Allstate Indemnity Company v. Logan et al

Filing 46

ORDER denying 26 Motion to Dismiss. Signed by District Judge Sharion Aycock on 5/20/2016. (dbm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION

ALLSTATE INDEMNITY CO.

PLAINTIFF

V.

CIVIL ACTION NO. 4:16-CV-7-SA-DAS

ALEXIS LOGAN,
UNION INSURANCE CO., and
S AND E, INC.

DEFENDANTS
ORDER

Now before the Court is Alexis Logan’s Motion to Dismiss pursuant to the BrillhartWilton abstention doctrine [26]. Union Insurance Co. joined in the Motion [37]. With the
briefing now complete, and after considering the relevant arguments, rules, and authorities, the
Court finds as follows.
Factual and Procedural Background
Defendant Logan leased a residence from S and E, Inc. and obtained a renter’s insurance
policy from Plaintiff Allstate. S and E’s interest in the residence was insured by Union. After a
fire substantially damaged the residence, Union paid $75,000 to S and E, the full amount of their
policy. On December 11, 2015, Union filed a subrogation claim against Logan in state court
alleging that her negligence caused the fire.
On January 15, 2016, Allstate filed this declaratory judgment action requesting that this
Court determine the extent of coverage and obligations, if any, to Logan, Union, and S and E
under the renter’s policy. Allstate alleges, inter alia, that it has no obligation under the renter’s
policy because Logan intentionally set the fire and made other material misrepresentations in the
claims process thereby voiding the policy.

On March 9, 2016, Logan filed a third party complaint against Allstate in the state court
action. On March 23, 2016, Logan filed an answer and counterclaim in this federal case. Logan’s
counterclaim, which is virtually identical to her third-party complaint in state court, includes
requests for declaratory relief, specifically that the renter’s policy is valid, and coercive relief and
damages including enforcement of the policy, breach of contract, bad faith refusal to provide
coverage, and tortious breach of contract. At this time, Allstate has not been served with process
in the state court action.
Analysis and Discussion
In the instant motion, Logan argues that the Court has, and should exercise, the discretion
to abstain from hearing a declaratory judgment action when a similar action is pending in state
court under the Brillhart-Wilton doctrine. Allstate opposes abstention, and the parties have
briefed and argued the factors relevant to the doctrine. See St. Paul Ins. Co. v. Trejo, 39 F.3d
585, 590-91 (5th Cir. 1994) (enumerating factors).
The Court acknowledges that district courts may have discretion under the Declaratory
Judgment Act to abstain from exercising jurisdiction in certain cases when similar litigation is
pending in state court. See 28 U.S.C.A. § 2201 (a) (stating in part “[a]ny 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”) (emphasis added); Trejo, 39 F.3d at 590-91.
It is well settled in the Fifth Circuit that abstention under the Brillhart-Wilton doctrine is
inappropriate in cases that contain claims for coercive relief and damages in addition to
declaratory relief. Am. Guarantee & Liab. Ins. Co. v. Anco Insulations, Inc., 408 F.3d 248, 25152 (5th Cir. 2005). This includes requests for coercive relief and damages contained in
counterclaims, so long as the request for other relief is neither frivolous nor is made solely to

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avoid application of the Brillhart-Wilton doctrine. New England Ins. Co. v. Barnett, 561 F.3d
392, 397 (5th Cir. 2009); Am. Guarantee, 408 F.3d at 251-52.
Logan’s counterclaims appear facially, to be relevant and directly related to the issues
presented by Allstate. It does not appear from the record that Logan’s counterclaims were
brought specifically to defeat abstention, particularly in light of the fact that Logan is the party
moving for abstention.
For these reasons, the Court finds that abstention under the Brillhart-Wilton doctrine is
inappropriate in this case, and Defendant Logan’s Motion to Dismiss is DENIED.

SO ORDERED on this the 20th day of May, 2016.
__/s/_Sharion Aycock_______________
UNITED STATES DISTRICT JUDGE

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