Star Insurance Company v. TLC Trucking, LLC et al
MEMORANDUM AND ORDER granting 6 Motion to Dismiss; finding as moot 10 Motion to Consolidate Cases. Signed by District Judge Monti L. Belot on 04/28/2015. (aa)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
STAR INSURANCE COMPANY,
TLC TRUCKING, LLC;
REYMUNDO ESTRADA GARCIA;
KENYA D. RUDZIK; and
CHANCE R. RUDZIK,
MEMORANDUM AND ORDER
Before the court are the following:
Defendants’ Motion to Dismiss or Stay (Docs. 6,
7); Star Insurance Company’s Response (Doc. 9);
Defendants’ Reply (Doc. 12);
Star Insurance Company’s Motion to Consolidate
Cases (Docs. 10, 11); Defendants’ Response (Doc.
Star Insurance filed this action seeking a declaratory judgment
concerning its liability under an insurance policy. Doc. 1. A related
previously removed by Star to this court, but has now been remanded
to state court. See Rudzik, et al. v. Star Insurance Co., et al., No.
14-1421-MLB (D. Kan.). The facts relevant to the pending motions were
set forth by the court in the remand order of April 28, 2015, in Case
No. 14-1421 (Doc. 28), and will not be repeated here.
Defendants argue the court should stay or dismiss this federal
action and should allow the pending state action to proceed. They urge
the court to do so based on its discretion under the Declaratory
Judgment Act or based upon the abstention doctrine of Colorado River
Water Conservation Dist. v. United States, 424 U.S. 800 (1976).
The Declaratory Judgment Act provides that in an actual case or
controversy within its jurisdiction, and upon an appropriate pleading,
a court of the United States “may declare the rights and other legal
relations of any interested party seeking such declaration,...” 28
U.S.C. § 2201(a). As the word “may” suggests, the Act confers on
federal courts “unique and substantial discretion in deciding whether
to declare the rights of litigants.” Wilton v. Seven Falls Co., 515
U.S. 277, 286 (1995). “Consistent with the nonobligatory nature of the
remedy, a district court is authorized, in the sound exercise of its
discretion, to stay or to dismiss an action seeking a declaratory
judgment before trial or after all arguments have drawn to a close.
In the declaratory judgment context, the normal principle that federal
courts should adjudicate claims within their jurisdiction yields to
considerations of practicality and wise judicial administration.”
Wilton, 515 U.S. at 288.
The Supreme Court has long recognized this discretionary aspect.
In Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942), it
upheld a district court’s dismissal of a declaratory judgment action
in the face of a parallel state action, noting: “Ordinarily it would
be uneconomical as well as vexatious for a federal court to proceed
in a declaratory judgment suit where another suit is pending in a
state court presenting the same issues, not governed by federal law,
between the same parties. Gratuitous interference with the orderly and
comprehensive disposition of a state court litigation should be
avoided.” Brillhart, 316 U.S. at 495.
The Tenth Circuit provides the following factors to weigh in
considering whether to hear a declaratory judgment action:
 whether a declaratory action would settle the
controversy;  whether it would serve a useful
purpose in clarifying the legal relations at
issue;  whether the declaratory remedy is
being used merely for the purpose of “procedural
fencing” or “to provide an arena for a race to
res judicata ”;  whether use of a declaratory
action would increase friction between our
federal and state courts and improperly encroach
upon state jurisdiction; and  whether there is
an alternative remedy which is better or more
State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 983 (10th Cir.
The court’s consideration of these factors leads it to conclude
that the federal declaratory judgment action should not proceed. (1)
A decision in this action would not completely settle the controversy,
because the action pending in state court includes additional claims
and parties not joined in this action. These additional claims deal
with state law issues on which the Kansas courts have not yet ruled.
(2) A declaratory judgment would clarify the parties’ relations, but
it would add nothing beyond -- and in fact would do less -- than what
a disposition of the parallel state case would do. The claims asserted
by Star in this action are duplicated in their entirety in the
parallel state action. (3) There has been a bit of procedural fencing
going on here, with each side acting with a view toward obtaining its
preferred forum. The court finds nothing improper in this fact and
attaches no significant weight to it one way or the other. Whether
Star “won a race to the courthouse,” as defendants suggest, or whether
defendants failed to file sooner in state court because they were
waiting for the underlying Grant County judgment to become final, as
Star argues, is not really material. The two actions were filed within
a matter of weeks of one another following related litigation in the
state court that lasted for an extended period. (4) Given the
extensive history of related litigation in the state court, the
familiarity of the state judge with the past and present litigation,
and the fact that both pending actions are based entirely on state
unnecessarily interfere with state jurisdiction. Cf. Wilton, 515 U.S.
at 283 (“where another suit involving the same parties and presenting
opportunity for ventilation of the same state law issues is pending
in state court, a district court might be indulging in ‘[g]ratuitous
interference,’ if it permitted the federal declaratory action to
proceed.”). (5) The state court appears to provide an adequate and
appropriate arena for the dispute. Under all of the circumstances, the
court concludes that the state court provides a better and more
effective forum for complete resolution of this controversy.
When a district court declines to exercise jurisdiction under the
Act, it has discretion to determine whether a stay or dismissal of the
federal action is the appropriate remedy. See United States v. City
of Las Cruces, 289 F.3d 1170, 1192 (10th Cir. 2002). A stay may be the
preferred remedy where the possibility of a return to federal court
remains, if there is a significant possibility of delay or other
procedural inadequacy in the state proceedings, or if the application
of a time bar could prevent a dismissed federal action from being
circumstances is present. The briefs and the record suggest no reason
why the case would return to federal court or why the matter cannot
be adequately and expeditiously handled in state court. Nor is any
prejudice from dismissal of the federal action identified by Star or
apparent from the record. The court concludes that the appropriate
remedy in these circumstances is to dismiss the federal action without
Defendants’ Motion to Dismiss or Stay (Doc. 6) is granted. The
action (No. 14-1368) is hereby dismissed without prejudice.
Star’s Motion to Consolidate (Doc. 10) is denied as moot.
IT IS SO ORDERED.
Dated this 28th
day of April 2015, at Wichita, Kansas.
Monti L. Belot
UNITED STATES DISTRICT JUDGE
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