Progressive Specialty Insurance Company v. Mims et al

Filing 78

OPINION AND ORDER that plaintiff Dazia M. Fumbah's 68 Motion to Reconsider is denied as further set out in the opinion and order. Signed by Honorable Judge Myron H. Thompson on 1/17/2012. (Attachments: # 1 Civil Appeals Checklist)(dmn, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, SOUTHERN DIVISION

PROGRESSIVE SPECIALTY
INSURANCE COMPANY,

)
)
)
Plaintiff,
)
)
v.
)
)
LARRY DWAYNE MIMS; et al., )
)
Defendants.
)

CIVIL ACTION NO.
1:10cv681-MHT
(WO)

OPINION AND ORDER
Plaintiff Progressive Specialty Insurance Company
filed this lawsuit against defendants Larry Dwayne Mims,
Paula

Denise

Traylor,

Dazia

M.

Fumbah,

and

Werner

Enterprises, Inc., seeking a declaration as follows with
regard to a state lawsuit: Progressive has no duty to
provide liability insurance coverage under the terms of
a policy issued to Mims; and Progressive has no duty to
provide a defense to Mims or Traylor or to indemnify them
for any lawsuits arising out of the accident at issue.
Jurisdiction is proper pursuant to 28 U.S.C. § 1332
(diversity).

On

April

1,

2011,

this

court

entered

a

default

judgment against Mims and Traylor, and, on June 30, 2011,
based on that default judgment, this court entered a
declaration

that

Progressive

had

no

duty

to

provide

liability insurance coverage to Mims for the underlying
accident and no duty to indemnify or defend Mims and
Traylor.
Fumbah,

the

plaintiff

in

the

underlying

state

litigation, has filed a timely motion asking this court
to reconsider its April 1 and June 30 default judgment
and declaration that Progressive has no duty to defend or
indemnify Mims and Traylor.

Fumbah contends that his

pending federal cross-claim against Mims for negligent
entrustment

of

his

vehicle

to

Traylor

justifies

re-

opening Progressive’s default judgment and declaration
against Mims and Traylor.
With regard to the duty to defend issue, Fumbah lacks
standing.

“To establish standing, a litigant must show:

(1) ‘injury in fact,’ meaning the invasion of a legally-

2

protected interest which is concrete, particularized,
actual, and imminent; (2) a causal relationship between
the

injury

likelihood
favorable

and

the

challenged

that

the

injury

decision.”

conduct;

will

Alabama

be

and

(3)

a

by

a

redressed

Disabilities

Advocacy

Program v. J.S. Tarwater Dev. Ctr., 894 F. Supp. 424, 427
(M.D. Ala. 1995) (Thompson, C.J.) (internal quotation
marks omitted).
Here, Fumbah cannot assert Mims’s rights under his
insurance policy.

The duty to defend is a right vested

in

Fumbah

the

insured;

suffers

no

injury

because

Progressive does not pay for the insured’s lawyer.

This

court has been clear: “A person has no standing to
assert, under an insurance policy to which he is not a
party and thus under which he is not insured, the insurer
has a duty to defend the insured.”

Canal Ins. Co. v.

Cook,

(M.D.

564

F.

Supp.

2d

1322,

1326

Ala.

2008)

(Thompson, J.); see also Allstate Ins. Co. v. Wayne
County, 760 F.2d 689 (6th Cir. 1985).

3

As to the duty to indemnify, these proceedings have
not yet resulted in a state-court finding that Mims is
liable to Fumbah.

As a result, this federal court not

only determines, in its discretion, that a declaration is
inappropriate under the Declaratory Judgment Act, 28
U.S.C. § 2201, but this court also finds that a ‘case' or
‘controversy' is lacking.

See Auto–Owners Ins. Co. v.

Toole, 947 F.Supp. 1557, 1561 (M.D. Ala. 1996) (Thompson,
J.)

("Here,

lawsuit.

Toole

With

could

this

prevail

result,

the

in

the

issue

underlying
of

whether

Auto–Owners must indemnify Toole would be moot, and the
court would never have to reach the issue.

‘The time and

effort the court and the parties would have expended in
resolving the issue would be wasted.

For these reasons,

the court concludes that the issue of indemnification is
not

sufficiently

ripe

to

present

a

“case”

or

“controversy” and that, if there were, the court would
still, in the exercise of its discretion, decline to
provide declaratory relief.’”)

4

(citation and footnote

omitted).
judgment

Indeed, the state court
against

proceeding.
on

appeal,

Fumbah

in

has entered summary

the

underlying

state

While, admittedly, the state case is pending
there

is

no

need

to

address

whether

Progressive must indemnify Mims. Fumbah’s pending crossclaim against Mims and Traylor for negligent entrustment
raises the same ripeness concerns. (Because this issue is
not ripe, the court need not address whether an uninsured
third-party may assert an insured's duty to indemnify.)
For

those

reasons,

Fumbah

cannot

challenge

this

court’s ruling that Progressive has no duty to provide
liability insurance coverage to Mims and Traylor for the
accident at issue.
***
Accordingly, it is ORDERED that plaintiff Dazia M.
Fumbah’s motion to reconsider (Doc. No. 68) is denied.
DONE, this the 17th day of January, 2012.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE