Canal Insurance Company v. Yelder et al

Filing 96

OPINION. Signed by Honorable Judge Myron H. Thompson on 1/18/12. (djy, )

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

CANAL INSURANCE COMPANY,
a Foreign Corporation,

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Plaintiff,
v.
PRINCE D. YELDER d/b/a
Yelder-N-Sons Trucking,
Inc., et al.,
Defendants.

CIVIL ACTION NO.
2:10cv185-MHT
(WO)

OPINION
Plaintiff

Canal

declaratory-judgment
Yelder

(d/b/a

Insurance
action

Yelder-N-Sons

Company

against

filed

defendants

Trucking,

Inc.),

this
Prince
Larry

Yelder, Sr., Harco National Insurance Company, and United
States Fire Insurance Company (“USFIC”), requesting the
court to find that Canal is not responsible to defend the
Yelders or pay any judgments to Harco or USFIC pursuant
to

a

MCS-90

Yelders.

endorsement

within

its

policy

with

the

Jurisdiction is proper under 28 U.S.C. § 1332

(diversity).

In June 2010, this court granted Canal’s motion for
default

judgment

against

the

Yelder

defendants

and

declared that Canal “does not have a duty to defend or
indemnify defendants Prince Yelder (d/b/a Yelder-N-Sons
Trucking, Inc.) and Larry Yelder, Sr. ... for the June
14, 2007, automobile accident referred to in [Canal]’s
complaint in this case.”.

Canal Ins. Co. v. Yelder, 2010

WL 2488866 (M.D. Ala. 2010) (Thompson, J.).

And, in

March 2011, following a stipulation from Harco that it
had

no

judgment

claims

against

directing

prejudice.

that

Canal,
Harco

this
be

court

entered

dismissed

a

without

USFIC is the sole remaining defendant.

This matter is before the court on USFIC’s motion to
amend its position and to dismiss this lawsuit.

For the

reasons that follow, the motion will be granted.
In June 2007, Larry Yelder, Sr., an employee of
Yelder-N-Sons Trucking, was driving in Missouri when his
tractor-trailer collided with another truck, owned by
Tri-National Logistics, Inc.

2

The Tri-National truck was

damaged and its driver and passenger (Paul and Joyce
Pikey) sustained injuries in the accident.

Prince Yelder

(owner of Yelder-N-Sons Trucking) and his driver (Larry
Yelder, Sr.) were insured by Canal.
Following the accident, the Pikeys, Tri-National, and
their

insurance

companies

(USFIC

and

Harco)

sought

compensation from Canal for the damages and injuries
arising

from

compensation

the

accident.

carrier

for

USFIC

Paul

is

Pikey’s

the

worker’s

employer

and

previously asserted a subrogation claim against Canal for
benefits paid to Paul Pikey.
In March 2010, Paul Pikey filed suit against the
Yelders in Missouri state court.

After the initiation of

the Missouri litigation, USFIC filed a motion changing
its position in this court.

USFIC now contends that,

under Missouri law, any benefits paid to Paul Pikey in
the state-court litigation will be used to cover USFIC’s
subrogation interest.
No.

88)

at

2-3

USFIC’s Motion to Dismiss (Doc.

(citing

Kinney

3

v.

Schneider

Nat’l

Carriers,

Inc.,

200

S.W.3d

607

(Mo.

App.

2006)

and

Missouri Highway & Trans. Comm’n v. Merritt, 204 S.W.3d
278 (Mo. App. 2006)).
Pikey

filed

Missouri

a

State

According to USFIC, “Because Paul

third-party

action

against

Yelder

in

Court,

thus

preserved

both

his

and

independent personal injury claim and USFIC’s subrogation
interest, there is no ‘direct claim’ by USFIC against
Canal.”

Id. at 3.

Given USFIC’s admission that it no longer has a
“direct claim” against Canal and because this admission
has the force of law, see, e.g., New Hampshire v. Maine,
532

U.S.

742,

749-50

(2001)

(stating

that

judicial

estoppel is an equitable doctrine designed to prevent a
party from asserting a position in later proceedings that
is inconsistent with a position upon which that party
prevailed in an earlier proceeding), the court sees no
reason not to allow the change of position.
The court further holds that not only should it, in
its discretion, decline entry of a declaratory judgment

4

pursuant to the Declaratory Judgment Act, 28 U.S.C. §
2201, but that this litigation no longer presents a “case
or “controversy.”
F.Supp.

1557,

Cf. Auto–Owners Ins. Co. v. Toole, 947

1561

(M.D.

Ala.

1996)

(Thompson,

J.)

("Here, Toole could prevail in the underlying lawsuit.
With this result, the issue 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.
concludes

that

the

For these reasons, the court

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,

declaratory relief.’”)
Pharmacists

Mutual

decline

to

provide

(citation and footnote omitted);
Ins.

Co.

v.

Godbee

Medical

Distributors, Inc., 733 F. Supp. 2d 1281, 1286 (M.D. Ala.
2010) (Thompson, J.) (noting that a duty to indemnify
“‘is not ripe for adjudication until the insured is in

5

fact

held

liable

in

the

underlying

suit’”)

(quoting

Nationwide Ins. v. Zavalis, 52 F.3d 689, 693 (7th Cir.
1995)).

*

*

*

The court concludes with two points.
ruling

shall

not

be

taken

to

prejudice

First, this
any

party’s

position in the Missouri state-court litigation. Second,
as

stated

represented

above,
to

USFIC

this

is

court

on

notice

that,

in

that

it

has

light

of

the

underlying state-court litigation, it has no “direct
claim” against Canal for its subrogation interest.

An

appropriate judgment, granting USFIC’s motion to amend
its position and for dismissal of this lawsuit, will be
entered.
DONE this the 18th day of January, 2012.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE