GEICO Casualty Company v. Walsh
Filing
16
ORDER. Defendant's motion to dismiss, [Doc. 4 ], is granted. Signed on 12/12/2017 by District Judge Nanette K. Laughrey. (Dickinson, Gregory)
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
GEICO CASUALTY COMPANY,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
NICOLE M. WALSH,
Defendant.
Case No. 4:17-cv-00491-NKL
ORDER
Defendant Nicole Walsh moves to dismiss Plaintiff Geico Casualty Company’s
complaint for declaratory judgment, on the basis that a parallel proceeding involving the same
parties is pending in state court.
Doc. 4.
For the following reasons, the motion to dismiss is
granted.
I.
Introduction
On February 14, 2016, Nicole Walsh was seriously injured in an automobile accident
with Adam Arbuckle. Walsh and Arbuckle subsequently entered into an agreement under
Missouri Revised Statute § 537.065, whereby Arbuckle acknowledged that he was at fault, but
the parties agreed Walsh would bring a lawsuit in Jackson County, Missouri to determine the
extent of her injuries and the value of her damages.
After obtaining a judgment, the agreement
will limit Walsh’s right to collect to any available insurance coverage, and potentially a bad faith
claim.
Walsh subsequently brought suit against Arbuckle in state court on January 9, 2017.
Walsh also had underinsured motorist coverage through her own insurer, Geico. She
filed a UIM claim after her collision with Arbuckle, and took the position that her policy, which
covers three vehicles, permits “stacking.”
Walsh asserts, therefore, that her policy has a
1
combined limit of $150,000.
In December 2016, Geico informed Walsh that it would agree to
pay $50,000, but that it believes the policy does not permit stacking. Walsh informed Geico’s
attorney that she intended to litigate the issue, and in light of the dispute, Geico filed the present
declaratory judgment action on June 15, 2017.
On July 6, 2017, Walsh moved for leave to amend the petition in her state court case
against Arbuckle, seeking to add Geico as a defendant and obtain judicial interpretation of the
insurance policy.
The next day, before that motion was granted, Walsh filed the present motion
to dismiss, arguing that the issues in this declaratory judgment action can be better settled in the
parallel state court action.
Geico responded first by noting that Walsh had not yet been granted
leave to amend her state court petition, and second that in the event Geico was added to the state
court case, it would simply remove that case to federal court and consolidate it with this
declaratory judgment action.
Walsh was subsequently granted leave to amend the petition in her state court case
against Arbuckle, and shortly thereafter Geico indeed removed it to this Court.
However,
before the Court consolidated the two cases, it determined that complete diversity did not exist
among the parties in Walsh’s lawsuit against Arbuckle. Therefore, the Court remanded that
action back to the Circuit Court of Jackson County, Missouri. See Walsh v. Arbuckle, No.
4:17-CV-00664, 2017 WL 4512586 (W.D. Mo. Oct. 10, 2017).
Geico’s declaratory judgment action against Walsh remains, and so do Walsh’s
arguments in favor of dismissal. However, Geico’s opposition brief was premised entirely on
removal of the state court case. Therefore, after it ordered remand, the Court granted Geico two
weeks to file any amendments to its opposition of this Motion to Dismiss.
file any amendment.
2
Geico declined to
II.
Discussion
Walsh argues that Geico’s declaratory judgment action should be dismissed because it
involves no matter of federal law, and because it can be more appropriately adjudicated in the
parallel state court action, which involves the same parties, policy, and coverage issue.
With respect to cases brought under the Declaratory Judgment Act, district courts possess
“unique and substantial discretion” in determining whether to hear the case, “even when the suit
otherwise satisfies subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515
U.S. 277, 282, 286 (1995); Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir. 2008)
(“[I]n a declaratory judgment action, a federal court has broad discretion to abstain from
exercising jurisdiction . . . .”).
“[T]he 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.
When determining whether to abstain from exercising jurisdiction because of a parallel
state court proceeding, the Court must consider “the scope and nature of the pending state court
proceeding,” and determine whether the issues “can be better settled by the state court.”
Capitol Indemnity Corp. v. Haverfield, 218 F.3d 872, 874 (8th Cir. 2000). “If so, the district
court must dismiss the federal action because ‘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.’” Id.
at 874-75 (quoting Brillhart v. Excess Ins. Co., 316 U.S. 491, 495 (1942)).
The threshold question in determining whether to dismiss this suit is “whether there are
parallel proceedings in state court that present an opportunity for the same issues to be
addressed.”
Atain Specialty Ins. Co. v. Frank, No. 4:12-CV-01290-NKL, 2013 WL 12145863,
3
at *3 (W.D. Mo. Mar. 25, 2013).
“Suits are parallel if substantially the same parties litigate
substantially the same issues in different forums.”
F.3d 994, 997 (8th Cir. 2005).
Scottsdale Ins. Co. v. Detco Indus., Inc., 426
Factors relevant to whether proceedings are parallel include “the
scope of the pending state court proceeding and the nature of defenses open there.” Wilton, 515
U.S. at 282–83 (quotation omitted). Evaluating these factors “entails consideration of whether
the claims of all parties in interest can satisfactorily be adjudicated in that proceeding, whether
necessary parties have been joined, whether such parties are amenable to process in that
proceeding, etc.” Id. at 283
Here, the parties and issues before the Court are identical to those that are before the state
court.
The state court case involves both Geico and Walsh, and also involves the exact same
auto policy and UIM endorsement.
Geico answered Walsh’s amended state court petition, and
asserted affirmative defenses that raise the exact same coverage issues as are raised here.
Furthermore, interpretation of the insurance contract is governed by Missouri law. Therefore,
the claims at issue in this declaratory judgment action can be more adequately resolved in state
court.1
“So long as a possibility of return to federal court remains, a stay rather than a dismissal
is the preferred mode of abstention.”
Clay Reg'l Water v. City of Spirit Lake, Iowa, 193 F.
Supp. 2d 1129, 1155 (N.D. Iowa 2002) (citing Wilton, 515 U.S. at 288 n. 2 (1995)); Haverfield,
218 F.3d at 875 n. 2 (8th Cir. 2000)).
However, where the Court “see[s] no reason for the case
to return to federal court . . . dismissal rather than a stay is appropriate.” Haverfield, 218 F.3d
1
That Geico filed its declaratory judgment action in federal court before Walsh amended her state
court petition does not preclude a finding that the Court should abstain. The Eighth Circuit has
“previously concluded that abstention was required even when the declaratory judgment action was filed
months before the state-court action.” W. Heritage Ins., Co. v. Sunset Sec., Inc., 63 Fed. Appx. 965, 967
(8th Cir. 2003); see Haverfield, 218 F.3d at 873-74 (holding that district court abused its discretion in
denying a motion to dismiss or stay a federal declaratory judgment action in favor of a parallel state court
proceeding, even though the federal action was filed several months prior to the state suit).
4
at 875 n. 2.
Walsh’s state court action has already been removed to federal court and
subsequently remanded for lack of subject matter jurisdiction.
Accordingly, the Court does not
see how this case could return to the federal courts, and therefore finds that dismissal is proper.
III.
Conclusion
For the foregoing reasons, Defendant’s motion to dismiss, Doc. 4, is granted.
s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: December 12, 2017
Jefferson City, Missouri
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?