Mid-Continent Casualty Company v. Van Emmerik Custom Homes, Inc. et al

Filing 36

OPINION AND ORDER denying as moot 27 motion to dismiss, or alternatively, stay and abate; denying 29 motion to dismiss, or alternatively, stay and abate. Signed by Judge John E. Steele on 2/22/2017. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
MID-CONTINENT
COMPANY,
a
corporation,

CASUALTY
foreign

Plaintiff,
v.

Case No: 2:16-cv-819-FtM-99MRM

VAN EMMERIK CUSTOM HOMES,
INC., a Florida corporation,
PRIYAJEEV
TRIKA,
an
individual, and JULIE TRIKA,
an individual,
Defendants.
OPINION AND ORDER
This matter comes before the Court on defendant Van Emmerik
Custom Homes, Inc.’s Motion to Dismiss, or Alternatively, Stay and
Abate (Doc. #29) filed on January 9, 2017.

Mid-Continent Casualty

Company’s Response in Opposition (Doc. #31) was filed on January
18, 2017, to which defendant replied (Doc. #34).

For the reasons

set forth below, the motion is denied.
I.
In this insurance coverage dispute, plaintiff-insurer MidContinent Casualty Company (MCC) seeks a declaratory judgment that
it has no duty to indemnify defendant-insured Van Emmerik Custom
Homes, Inc. (Van Emmerik) for claims asserted in a currently
pending state-court lawsuit brought by Priyajeev and Julie Trika,

styled Priyajeev Trika v. Van Emmerik Custom Homes, Inc., No. 2015CA-1554

(the

“Trika

action”).

In

particular,

MCC

seeks

a

declaratory judgment that certain property exclusions apply and
thus, MCC has no duty to indemnify Van Emmerik for the claims the
Trikas asserted against it.

(Doc. #29.)

MCC seeks no relief

regarding its duty to defend.
In support of dismissal, Van Emmerik’s argues that because
there has been no adjudication of liability against Van Emmerik in
the Trika action, this case should be either dismissed or stayed
until the state court allocates liability.

Until that time, Van

Emmerik argues, no actual controversy exists in which the Court
can declare the parties’ rights.

Alternatively, Van Emmerik

argues that if there is an actual controversy, the Court should
exercise its discretion to abstain from considering the indemnity
issue.

MCC argues the contrary.
II.

At

issue

in

this

matter

are

claims

arising

out

of

the

construction of a single-family residential property in Naples,
Florida (the “Property”), for which Van Emmerik was the general
contractor.

After the work was complete, the Trikas allegedly

discovered construction defects and deficiencies, and filed the
Trika action in the Circuit Court of Collier County, Florida,
alleging breach of contract, breach of warranty, and negligence.
The Trikas are currently proceeding in state court on an amended

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complaint filed on April 27, 2016, seeking to recover from Van
Emmerik, among others, for damages.

(Doc. #28-2.)

Pertinent here, MCC issued three contracts of insurance to
Van Emmerik: (1) Policy no. 04-GL-000853209, effective July 2,
2012

through

July

5,

2013;

(2)

Policy

No.

04-GL-000879985,

effective July 5, 2013 through July 5, 2014; and (3) Policy No.
04-GL-000907129, effective July 5, 2014 through July 5, 2015
(collectively, the Policies).

(Doc. #28-1.)

On May 3, 2016, Van

Emmerik tendered the underlying action to MCC, seeking defense and
indemnity, and MCC is currently defending Van Emmerik under the
terms of the Policies, subject to a complete reservation of rights.
III.
The

Declaratory

Judgment

Act

grants

federal

courts

the

discretion to “declare the rights and other legal relations of any
interested party seeking such declaration.”

28 U.S.C. § 2201(a).

Under the Declaratory Judgment Act this Court has discretion to
rule on an actual controversy but is “under no compulsion to
exercise ... jurisdiction.”
U.S. 491, 494 (1942).

Brillhart v. Excess Ins. Co., 316

The Court has “unique and substantial

discretion in deciding whether to declare the rights of litigants,”
as the Act “confers a discretion on the courts rather than an
absolute right on the litigants.”
U.S. 277, 286–87 (1995).

Wilton v. Seven Falls Co., 515

The grounds for a federal court to stay

a declaratory judgment action pending a related state proceeding

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are those adopted in Brillhart, 316 U.S. 491, reaffirmed in Wilton,
515 U.S. 277, and then elaborated upon by the Eleventh Circuit in
Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328 (11th Cir.
2005).
Under
Eleventh

the

Wilton–Brillhart

Circuit

and

Supreme

Abstention

Court

have

Doctrine,
cautioned

both

the

against

a

district court exercising its jurisdiction over a declaratory
judgment action when “another suit is pending in a state court [1]
presenting the same issues, [2] not governed by federal law, [3]
between the same parties.”

Ameritas, 411 F.3d at 1330 (emphasis

added) (quoting Brillhart, 316 U.S. at 495).
these

components,

the

Eleventh

Circuit

has

If a suit presents
provided

a

non-

exhaustive list of factors for district courts to consider when
determining whether to exercise jurisdiction over such a suit.
Id. at 1331. 1

1

These factors are “(1) the strength of the state’s interest
in having the issues raised in the federal declaratory action
decided in the state courts; (2) whether the judgment in the
federal declaratory action would settle the controversy; (3)
whether the federal declaratory action would serve a useful purpose
in clarifying the legal relations at issue; (4) whether the
declaratory remedy is being used merely for the purpose of
‘procedural fencing’ - that is, to provide an arena for a race for
res judicata or to achieve a federal hearing in a case otherwise
not removable; (5) whether the use of a declaratory action would
increase the friction between our federal and state courts and
improperly encroach on state jurisdiction; (6) whether there is an
alternative remedy that is better or more effective; (7) whether
the underlying factual issues are important to an informed
resolution of the case; (8) whether the state trial court is in a
better position to evaluate those factual issues than is the

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Here, the Trika action does not involve the same parties or
issues as this federal action.

Although Van Emmerik and the Trikas

are both parties to the state action, MCC is not a party, and the
state court will not be called upon to decide any of the issues
posed by MCC in this case.

This declaratory judgment action deals

with questions of insurance contract law, while the state court
case deals with questions of common-law contract and tort law.
Thus, the Court need not engage in analyzing the nine Ameritas
factors in deciding whether to exercise jurisdiction.

See also

Am. Economy Ins. Co. v. Traylor/Wolfe Architects, Inc., Case No.
3:12-cv-1094-J-32JBT, 2014 WL 3867642 (M.D. Fla. Aug. 6, 2014).
Because the underlying state court action does not involve the
same parties or present the same issues, the Court will exercise
its discretion and allow MCC’s claim to proceed in this separate
federal declaratory action.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1.

Defendant Van Emmerik Custom Homes, Inc.’s Motion to

Dismiss, or Alternatively, Stay and Abate (Doc. #29) is DENIED.

federal court; and (9) whether there is a close nexus between the
underlying factual and legal issues and state law and/or public
policy, or whether federal common or statutory law dictates a
resolution of the declaratory judgment action.”
Ameritas, 411
F.3d at 1331.

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2.

Defendant Van Emmerik Custom Homes, Inc.’s Motion to

Dismiss, or Alternatively, Stay and Abate (Doc. #27) is DENIED AS
MOOT since an Amended Complaint (Doc. #28) was filed.
DONE and ORDERED at Fort Myers, Florida, this
of February, 2017.

Copies:
Counsel of Record

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22nd

day