The Phoenix Insurance Company v. Ed Boland Construction, Inc.

Filing 42

ORDER ADOPTING FINDINGS AND RECOMMENDATIONS. ; denying 19 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Brian Morris on 7/27/2016. (SLL, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION
THE PHOENIX INSURANCE
COMPANY, a Connecticut
Corporation,

CV-15-71-GF-BMM

Plaintiff,
vs.

ORDER

ED BOLAND CONSTRUCTION,
INC.,
Defendant.

The Phoenix Insurance Company (Phoenix) brought this declaratory
judgment action for a determination of its rights and obligations under a
commercial general liability policy issued by it to Defendant Ed Boland
Construction, Inc. (EBC). Phoenix seeks a ruling that it has no duty to defend or
indemnify EBC for claims Northbank Civil and Marine, Inc. has asserted against
EBC in the underlying federal lawsuit entitled Northbank Civil & Marine, LLC v.
Ed Boland Construction, Inc., CV 15-38-GF-BMM.
EBC has moved to dismiss this action. EBC argues that this Court should
decline to exercise jurisdiction based upon the factors set forth in Brillhart v. Excess
Insurance Co. of America, 316 U.S. 491 (1942).

Judge John Johnston entered Findings and Recommendations in this matter
on June 7, 2016. (Doc. 37). Judge Johnston recommended that EBC’s motion to
dismiss be denied. (Doc. 37 at 2-3). Neither party filed objections.
The Court has reviewed Judge Johnston’s Findings and Recommendations
for clear error. McDonnell Douglas Corp. v. Commodore Bus. Mach., Inc., 656
F.2d 1309, 1313 (9th Cir. 1981). The Court finds no error in Judge Johnston’s
Findings and Recommendations. The Court will adopt Judge Johnston’s Findings
and Recommendations in full.
A federal district court has discretion to dismiss a declaratory judgment
action when the question in controversy can better be settled in a pending state
court proceeding. Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1222-23 (9th
Cir. 1998). The Supreme Court, in Brillhart, identified three primary factors to be
considered by a federal court in determining whether to accept a declaratory
judgment action: (1) the federal court should avoid needless determination of state
law issues; (2) the federal court should discourage forum shopping; and (3) the
federal court should avoid duplicative litigation. See R.R. Street & Co. v. Transport
Ins. Co., 656 F.3d 966, 975 (9th Cir. 2011).
Application of these Brillhart factors confirm that this Court should retain
jurisdiction. Retaining jurisdiction over this case will not result in the needless
-2-

determination of state law issues, it will not encourage forum shopping, and it will
not result in duplicative litigation. The main issues presented in this action are: (1)
whether Phoenix has a duty to defend EBC in the underlying federal action; and (2)
whether Phoenix has a duty to indemnify EBC. Neither issue has been presented to
another court for determination.
Accordingly, IT IS ORDERED:
1.

Judge Johnston’s Findings and Recommendations (Doc. 37) are

ADOPTED in full.
2.

Defendant’s Motion to Dismiss (Doc. 19) is DENIED.

DATED this 27th day of July, 2016.

-3-