United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
THOMAS
E. JOHNSTON UNITED STATES DISTRICT JUDGE
Before
the Court is Defendant Empire Builders, Inc.'s Motion to
Dismiss. (ECF No. 26.) For the reasons provided herein, the
Court DENIES the motion.
I.
BACKGROUND
This
case, filed pursuant to the federal Declaratory Judgment Act,
involves two plaintiff insurance companies[1] that seek a
declaration from this Court that they have no duty to defend
or indemnify Defendant for damages that may be awarded
against it in litigation currently in the Circuit Court of
Monongalia County, West Virginia. In that state court case, a
plaintiff claiming bodily injury and property damage sued
Defendant. Almost eight months after this case was filed,
Defendant filed the instant motion to dismiss this action on
abstention grounds after filing a third- party complaint in
the underlying state action against the two Plaintiff
insurance companies here. Per that third-party complaint in
the underlying state case, Defendant seeks a similar
declaration from the state court that the two insurance
companies must indemnify it for any adverse judgment. Both
Plaintiff insurance companies filed motions to dismiss the
third-party action in state court based on this federal
matter. Plaintiff Scottsdale Insurance Company notified this
Court that the Circuit Court of Monongalia County
subsequently stayed the third-party action there until this
Court “decide[s] whether it intends to retain
jurisdiction of . . . [Plaintiffs'] declaratory judgment
claims.” (ECF No. 30.)
II.
DISCUSSION
A
district court's discretion to dismiss a case on
abstention grounds is conferred by the Declaratory Judgment
Act and may be exercised regardless of an independent
jurisdictional basis for the suit. See Wilton v. Seven
Falls Co., 515 U.S. 277, 282, 289-90 (1995)
(“[D]istrict courts possess discretion in determining
whether . . . to entertain an action under the Declaratory
Judgment Act, even when the suit otherwise satisfies subject
matter jurisdictional prerequisites.”); see also
United States v. City of Las Cruces, 289 F.3d 1170,
1180-81 (10th Cir. 2002) (“This is because the
Declaratory Judgment Act itself is an enabling act, which
confers a discretion on the courts regardless of the
jurisdictional bases upon which the suit is brought.”
(internal quotation marks omitted) (citation omitted)). Case
law on the abstention doctrine is clear that a pending state
action does not necessarily bar a federal suit concerning the
same subject matter if the federal court has jurisdiction.
See Moses H. Cone Mem'l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 13-19 (1983). Here, Plaintiff
Scottsdale Insurance Company asserts-and Defendant
concedes-that jurisdiction is proper as there is complete
diversity between the parties and the amount in controversy
exceeds $75, 000. (ECF No. 1 at 2 ¶ 4; ECF No. 9 at 2
¶ 4.)
Where
state proceedings are parallel and duplicitous and will
adequately settle all claims related in the federal action,
the Court may exercise its discretion to refuse to exercise
jurisdiction. See Gannet Co., Inc. v. Clark Constr. Grp.,
Inc., 286 F.3d 737, 741 (4th Cir. 2002); see also
Wilton, 515 U.S. at 286-89; Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 814,
817-20 (1976) (noting a presumption against abstention);
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491,
495-98 (1942). The Court recognizes that Defendant brought a
third-party complaint against Plaintiffs here in the
underlying state action that would arguably duplicate the
current proceeding. However, Defendant did not seek leave of
the state court to file that third-party complaint until
after this federal suit was filed-eighteen months after the
state court matter commenced. While Plaintiffs here each
sought dismissal of the third-party complaint in state court,
the state court has not disposed of or proceeded with that
third-party suit. Rather, it stayed the third-party complaint
filed by Defendant pending this Court's decision
regarding whether it will retain jurisdiction. (See
ECF No. 30.)
Of
particular persuasion to the Court here is the timing of
Defendant's motion. This case was originally filed on
June 22, 2016, yet Defendant did not file the instant motion
until March 15, 2017. Given that the state court action
commenced in December 2014, it is clear that Defendant did
not consider seeking indemnification from Plaintiffs here in
the state court litigation until it was prompted to do so by
the matter now pending before this Court. Defendant provides
the Court with no good cause for why it waited nine months
after this litigation's commencement to attempt to
persuade this Court that it should not exercise jurisdiction
over the matter beyond Defendant's delayed decision to
file the third-party complaint in state court a year and a
half after that action began. Motions to dismiss filed
pursuant to Federal Rule of Civil Procedure 12(b) were due in
this case on October 31, 2016. (ECF No. 10.) The Court notes
that the pending motion is not a traditional Rule 12(b)
motion to dismiss challenging an impediment to this
Court's exercise of authority such as lack of
jurisdiction or the complaint's failure to state a claim,
but it helps demonstrate that Defendant's decision not to
raise the abstention issue earlier in this case's history
is suspect at best.
While
failure to raise the issue of abstention sooner does not
automatically bar the Court from exercising its discretionary
power to abstain from hearing this case, it is a factor this
Court has considered in deciding to retain jurisdiction and
resolve the parties' dispute in this forum. The Circuit
Court of Monongalia County has stayed the state court
proceedings that are potentially parallel and duplicitous.
Thus, the matter there has not proceeded past the pleadings
stage. Conversely, discovery is closed in this federal
matter, and the Court has under advisement two motions for
summary judgment that became ripe last month. The Court
perceives no advantage in abstaining from the exercise of
proper jurisdiction in this case, particularly given that
discovery is closed and summary judgment motions are pending,
unlike the state court proceeding that appears to remain in
its infancy.
III.
CONCLUSION
For the
reasons set forth above, the Court DENIES
the Motion to Dismiss, (ECF No. 26), and will proceed toward
resolving the pending motions for summary judgment.
IT
IS SO ORDERED.
The
Court DIRECTS the Clerk to send a copy of
this Order to counsel of ...