Nationwide Property & Casualty Insurance Company v. Polk et al
Filing
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MEMORANDUM OPINION AND ORDER denying 19 Motion for Abstention. Signed by District Judge Halil S. Ozerden on February 2, 2015. (NM)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
NATIONWIDE PROPERTY &
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CASUALTY INSURANCE COMPANY §
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v.
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JAMEILYA POLK; FOCUS
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CONSTRUCTION, LLC; SEAN
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PEDERSON; ABC INDIVIDUALS;
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And XYZ ENTITIES
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PLAINTIFF
CIVIL NO.: 1:14cv136-HSO-RHW
DEFENDANTS
MEMORANDUM OPINION AND ORDER DENYING
MOTION FOR ABSTENTION
Before the Court is the Motion for Abstention [19] filed by Defendant
Jameilya Polk. Plaintiff Nationwide Property & Casualty Insurance Company has
filed a Response [26], and Polk has filed a Rebuttal [30]. Having considered the
parties’ submissions, the record, and relevant legal authorities, the Court is of the
opinion that the Motion [19] should be denied.
I. BACKGROUND
On May 8, 2013, Defendant Jameilya Polk (“Polk”) filed a complaint in the
County Court of Jackson County, Mississippi, naming Defendant Focus
Construction, LLC (“Focus”) and “Unknown Insurance Company ABC” as
defendants (“the Underlying Litigation”). Mot. for Abstention 1-2 [19]. In the
Underlying Litigation, Polk alleges that she contracted with Focus to construct
Polk’s residence but that Focus was negligent in the construction of the residence.
Polk advances claims for breach of warranty, breach of contract, negligence, and
private nuisance against Focus and a claim for declaratory relief against “Unknown
Insurance Company ABC.” Id. at 2. At some point after learning that Nationwide
Property & Casualty Insurance Company (“Nationwide”) had issued an insurance
policy (“the Policy”) to Focus, Polk claims she “expressed the need to amend her
[c]omplaint to officially name Nationwide” as a defendant in the Underlying
Litigation. Id. Polk claims that before she could do so, Nationwide filed the
Complaint in this case seeking a declaration as to its obligations to Focus with
respect to the claims Polk has asserted against Focus. Id. at 2-3; Complaint 3 [1].1
Polk now asks this Court to abstain from exercising jurisdiction over
Nationwide’s declaratory judgment action on grounds that abstention is appropriate
in this case based on Brillhart v. Excess Insurance Company of America, 316 U.S.
491, 494-97 (1942). Mem. in Supp. of Mot. for Abstention 2-5 [20]. Polk further
posits that Nationwide’s request for injunctive relief is frivolous such that the Court
should not consider the more stringent abstention analysis set forth in Colorado
River Water Conservation District v. United States, 424 U.S. 800, 817-18 (1976). Id.
at 5-6. Nationwide responds that it has asserted a valid request for injunctive relief
in addition to declaratory relief, making the Colorado River analysis applicable to
this case and, under this standard, abstention is not warranted. Mem. in Resp. to
Mot. for Abstention 5-8 [27].2
The record reflects that, to date, Polk has not formally added Nationwide as a party to the
Underlying Litigation.
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Polk states that the Colorado River analysis should not apply to this case, but she has not
submitted any argument analyzing the Colorado River factors in the event that decision does control.
See Mem. in Supp. of Mot. for Abstention 4-6 [20].
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II. DISCUSSION
A.
The Proper Standard for Determining Whether Abstention Applies
The Fifth Circuit Court of Appeals recognizes two distinct standards for
determining whether a court should abstain from hearing a particular case. “When
a district court is considering abstaining from exercising jurisdiction over a
declaratory judgment action, it must apply the standard derived from Brillhart[,]”
316 U.S. at 494-97. New England Ins. Co. v. Barnett, 561 F.3d 392, 394 (5th Cir.
2009) (citation omitted). “[W]hen an action involves coercive relief,3 the district
court must apply the abstention standard set forth in Colorado River[,]” 424 U.S. at
817. Id. at 395-96. “[T]he only potential exception to this general rule arises when
a party’s request for injunctive relief is either frivolous or is made solely to avoid
application of the Brillhart standard.” Black Sea Inv., Ltd. v. United Heritage
Corp., 204 F.3d 647, 652 (5th Cir. 2000) (citing PPG Industries, Inc. v. Continental
Oil Co., 478 F.2d 674, 679 (5th Cir. 1973)). Because the abstention issue must be
evaluated under different standards depending on whether the action includes a
nonfrivolous request for coercive relief that is not made solely to avoid Brillhart, the
Court must first determine whether this action involves such a request. Id. (“When
a party seeks both injunctive and declaratory relief, the appropriateness of
abstention must be assessed according to the doctrine of Colorado River[] . . . .”).
“Coercive relief” is defined as “[j]udicial relief, either legal or equitable, in the form of a
personal command to the defendant that is enforceable by physical restraint.” Black’s Law
Dictionary 1317 (8th ed. 2004). “Coercive relief includes suits seeking injunctions as well as suits
seeking damages.” Chaffee McCall, LLP v. World Trade Ctr. of New Orleans, No. Civ. A. 08-4432,
2009 WL 322156, at *5 (E.D. La. Feb. 9, 2009) (quoting Woodward v. Sentry Select Ins. Co., No. Civ.
A. 03-2481, 2004 WL 834634, *2 (E.D. La. April 6, 2004)).
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In its Complaint, Nationwide seeks both declaratory and injunctive relief.
See Compl. 16-17 [1] (requesting that the Court “[e]njoin . . . Defendants from either
initiating or prosecuting a suit or any other action, including any post-judgment
remedial action or garnishment against [Nationwide], or one another, until such
time as this Court declares the rights and duties of the parties requested above”).
Polk recognizes that Nationwide requests injunctive relief, but Polk relies on a
conclusory assertion that Nationwide’s motive behind including a claim for
injunctive relief is simply to avoid the application of Brillhart. Mem. in Supp. of
Mot. for Abstention 5-6 [20]. There is no evidence in the record that Nationwide’s
claim for injunctive relief was filed in an effort to avoid Brillhart. Because claims
seeking to enjoin prospective state court proceedings are permissible, Polk has not
demonstrated that Nationwide’s claim for injunctive relief is frivolous.4
Nationwide’s request for injunctive relief is nonfrivolous and the Court finds that
the Colorado River factors control the resolution of Polk’s Motion [19].
B.
Abstention is Not Warranted Under the Colorado River Analysis
“Generally, as between state and federal courts, the rule is that ‘the pendency
of an action in the state court is no bar to proceedings concerning the same matter
in the Federal court having jurisdiction . . . .’” Colorado River, 424 U.S. at 817
While it is true that injunctions which operate to completely resolve or otherwise dispose of
claims pending in a state court may be improper, Nationwide’s request for an injunction does not
expressly seek to enjoin the Underlying Litigation or to resolve Polk’s claims in that action, nor does
Nationwide argue for such an injunction in its Response [27] to Polk’s Motion for Abstention [19].
See GuideOne Specialty Mut. Ins. Co. v. Missionary Church of Disciples of Jesus Christ, 687 F.3d
676, 681 (5th Cir. 2012); Mem. in Resp. to Mot. for Abstention 15 n.6 [27] (“Nationwide only seeks an
injunction as to any potential recovery from Nationwide upon a finding that there is no coverage
under” the Policy.).
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(quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)). Abstention under the
Colorado River analysis represents an “extraordinary and narrow exception” to the
“virtually unflagging obligation of the federal courts to exercise the jurisdiction
given them.” Id. at 813, 817. “[A] district court may abstain from a case only under
‘exceptional circumstances.’” Stewart v. W. Heritage Ins. Co., 438 F.3d 488, 491 (5th
Cir. 2006) (citing Colorado River, 424 U.S. at 813).
In deciding whether “exceptional circumstances” exist, the Supreme
Court identified six relevant factors:
1) assumption by either court of jurisdiction over a res, 2)
relative inconvenience of the forums, 3) avoidance of
piecemeal litigation, 4) the order in which jurisdiction was
obtained by the concurrent forums, 5) to what extent
federal law provides the rules of decision on the merits,
and 6) the adequacy of the state proceedings in protecting
the rights of the party invoking federal jurisdiction.
Id. (citation omitted). When “assessing the propriety of abstention according to
these factors, a federal court must keep in mind that ‘the balance [should be]
heavily weighted in favor of the exercise of jurisdiction.’” Black Sea, 204 F.3d at
652 (citation omitted) (alteration in original). A balancing of each of the six factors
based on the particular facts of this case weighs against abstention.
1.
Assumption by Either Court of Jurisdiction Over a Res
The first Colorado River factor weighs against abstention because this case
does not involve any res over which either this Court or the state court in the
Underlying Litigation has taken control. See id. at 650 (noting that “the absence of
[the first Colorado River factor] weighs against abstention”).
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2.
The Relative Inconvenience of the Forum
Both the federal courthouse and the county court in which Polk filed the
Underlying Litigation are located approximately thirty minutes from Polk’s home
which is at the center of the dispute between Polk and Focus. This factor thus
weighs against abstention. See Murphy v. Uncle Ben’s, Inc., 168 F.3d 734, 738 (5th
Cir. 1999) (finding this factor weighed against abstention where the federal and
state court suits were both in “south Texas” and there was no dispute that this
factor was inapplicable).
3.
The Avoidance of Piecemeal Litigation
Courts recognize a difference between duplicative litigation and piecemeal
litigation. Duplicative litigation “is a necessary cost of our nation’s maintenance of
two separate and distinct judicial systems . . . .” Black Sea, 204 F.3d at 650
(citation omitted). “The real concern . . . is the avoidance of piecemeal litigation,
and the concomitant danger of inconsistent rulings with respect to a piece of
property.” Id. at 651-52. Where “no court has assumed jurisdiction over a disputed
res, there is no such danger[,]” and this factor is viewed as weighing against
abstention. Id. at 652. Because neither this Court nor the state court in which the
Underlying Litigation is pending have “assumed jurisdiction over a disputed res,”
the third Colorado River factor weighs against abstention.
4.
The Order in Which Jurisdiction Was Obtained by the Concurrent
Forums
The decisive issue with respect to this Colorado River factor is not “which
complaint was filed first, but rather how much progress has been made in the two
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actions.” Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 21 (1983).
While the record indicates that the parties have conducted written discovery in the
Underlying Litigation, there is no indication that any depositions have yet been
taken. Mot. for Abstention 2 [19]. Although Polk has filed a motion seeking leave
to amend the complaint in the Underlying Litigation to add Nationwide as a party,
the record indicates that Polk has not set her motion for a hearing. Mem. in Resp.
to Mot. for Abstention 4 n.1 [27]. The record further demonstrates that after
Nationwide filed the Complaint [1], the parties agreed to a stay of the case in this
Court pending resolution of Polk’s Motion [19]. Minute Entry July 1, 2014. The
Court thus finds that this factor weighs in favor of abstention. Murphy, 168 F.3d at
738 (“[A] factor favoring dismissal of a federal suit is ‘the apparent absence of any
proceedings in the District Court, other than the filing of the complaint.’”) (quoting
Colorado River, 424 U.S. at 820).
5.
Whether and to What Extent Federal Law Provides the Rules of
Decision on the Merits
The parties do not dispute that this case turns on interpretation of
Mississippi law. However, “[t]he absence of a federal-law issue does not counsel in
favor of abstention . . . .” Evanston Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1193 (5th
Cir. 1988) (citation omitted). The Court’s task “is not to find some substantial
reason for the exercise of federal jurisdiction . . . ; rather, the task is to ascertain
whether there exist ‘exceptional’ circumstances[] . . . to justify the surrender of that
jurisdiction.” Moses H. Cone, 460 U.S. at 25-26 (citation omitted). Coverage
disputes undoubtedly turn on state contract law and there is nothing in the record
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to suggest that this case includes such “exceptional circumstances” as to justify the
Court’s surrender of jurisdiction. This factor weighs against abstention. See Jimco,
Inc., 844 F.2d at 1193 (finding that this factor weighed against abstention because
the “case [did] not involve rare circumstances under which the presence of
controlling issues of [state] law might make abstention appropriate”).
6.
The Adequacy of State Proceedings in Protecting the Rights of the
Party Invoking Federal Jurisdiction
Nationwide does not “claim that its interests may not be adequately protected
in state court . . . .” Mem. in Resp. to Mot. for Abstention 19 [27]. However, this
factor “can only be ‘a neutral factor or one that weighs against, not for, abstention.’”
Murphy, 168 F.3d at 739 (quoting Jimco, Inc., 844 F.2d at 1193). The Court thus
finds that this factor is neutral. Black Sea, 204 F.3d at 651.
III. CONCLUSION
Having considered the Colorado River factors, the Court finds that one factor
weighs in favor of abstention, one factor remains neutral, and four factors weigh
against abstention. “Abstention from the exercise of federal jurisdiction is the
exception, not the rule.” Colorado River, 424 U.S. at 813. Given this fact and the
fact that the balancing of the Colorado River factors already “is heavily weighted in
favor of the exercise of jurisdiction[,]” the Court’s analysis of the Colorado River
factors reveals abstention is not warranted. Moses H. Cone, 460 U.S. at 16.
Motion [19] should be denied. Accordingly,
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Polk’s
IT IS, THEREFORE, ORDERED AND ADJUDGED that Defendant
Jameilya Polk’s Motion for Abstention [19] is DENIED.
SO ORDERED AND ADJUDGED, this the 2nd day of February, 2015.
s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE
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