Fireman's Insurance Company of Washington DC v. 3 R Electric, Inc. et al

Filing 42

MEMORANDUM For all these reasons, we decline to exercise jurisdiction over this matter and dismiss this case. The litigants remain free to continue to litigate in the appropriate forum, the Luzerne County Court of Common Pleas. An appropriate Order follows. (See Memorandum)Signed by Honorable Richard P. Conaboy on 10/19/12. (cc, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
FIREMEN’S INSURANCE COMPANY OF
WASHINGTON DC,

:
:
:
Plaintiff,
:
Case No. 3:12-CV-18
:
v.
:
:
3 R ELECTRIC, INC.
:
BRIAN HARDIMAN
: (Judge Richard P. Conaboy)
JOY HARDIMAN
:
MICHAEL STASH
:
VICTORIA STASH
:
:
Defendants.
:
___________________________________________________________________
MEMORANDUM
I.

Background
On January 4, 2012, Plaintiff Firemen’s Insurance Company of

Washington DC (“Plaintiff”) filed a Complaint for Declaratory
Judgment (Doc. 1) pursuant to the Declaratory Judgments Act, 28
U.S.C. Section 2201.

There followed a months-long spate of motion

practice caused by the inability of Defendants 3 R Electric, Brian
and Joy Hardiman, and Michael and Victoria Stash (“Defendants”) to
answer or otherwise respond to the Complaint in timely fashion.1
Suffice it to say that, consistent with the legal principles that
govern whether defaults may be lifted and answers filed out of
time, this Court determined that this matter could not properly be
resolved on merely technical grounds and the parties have been

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To date, no entry of appearance has been filed on behalf of Defendant 3 R Electric, Inc.
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placed in a position where their dispute may be resolved on the
merits.

For the reasons discussed below, their dispute will be

resolved in the Pennsylvania court system.
This action arises from claims for uninsured/underinsured
motorist benefits made as a result of an automobile accident on
June 28, 2011.

In that accident, Plaintiffs Brian Hardiman and

Michael Stash sustained injuries while in the course of their
employment and operating a van owned by their employer, Defendant
3R Electric, Inc.

Plaintiff’s complaint states that Defendants

Hardiman and Stash were struck by a second vehicle whose operator
had driven it through a stop sign at the intersection of Orchard
and Cedar Avenues in Scranton, Pennsylvania.

(Doc. 1, Para. 16).

Plaintiff further informs the Court that Defendants Hardiman and
Stash are now attempting to recover uninsured/underinsured motorist
benefits from a commercial auto insurance policy issued by
Firemen’s to 3R Electric, Inc.

(Doc. 1, Para. 17).

Plaintiff’s

contention is that there is no uninsured/underinsured motorist
coverage available to Defendants pursuant to said Firemen’s policy
because those coverages were waived by one Francis R. Rogan acting
on behalf of 3R Electric, Inc.

(Doc. 1 Para. 17).

As a result of Firemen’s assertion that there is no
uninsured/underinsured motorist coverage under the applicable
policy, the Defendants Hardiman and Stash filed separate lawsuits
on or about October 17, 2011 in the Luzerne County Court of Common

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Pleas.

(Doc. 1, Para. 18).

The Luzerne County actions named

Berkely Mid-Atlantic Group, Firemen’s claim administrator, and
Richard Nichols, a Berkely Mid-Atlantic employee, as Defendants.
Firemen’s is not currently a party in the Luzerne County actions.
Defendants contend that the presumption of the existence of
uninsured/underinsured motorist coverage is strong under
Pennsylvania law and that the Pennsylvania Motor Vehicle Financial
Responsibility Law, specifically 75 PA C.S. Section 1731, provides
a specific form to be used to waive such coverage.

That form,

Defendants state, must be used without deviation or alteration.
Defendants allege that copies of Section 1731 waivers supplied by
and relied upon by Plaintiff relate to policies with different
identifying numbers. This, Defendants contend, creates a factual
question as to whether Section 1731 waivers had been executed with
respect to the Firemen’s policy in force on the date of the
Defendants’ accident.

Defendants also make numerous counterclaims

pursuant to various provisions of Pennsylvania law.

With respect

to these counterclaims, Plaintiff asserts that each must be
dismissed pursuant to the Prior Pending Action Doctrine.
II.

Discussion.
Under the Declaratory Judgment Act “[i]n a case of actual

controversy within its jurisdiction,...any court of the United
States, upon the filing of an appropriate pleading, may declare the
rights and other legal relations of any interested party seeking

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such declaration, whether or not further relief is or could be
sought.”

28 U.S.C. Section 2201 (a).

The United States Supreme

Court has declared that “[d]istrict courts possess discretion in
determining whether and when to entertain an action under the
Declaratory Judgment Act, even when the suit otherwise satisfies
subject matter jurisdictional prerequisites.”
Falls Company, 515 U.S. 277 (1995).

Wilton v. Seven

The Supreme Court explained

further that the Declaratory Judgment Act is “an enabling Act,
which confers a discretion on the courts rather than an absolute
right upon the litigant.”

Id. At 287 (internal quotations and

citations omitted).
In the Third Circuit Court of Appeals it is well established
that “‘federal courts should hesitate to entertain a declaratory
judgment action where the action is restricted to issues of state
law.’” Dixon v. Progressive Northern Insurance Company, No. 02:08CV-1010, 2008 WL 4072816, at 1 (W.D.Pa. August, 2008)(quoting
Atlantic Mutual Insurance Company v. Gula, No. 02-4160, 2003 WL
22962947, at 2 (3d. Cir. 2003) (citing State Auto Insurance
Companies v. Summy, 234 F.3d 131, 134-35 (3d. Cir. 2000).

Although

this Court “wields[s] broad and selective discretion in determining
whether to entertain a declaratory action,” James ex. Rel. James v.
Richman, 465 F. Supp. 2d 395, 407-08 (M.D.Pa. 2006)(quoting Canal
Insurance Company v. Paul Cox Trucking, No. 1:05-CV-2194, 2006 WL
2828755, at 2 (M.D.Pa., 2006) (internal quotations omitted), our

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discretion is not unfettered.

Jurisdiction should be granted when

the Court is faced with issues of “federal statutory
interpretation, the government’s choice of federal forum, an issue
of sovereign immunity, or inadequacy of a state proceeding.”
Summy, 234 F.3d at 134.

See

Finally, and importantly here, a district

court may decline jurisdiction sua sponte.2

Id. at 136.

Considering all these factors, we will exercise the discretion
afforded us under the Declaratory Judgment Act and decline
jurisdiction over this case.

The Third Circuit Court of Appeals

has noted that “[t]he desire of insurance companies and their
insureds to receive declarations in federal court on matters of
purely state law has no special call on the federal forum.”

Id.

This is more particularly so where relevant state law is “firmly
established”.

Id.

III. Conclusion.
Having thoroughly reviewed all submissions in this matter,
this Court concludes that it may not appropriately retain
jurisdiction here.

We must be mindful of the Third Circuit’s

admonition against intruding into actions that are restricted to
issues of state law.

The case law also indicates that we should be

even more reluctant to exercise jurisdiction where, as in this
case, the relevant state law is well-settled.

The parties do not

allege that any novel issue of Pennsylvania Law is implicated.

2

Defendants have not lodged any objection to proceeding in Federal Court.
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Rather, the real issue is whether the Plaintiff’s conduct conformed
to the well-established procedure for executing a valid waiver of
coverage under Pennsylvania law.

Most significantly, none of the

Summy factors are present in this case.
For all these reasons, we decline to exercise jurisdiction
over this matter and dismiss this case.

The litigants remain free

to continue to litigate in the appropriate forum, the Luzerne
County Court of Common Pleas.

An appropriate Order follows.

DATED: October 19,2012__________________
S/Richard P. Conaboy
RICHARD P. CONABOY
UNITED STATES DISTRICT COURT

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