Maryland Casualty Company v. Burridge et al

Filing 45

MEMORANDUM and OPINION Because this action raises only matters of "firmly established" state law and because there is no federal concern present, the Court will decline to exercise jurisdiction over this declaratory judgment action and will grant Defendants' Motions to Dismiss (Doc. 4; Doc.12). An appropriate Order follows.Signed by Honorable Robert D. Mariani on 7/2/13. (jfg)

THE UNITED STATES DISTRICT COURT
FOR IHE MIDDLE DISIRICT OF PENNSYLVANIA
MARYLAND CASUALTY CO.

Plaintiff,

v.

3:12·CV·1872
(JUDGE MARIANI)

MARTIN BURRIDGE, et aI.,

Defendants
MEMORANDUM OPINION

I. Introduction
On September 19, 2012, Plaintiff filed a declaratory judgment action with th is Court,
seeking a declaration that it owed neither a duty to defend nor to indemnify its insured,
Martin Burridge and Burridge Tent Rentals (collectively "Burridge") in an underlying
negligence action in state court1 and that it further has no obligation to afford coverage for

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punitive damages.
Presently before the Court are Motions to Dismiss from the Burridge Defendants and
the McGrath Defendants. (Doc. 4; Doc. 12). The sole basis for Defendants' motions is that
the Court should decline to exercise its jurisdiction over this declaratory judgment action
brought under 28 U.S.C. § 2201 and FED. R. CIV. P. 57.

1 The underlying state court case is captioned at McGrath v. Burridge, Court of Common Pleas, Luzerne
County, No. 10269-2012.

For the reasons set forth below, the Court will grant both motions and close the

case. 2
II. Factual Allegations
Plaintiff Maryland Casualty Company ("Maryland Casualty") is an insurance company
which issued acommercial insurance policy ("Policy") to Martin Burridge d/b/a Burridge Tent
Rental. (Complaint ("Compl."), Doc. 1, at 1Ml1, 10). At the time the policy was in effect,
Burridge was involved in an accident with a motorcyclist, Warren McGrath, while Burridge
was transporting folding tables and chairs in his pickup truck. (Id. at1Ml10, 13, 14). The
underlying state court complaint claimed that Burridge had been acting "in the course and
scope of his agency or employment with Burridge Tent Rentals," and that he "improperly

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secured his load," which caused the chairs to fall onto the road and "into the path of'

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McGrath's oncoming motorcycle. (Id. at ~~ 14, 15). McGrath's "motorcycle made contract

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[sic] with one of the chairs, which caused the motorcycle to flip" (id. at ~ 17), and as a result,

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McGrath "sustained numerous, Significant bodily injuries." (Id. at ~ 18). McGrath then sued
Burridge for negligence, punitive damages, and loss of consortium, and Burridge in turn,
"tendered the underlying action to Maryland Casualty for defense and indemnity under the
Maryland Casualty Policy." (Id. at 1Ml19, 20).
Under the terms of the Policy, coverage "does not apply to: 'Bodily injury' or 'property
damage' arising out of the ownership, maintenance, use or entrustment to others of any

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As such, Maryland Casualty's pending Motion for Summary Judgment (Doc. 18) is rendered moot.
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aircraft, 'auto' or watercraft owned or operated by or rented or loaned to any insured." (ld.
at ~ 21) ("Auto exclusion"). "Auto" is defined as "a land motor vehicle, trailer or semitrailer
designed for travel on public roads, including any attached machinery or equipment. But
'auto' does not include 'mobile equipment'." (Id.). Plaintiffs Complaint then goes on to seek
a declaration that under the Auto exclusion, the Policy does not cover Burridge's accident
with McGrath. (Id. at mr 22-33).
III. Standard on Motion to Dismiss

A complaint must be dismissed under FED. R. CIV. P. 12(b)(6), if it does not allege
"enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570,127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). The plaintiff must

aver "factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct.
1937, 1949, 173 L. Ed. 2d 868 (2009).
"Though a complaint 'does not need detailed factual allegations, ... a formulaic
recitation of the elements of a cause of action will not do. DelRio-Mocci v. Connolly Prop.
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Inc., 672 F.3d 241,245 (3d Cir. 2012) (citing Twombly, 550 U.S. at 555). In other words,

"[fjactual allegations must be enough to raise a right to relief above the speculative level."
Covington v.lnt'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013)

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(internal citations and quotation marks omitted). Acourt "take[s] as true all the factual
allegations in the Complaint and the reasonable inferences that can be drawn from those

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facts, but ... disregard[s] legal conclusions and threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements. Ethypharm S.A. France v.
Abbott Laboratories, 707 F.3d 223, 231, n.14 (3d Cir. 2013) (internal citations and quotation

marks omitted).
Twombly and Iqbal require [a district court] to take the following three

steps to determine the sufficiency of a complaint: First, the court must

take note of the elements a plaintiff must plead to state a claim. Second,

the court should identify allegations that, because they are no more than

conclusions, are not entitled to the assumption of truth. Finally, where

there are well-pleaded factual allegations, a court should assume their

veracity and then determine whether they plausibly give rise to an

entitlement for relief.

Connelly v. Steel Valley Sch. Dist., 706 F.3d 209,212 (3d Cir. 2013)

"[W]here the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged - but it has not show[n] - that the
pleader is entitled to relief." Iqbal, 556 U.S. at 679 (internal citations and quotation marks
omitted). This "plausibility" determination will be a "context-specific task that requires the
reviewing court to draw on its judicial experience and common sense." Id.
IV. Analysis

The Declaratory Judgment Act provides "[i]n acase of actual controversy within its
jurisdiction, ... any court of the United States, ... 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." 28 U.S.C. § 2201 (a) (emphasis added). 'TDJistrict courts possess
discretion in determining whether and when to entertain an action under the Declaratory

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Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional

prerequisites." Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995). The Supreme Court
has IIrepeatedly characterized the Declaratory Judgment Act as Ian enabling Act, which
confers a discretion on the courts rather than an absolute right upon the litigant."' Id. at 287
(internal citation omitted).
Third Circuit IIprecedents counsel hesitation by federal courts in exercising
jurisdiction over declaratory judgment actions when the state law involved is close or
unsettled." State Auto Ins. Co. v. Summy, 234 F.3d 131, 135 (3d Cir. 2000). Plaintiff
correctly argues that "the coverage issues being litigated are neither close nor unsettled.
There are no novel issues being litigated in, nor implicated by, this matter," and lithe instant
matter turns on purely state law." (Doc. 10, at 7,8). Plaintiff goes on to say that "the state
law at issue in the present coverage dispute is not unsettled." (Id. at 8). Yet, the Third
Circuit stated in Summy that "[w]hen the state law is firmly established, there would seem to
be even less reason for the parties to resort to the federal courts. Unusual circumstances
may occasionally justify such action, but declaratory judgments in such cases should be
rare." 234 F.3d at 136.
A district court does "not have open-ended discretion to decline jurisdiction over a
declaratory judgment action when the issues included federal statutory interpretation, the
government's choice of a federal forum, an issue of sovereign immunity, or inadequacy of
the state proceeding." Id. at 134. However, none of those concerns are present here. As

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in Summy, "[n]ot a single federal question was presented to the District Court by [Maryland
Casualty]." Id. at 136.
"The 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.;
see also Reifer v. Westport Ins. Corp., -- F. Supp. 2d --, 2013 WL 1833800, at *5 (M.D. Pa.
May 1, 2013) (declining to exercise jurisdiction "over this purely state law issue"); Hartford
Ins. Co. of the Se. v. John J., 848 F. Supp. 2d 506, 510 (M.D. Pa. 2012) (declining to
exercise jurisdiction, in part, because the absence of "a parallel state proceeding is clearly
outweighed by the lack of any federal interest in this dispute.") (citing Allstate Ins. Co. v.
Seelye, 198 F. Supp. 2d 629, 632 (W.O. Pa. 2002)); Uberty Mut. Grp. v. Thomas, 702 F.
Supp. 2d 512, 513 (E.D. Pa. 2010) ("District courts should adopt a general policy of restraint
when adeclaratory judgment action is restricted to state law and the same issues are
pending in state court.") (citing Summy, 234 F.3d at 134) (internal quotation marks omitted);
Munich Welding, Inc. v. Great Am. Ins. Co., 415 F. Supp. 2d 571, 576-77 (W.o. Pa. 2006)
("In sum, this dispute is not governed by federal law and there are no federal interests at
stake. The state law to be applied is we"-settled. There is a parallel proceeding in state
court. The state court is perfectly capable of resolving this dispute in accordance with its
own law.").3 As such, the Court will decline to exercise its jurisdiction over this matter.

3 The parties disagree as to whether the pending state court litigation is a parallel state court proceeding
which will resolve the coverage issues or whether Plaintiff will have to re-file a declaratory judgment action in state
court. (Compare Doc. 10, at 9-10 with Doc. 14, at 3). Whether or not there is a parallel state court proceeding
pending, the Court is well within its discretion to decline jurisdiction, and Plaintiff will still have a forum available to

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V. Conclusion

Because this action raises only matters of "firmly established" state law and because
there is no federal concern present, the Court will decline to exercise jurisdiction over this
declaratory judgment action and will grant Defendants' Motions to Dismiss (Doc. 4; Doc.
12). An appropriate Order follows.

Robert D.
I
United States District Judge

have its coverage issue decided. "A federal court should also decline to exercise its discretionary jurisdiction when
doing so would promote judicial economy by avoiding duplicative and piecemeal litigation." Summy, 234 F.3d at

135.

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