Twin City Fire Insurance Company v. CR Technologies, Inc.

Filing 21

Opinion and ORDER, ORDER Denying 10 MOTION to Dismiss 1 Complaint, or, in the Alternative to Stay filed by CR Technologies, Inc. Signed by Judge Kenneth A. Marra on 4/11/2014. (cqs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 13-80998-CIV-MARRA/MATTHEWMAN
TWIN CITY FIRE INSURANCE COMPANY,
a foreign company,
Plaintiff,
vs.
CR TECHNOLOGIES, INC., a Florida
corporation,
Defendant.
____________________________________/

OPINION AND ORDER
This cause is before the Court upon Defendant CR Technologies, Inc.’s Motion to
Dismiss and/or Stay the Case Pending Resolution of State Court Action (DE 10). The motion is
fully briefed and ripe for review.
On October 3, 2013, Plaintiff Twin City Fire Insurance Company (“Twin City”) filed a
declaratory judgment action against Defendant CR Technologies, Inc. (“CR”) to determine
coverage under a liability insurance policy for a final judgment entered in state court in Palm
Beach County, Florida. (Compl. ¶ 1.) Twin City is a Connecticut corporation with its principal
place of business in Connecticut. It issued a directors and officers liability insurance policy to
U.S. Datanet Corporation (“Datanet”). (Compl. ¶ 5.) CR is a Florida corporation with its
principal place of business in Florida which entered into a contract with Datanet. The underlying
state court lawsuit was brought by CR against Datanet and others alleging breach of contract and

theft of the computer systems.1 (Compl. ¶ 6.)
On November 17, 2013, CR filed a declaratory judgment action against Twin City as well
as other insurers in the Circuit Court of the Fifteenth Judicial Circuit in Palm Beach County, case
number 502013CA017217XXXXMB. (State court compl. in case no.
502013CA017217XXXXMB.) On December 19, 2013, Twin City and the other defendant
insurers filed a Notice of Removal of that case in this Court, which was assigned case number
13-81310-civ. (Notice of Removal, DE 1, case number 13-81310-civ.)
CR now moves to dismiss and/or stay this action pending resolution of the state court
action 502013CA017217XXXXMB. Twin City opposes this request, pointing out that the state
court action has now been removed to this Court. In reply, CR states that the removal of case
number 13-81310-civ was improper and that the case should be remanded.
CR relies upon the Brillhart doctrine. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491
(1942). “Brillhart is used to avoid uneconomical as well as vexatious actions where another suit
is pending in a state court presenting the same issues, not governed by federal law, between the
same parties.” Northern Ins. Co. of N.Y. v. David Nelson Const. Co., 41 F. Supp. 2d 1332, 1339
(M.D. Fla. 1999). See, e.g., Sherwin–Williams Co. v. Holmes County, 343 F.3d 383, 390–91
(5th Cir. 2003) (“if the federal declaratory judgment action raises only issues of state law and a
state case involving the same state law issues is pending, generally the state court should decide
the case and the federal court should exercise its discretion to dismiss the federal suit”); Canal
Ins. Co. v. Morgan, No. 06-0727-WS-M, 2007 WL 174387, at * 1 (S.D. Ala. Jan. 19, 2007)
1

Case number 50-2008-CA-009159-XXXX-MB-AO, Fifteenth Judicial Circuit, Palm
Beach County, Florida. (Compl. ¶ 9.)
2

(dismissing federal declaratory action in favor of pending parallel state court action where
“identical insurance coverage issues relating to the Policy are being litigated in both the Clarke
County action and the instant declaratory judgment action”); Progressive Specialty Ins. Co. v.
Bailey, No. 06-0289-WS-C, 2006 WL 2091749, *4 (S.D. Ala. July 25, 2006) (dismissing federal
declaratory action in favor of pending parallel state court action regarding insurance coverage
where “[i]dentical claims for declaratory relief are now before the state court and this Court.”).
Here, there is no dispute that the state court case has been removed to this federal court.
In the absence of a parallel state court proceeding, there is no legal basis for CR’s request for the
Court to dismiss or stay the case under the Brillhart doctrine.2
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendant CR’s Motion to
Dismiss and/or Stay the Case Pending Resolution of State Court Action (DE 10) is DENIED.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County,
Florida, this 11th day of April, 2014.
______________________________________
KENNETH A. MARRA
United States District Judge

2

The Court notes that there is pending motion for remand in the case no. 13-81310-civ.
The Court is simultaneously denying that motion.
3