SCHODLE v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Filing 9

MEMORANDUM AND ORDER THAT THE MOTION OF PLAINTIFF MATTHEW SCHODLE TO REMAND THIS ACTION TO THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY, PENNSYLVANIA IS DENIED; ETC.. SIGNED BY HONORABLE HARVEY BARTLE, III ON 3/30/17. 3/30/17 ENTERED AND E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
MATTHEW SCHODLE
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY

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CIVIL ACTION

NO. 17-407

MEMORANDUM
Bartle, J.

March 30, 2017
Plaintiff Matthew Schodle has moved to remand this

action to the Court of Common Pleas of Philadelphia County,
Pennsylvania.
Schodle originally brought this action in the state
court against his insurer, defendant State Farm Mutual
Automobile Insurance Company.

State Farm subsequently removed

the case to this court pursuant to the court’s diversity
jurisdiction.

Schodle is a citizen of Florida, while State Farm

is incorporated in and has its principal place of business in
Illinois.

The amount in controversy exceeds $75,000, exclusive

of interest and costs.

See 28 U.S.C. § 1332.

Schodle’s complaint asserts two claims for relief, one
for declaratory judgment and the second for breach of contract.
His claims arise out of a March 23, 2014 motor vehicle accident
during which Schodle was injured while he was a passenger in a
vehicle operated by Jason Keyser.

Schodle settled with Keyser

for Keyser’s policy limits.

Schodle now seeks additional

compensation pursuant to the underinsured provisions of his
parents’ State Farm personal automobile insurance policies under
which he is an insured.
There were two State Farm personal automobile
insurance policies in effect at the time of the accident.

The

first policy was issued to the plaintiff’s father, Robert H.
Schodle, and the second policy was issued to the plaintiff’s
father and mother, Robert H. Schodle and Rita Marie Schodle. 1
According to the complaint, the plaintiff’s father had also
executed a form entitled “Pennsylvania Underinsured Motorist
Coverage (Acknowledgment of Coverage Selection).”

This form

purports to limit the amount of coverage available to an insured
with regard to one of the two insurance policies.

However, the

section of the form identifying which of the two policies it
references appears to be illegible.
According to the complaint, State Farm takes the
position that the form signed by the plaintiff’s father limits
recovery to $130,000.

Although Schodle concedes that the form

must apply to one of the insurance policies, he asserts that
because it is illegible it must be construed in his favor as the
insured.

Thus, he avers that the form should be applied so as

1. At the time of accident, Matthew Schodle lived with his
parents.
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to allow him to recover up to $215,000. 2

In Count One of his

complaint, Schodle seeks a declaratory judgment that he is
entitled to recover $215,000 in underinsured motorist benefits
under the insurance policies.

In Count Two, Schodle asserts a

claim for breach of contract in which he seeks an award of
compensatory damages under the insurance policies.
Schodle argues that we should remand this case to the
Court of Common Pleas of Philadelphia County.

He contends that

we should decline to exercise jurisdiction over this cause of
action because his complaint includes a claim seeking a
declaratory judgment that he is entitled to recover up to
$215,000 in addition to a claim for breach of contract seeking
$215,000 in damages.

In response, State Farm argues that Count

One of the complaint is not a proper claim for declaratory
judgment and that remand is not appropriate because the district
court is required to exercise jurisdiction over the breach of
contract claim.
As a “general rule [ ] ‘federal courts have a strict
duty to exercise the jurisdiction that is conferred upon them by
Congress.’”

See Reifer v. Westport Ins. Corp., 751 F.3d 129,

134–35 (3d Cir. 2014) (quoting Quackenbush v. Allstate Ins. Co.,
517 U.S. 706, 716 (1996)).

However, the Declaratory Judgment

2. At various points in the complaint, the plaintiff states
that he is entitled to recover $210,000 rather than $215,000.
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Act provides that a federal court “may declare the rights and
other legal relations of any interested party seeking such
declaration, whether or not further relief is or could be
sought.”

See 28 U.S.C. § 2201.

Thus, the Declaratory Judgment

Act makes an exception to the general rule and grants federal
courts discretion to decline to exercise jurisdiction over a
claim for declaratory relief under certain circumstances.

See

Rarick v. Federated Serv. Ins. Co., ___ F.3d ___, 2017 WL
1149099, at *1 (3d Cir. Mar. 28, 2016) (citing Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 817 (1976);
Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942)).
Within the last few days, our Court of Appeals has
“h[e]ld that the independent claim test is the applicable legal
standard for review of a complaint that seeks both legal and
declaratory relief.”

See id. at *5.

This test provides:

When a complaint contains claims for both
legal and declaratory relief, a district
court must determine whether the legal
claims are independent of the declaratory
claims. If the legal claims are
independent, the court has a “virtually
unflagging obligation” to hear those claims,
subject of course to Colorado River’s
exceptional circumstances. Colo. River,
424 U.S. at 817–19. If the legal claims are
dependent on the declaratory claims,
however, the court retains discretion to
decline jurisdiction of the entire action,
consistent with our decision in Reifer,
751 F.3d at 144–46.

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Id. at *4.

“Non-declaratory claims are ‘independent’ of a

declaratory claim when they are alone sufficient to invoke the
court’s subject matter jurisdiction and can be adjudicated
without the requested declaratory relief.”

Id. (quoting R.R.

St. & Co., Inc. v. Vulcan Materials Co., 569 F.3d 711, 715 (7th
Cir. 2009)).

If the claims are independent, the district court

must retain jurisdiction over the non-declaratory claim unless
the exceptional circumstances set forth in Colorado River apply.
See id.

Generally, the court should retain jurisdiction over

the entire matter to avoid piecemeal litigation.

See id.

The exceptional circumstances warranting abstention in
Colorado River “rest on considerations of ‘(w)ise judicial
administration, giving regard to conservation of judicial
resources and comprehensive disposition of litigation.’”

See

Colo. River, 424 U.S. at 817 (quoting Kerotest Mfg. Co. v. C-OTwo Fire Equip. Co., 342 U.S. 180, 183 (1952)).

Those

circumstances “permit[ ] the dismissal of a federal suit due to
the presence of a concurrent state proceeding for reasons of
wise judicial administration” after weighing “such factors as
the inconvenience of the federal forum, . . . the desirability
of avoiding piecemeal litigation, . . . and the order in which
jurisdiction was obtained by the concurrent forums.”
817–18 (citations omitted).

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See id. at

Turning to the case before us, the motion to remand
must be denied.

The non-declaratory breach of contract claim is

independent of the declaratory judgment claim inasmuch as it is
alone sufficient to invoke subject matter jurisdiction and can
be adjudicated even if the claim for declaratory judgment was to
be dismissed.

The breach of contract claim is the essence of

this lawsuit.

The insured surely wants monetary relief, not

simply a declaration of his rights.

The case before us is

somewhat unusual in that it is the insured, rather than the
insurer, who seeks declaratory relief.

It is puzzling that he

has brought this extraneous claim which really adds nothing to
his case.

We need not decide if it is an effort at artful

pleading designed to defeat federal jurisdiction.
We further find that the exceptional circumstances set
forth in Colorado River do not exist here.
424 U.S. at 817-19.

See Colo. River,

There is no concurrent state court

proceeding, the federal forum does not unduly inconvenience the
parties, and this litigation will not proceed in a piecemeal
fashion.
Accordingly, the motion of plaintiff Matthew Schodle
to remand this action to the Court of Common Pleas of
Philadelphia County will be denied.

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