Founders Insurance Company v. JR Spanky's LLC

Filing 16

OPINION AND ORDER by Judge John E Dowdell ; setting/resetting deadline(s)/hearing(s): ( Status Report due by 4/29/2016); denying 11 Motion to Dismiss; denying 12 Motion to Stay (lml, Dpty Clk)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
FOUNDERS INSURANCE COMPANY,
Plaintiff,
v.
JR SPANKY’S, LLC,
Defendant.

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Case No. 14-CV-604-JED-TLW

OPINION AND ORDER
Plaintiff initiated this declaratory judgment action for a determination of the rights and
obligations of the parties under an insurance policy.

Based upon the allegations of the

Complaint, the Court has subject matter jurisdiction based upon diversity. The following facts
are alleged in the Complaint and are taken as true in deciding defendant’s dismissal motion.
On June 6, 2014, a petition was filed in Ottawa County District Court on behalf of
Victoria and Reilly McLaughlin, Makailey Mitchell, and Ethan Rodgers (Underlying Plaintiffs).1
In their Petition there, Ottawa County Case No. CJ-2014-65 (Underlying Lawsuit), the
Underlying Plaintiffs sought damages for injuries arising from an automobile accident on
September 18, 2012. Among other defendants to the Underlying Lawsuit, the defendant in this
federal case – JR Spanky’s – was sued by the Underlying Plaintiffs, based upon allegations that
JR Spanky’s served alcoholic beverages to Kalom Tracy although JR Spanky’s “knew or should
have known” that Tracy was intoxicated. The Underlying Lawsuit alleged negligence and
negligence per se claims against JR Spanky’s and sought actual and punitive damages.

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Victoria McLaughlin brought the suit on behalf of Mitchell and Rodgers, who were
minors.

Founders Insurance Company, who is the plaintiff in the instant action, issued an
Oklahoma Liquor Liability Policy to JR Spanky’s. The policy had effective dates of August 15,
2012 through August 15, 2013.

Founders alleges that there is an actual and justiciable

controversy between Founders and JR Spanky’s regarding whether the policy covered the
damages claimed in the Underlying Lawsuit.
JR Spanky’s seeks dismissal, principally based upon an argument that a determination of
the matters herein would impact the Underlying Lawsuit, and the Court should thus abstain from
determining these matters. However, Founders is not a named party to the Underlying Lawsuit,
which involves negligence issues, such as whether there was a duty, a breach of duty, and
damages caused by any breach, whereas this federal action alleges a justiciable controversy
regarding insurance coverage between Founders and its insured. While the cases are in a general
sense related, the outcome of one is not dependent upon the other. Moreover, the Court takes
judicial notice that the publically-available docket for the Underlying Lawsuit indicates that it
was recently dismissed with prejudice, a further indication that the issues there did not depend
upon the issues here, or vice versa.
IT IS THEREFORE ORDERED that the dismissal motion (Doc. 11), and defendant’s
alternative request for a stay (Doc. 12) are hereby denied. The parties shall file a Joint Status
Report on or before April 29, 2016.
SO ORDERED this 31st day of March, 2016.

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