Canal Insurance Company v. Yelder et al

Filing 96

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

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IN THE DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION CANAL INSURANCE COMPANY, a Foreign Corporation, ) ) ) ) ) ) ) ) ) ) ) ) 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

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