Smitty's Supply, Inc. v. Hegna

Filing 363

ORDER AND REASONS: IT IS HEREBY ORDERED that 244 Motion to Dismiss Smitty's Supply, Inc.'s Declaratory Judgment Claim is GRANTED, and the declaratory judgment claim is dismissed. Signed by Judge Mary Ann Vial Lemmon on 3/8/2019. (Reference: All Cases)(ajn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SMITTY'S SUPPLY, INC.

CIVIL ACTION

VERSUS

NO: 16-13396 C/W 174711 C/W 17-7191

LINDSAY MORGAN HEGNA

SECTION: "S" (3)

ORDER AND REASONS
IT IS HEREBY ORDERED that the Motion to Dismiss Smitty's Supply, Inc.'s
Declaratory Judgment Claim (Rec. Doc. 244), filed by Lindsay Morgan Hegna, is
GRANTED, and the declaratory judgment claim is dismissed.
BACKGROUND
Detailed facts related to this case have been set forth extensively in prior orders of the
court, and are hereby incorporated by reference and will not be restated. For purposes of the
present motion, the following facts are sufficient.
On June 30, 2016, Smitty's Supply, Inc. ("Smitty's") filed its Petition for Declaratory
Judgment in Louisiana state court. In its petition, Smitty's sought
a judgment declaring that no obligation was created under any contract or
agreement between Smitty's and Hegna that obligated Smity's to adopt, establish
or fund a Phantom Stock Plan and/or a SARs Stock Plan and include Hegna as a
plan participant any such plan prior to the date of the termination Hegna's
employment with Smitty's, and that Hegna has to rights to the value of any stock
under any such plan. . . ." 1

1

Smitty's Petition for Decl. Judgment, Rec. Doc. 1-1, ¶ 3.

On the same date, Hegna filed her own lawsuit in federal court in the Eastern District of
Pennsylvania. In her Complaint, she alleges, inter alia, that she "entered an oral employment
contract with the Defendants," pursuant to which she "had a vested interest in the Company's
Phantom Stock Plan and SARs Plan."2
Eventually, Smitty's petition was removed to this court,3 and Hegna's Pennsylvania action
was transferred and consolidated with it.4 Also consolidated was a similar claim filed by another
former Smitty's executive.5 In the instant motion, Hegna seeks to dismiss Smitty's declaratory
judgment claim pursuant to Federal Rule 12(c).
APPLICABLE LAW
Rule 12(c) Standard
"The standard for dismissal under Rule 12(c) is the same as that for dismissal for failure
to state a claim under Rule 12(b)(6).” Chauvin v. State Farm & Cas. Co., 495 F.3d 232, 237 (5th
Cir. 2007). “To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts
to state a claim to relief that is plausible on its face.” In re Katrina Canal Breaches Litig., 495
F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atlantic v. Twombly, 127 S. Ct. 1955, 1964-65 &
1973 n.14 (2007)). “Factual allegations must be enough to raise a right to relief above the
speculative level, on the assumption that all the allegations in the complaint are true (even if

2

Hegna's Complaint, ¶¶ 23-24.

3

Civil Action 16-13396, Smitty's v. Hegna (now lead case).

4

Civil Action 17-7191, Hegna v. Smitty's Supply, Inc.

5

Civil Action 17-4711, Kelley v. Smitty's Supply, Inc.
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doubtful in fact).” Id. at 1965. The court “must accept all well-pleaded facts as true and view
them in the light most favorable to the non-moving party.” In re S. Scrap Material Co., LLC, 541
F.3d 584, 587 (5th Cir. 2008). A district court may consider only the contents of the pleading
and the attachments thereto. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.
2000) (citing FED. R. CIV. P. 12(b)(6)).
Declaratory Judgment
The Declaratory Judgment Act provides: “In a case of actual controversy within its
jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). The Declaratory
Judgment Act is “an authorization, not a command.” Pub. Affairs Assocs., Inc. v. Rickover, 369
U.S. 111, 112 (1962); see also, Soc'y of Separationists, Inc. v. Herman, 959 F.2d 1283, 1287 (5th
Cir. 1992). Thus, federal courts have wide discretion to grant or deny declaratory judgment. See
Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). Numerous cases have held that dismissal of
declaratory judgment claims is appropriate where they are duplicative of legal claims. See, e.g.,
Veal v. Wells Fargo Bank. N.A., 2016 WL 6024534, *6 (E.D. La. 10/14/16); Narvaez v.
Wilshire Credit Corp., 757 F. Supp. 2d 621, 636 (N.D. Tex. 2010); Kougl v. Xspedius Mgmt.
Co. of DFW, LLC., 2005 WL 1421446, at *4 (N.D. Tex. June 1, 2005)(denying as redundant a
declaratory judgment claim seeking contract interpretation where this would be resolved as part
of breach of contract action); accord, Steele v. Green Tree Servicing, L.L.C., 2010 WL 3565415,
at *10 (N.D. Tex. Sept. 7, 2010), aff'd, 453 F. App'x 473 (5th Cir. 2011); Landscape Design and
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Constr., Inc. v. Transport Leasing/Contract, Inc., 2002 WL 257573, at *11 (N.D. Tex.2002)
(dismissing declaratory judgment action that sought resolution of substantive claims that were
already basis of lawsuit).
Initially, the court observes that the declaratory judgment sought is partially moot,
because the parties have agreed and acknowledged that Smitty's never implemented the stock
plans. Also, the declaratory judgment is directed solely to Hegna, and its resolution would thus
not terminate this action.
Most importantly, the judgment sought is duplicative of the substantive legal claims. The
central issue in this controversy is whether Smitty's entered into an enforceable agreement with
Kelley and/or Hegna to establish certain stock plans and designate them as participants.
Resolution of the breach of contract claims will resolve the issues raised in the declaratory
judgment action. The declaratory judgment sought is therefore redundant and subject to
dismissal.
With respect to Smitty's argument that the court should deny Hegna's request to dismiss
the declaratory judgment claim, the court notes that this matter is now in an entirely different
posture, presenting different considerations, than when this issue was previously raised, and
these consolidated matters were pending in separate courts. At that juncture, the court's inquiry
was focused on whether to exercise judicial discretion to issue declaratory relief given the
pending Pennsylvania case. These considerations are no longer pertinent. Instead, all of the
related actions are pending before this court, and Smitty's declaratory judgment claim is
duplicative of the substantive claims. Accordingly,
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IT IS HEREBY ORDERED that the Motion to Dismiss Smitty's Supply, Inc.'s
Declaratory Judgment Claim (Rec. Doc. 244), filed by Lindsay Morgan Hegna, is
GRANTED, and the declaratory judgment claim is dismissed.

8th
New Orleans, Louisiana, this _____ day of March, 2019.

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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