004)(quoting Manley, Bennett, McDonald & Co. v. St. Paul Fire & Marine Ins. Co., 791 F.2d 460, 463 (6th Cir.1986)). “It is a rare case in which federal district courts should assert jurisdiction over an insurance company’s declaratory judgment action to resolve indemnity issues ancillary to an ongoing state-court case.” Nautilus Ins. Co. v. Grayco Rentals, Inc., No. 10-cv-133, 2011 WL 839549, *1 (E.D.Ky. Mar. 7, 2011).

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Bluebook (online)
177 F. Supp. 3d 1054, 2016 U.S. Dist. LEXIS 50238, 2016 WL 1466533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/westfield-insurance-v-arnold-kyed-2016.