Progressive Northern Insurance Company v. Accident Insurance Company Inc et al
Filing
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ORDER denying 20 Motion to Dismiss. Signed by Honorable Joseph F Anderson, Jr on 02/22/2012.(bshr, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Progressive Northern Insurance
Company,
Plaintiff,
vs.
Accident Insurance Company, Inc;
Sharon Hudson Brown, Personal
Representative of the Estate of Carey
Richard Brown, Kenneth Fox
individually and d/b/a FoxBoy
Trucking; Joseph North; Derrick
Richard individually and d/b/a
Redcliffe Trucking, LLC; Redcliffe
Trucking, LLC;
Defendants.
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C/A No.: 3:11-cv-3002-JFA
ORDER
This matter comes before the court pursuant to defendant Brown’s motion to
dismiss (ECF No. 20). The parties have fully briefed this matter, and the court also
invited oral argument. For the reasons stated below, the court hereby denies defendant
Brown’s motion to dismiss.
I.
FACTUAL AND PROCEDURAL HISTORY
In this case, Progressive Northern Insurance Company (Progressive) seeks a
declaratory judgment as to coverage for Fox, FoxBoy trucking, and North under an
insurance policy it issued. Defendant Sharon Hudson Brown (Brown) is the plaintiff—as
personal representative of the estate of Carey Richard Brown—in a negligence action
currently pending in Orangeburg County against Kenneth Fox, FoxBoy Trucking
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(FoxBoy), and Joseph North. Brown filed the state court action after Progressive filed
this declaratory judgment action in this court. Progressive argues that it provides nontrucking liability insurance coverage for Fox, FoxBoy, and North. In the complaint,
Progressive alleges that the accident occurred as a part of FoxBoy’s trucking work and
was not covered under the policy it issued to Fox. Therefore, Progressive filed this
declaratory judgment action seeking to litigate the issue of “whether it is required by
South Carolina law to defend and indemnify Fox, FoxBoy and North for the claims
asserted by Brown in the state court action and, if so, what are the applicable limits of the
coverage Progressive must provide.” (Pl.’s Mem. Opp. to Mot. to Dismiss 2, ECF No.
21.)
Defendants Sharon Brown and Accident Insurance Company have answered. The
other defendants have not answered, and upon the plaintiff’s request, the clerk entered
default as to defendants Redcliffe Trucking, LLC; Derrick Richard; Kenneth Fox; and
Joseph North. Defendant Brown now asks this court to dismiss this action, arguing that
the court should decline to exercise its discretionary jurisdiction under the declaratory
judgment statute because South Carolina has a substantial interest in interpreting South
Carolina insurance coverage law, which is the nature of the action filed by the plaintiff.
II.
LEGAL STANDARD
Federal jurisdiction under the Declaratory Judgment Act is discretionary. See 28
U.S.C. § 2201(a) (1996) (“In a case of actual controversy, [a district court] may declare
the rights and other legal relations of any interested party.”) (emphasis added). When a
related proceeding is pending in a state court, “‘considerations of federalism, efficiency,
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and comity’ should inform the district court’s decision whether to exercise jurisdiction
over a declaratory judgment action.” Penn-America Ins. Co. v. Coffey, 368 F.3d 409, 412
(4th Cir. 2004) (quoting Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 257 (4th Cir.
1996)). The Fourth Circuit has identified “four facts for guiding the analysis” of a district
court when it determines whether to proceed with a federal declaratory judgment action
when a parallel state action is pending:
(1) whether the state has a strong interest in having the issues decided in its
courts; (2) whether the state courts could resolve the issues more efficiently
than the federal courts; (3) whether the presence of “overlapping issues of
fact or law” might create unnecessary “entanglement” between the state and
federal courts; and (4) whether the federal action is mere “procedural
fencing,” in the sense that the action is merely the product of forumshopping.
Id. (quoting United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493–94 (4th Cir. 1998)).
In sum, a district court should avoid “gratuitous interference” when “another suit
involving the same parties and presenting opportunity for ventilation of the same state
law issues is pending in state court.” Coffey, 368 F.3d at 412 (quoting Wilton v. Seven
Falls Co., 515 U.S. 277, 283 (1995).
III.
DISCUSSION
The court finds that this is not a case where it should decline to exercise its
jurisdiction. The case before this court does not involve overlapping issues of law and
facts with the state action. The issues before this court involve insurance coverage and
will likely require inquiry into whether the accident occurred in the course of a trucking
business. The state suit involves issues of negligence and causation. Thus, it is unlikely
that this court would be required to address the same factual issues that would later arise
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in the state action. Accordingly, this court could resolve the disputed coverage issues
without becoming entangled in the tort issues pending in state court.
Moreover, the other factors identified by the Fourth Circuit also point toward this
court exercising its discretionary jurisdiction. While the state does have an interest in
resolving insurance issues, the parties indicate that South Carolina courts have already
addressed one of the key issues, and it is unlikely that this court would break any new
ground.
See Bovain v. Canal Ins., 383 S.C. 100, 678 S.E.2d 422 (2009).
As to
efficiency, the case before this court involves a coverage issue that could not be litigated
in the underlying state tort case, and two actions will be necessary to resolve all of the
contested issues. See, e.g., Dunn v. Charleston Coca-Cola Bottling Co., 311 S.C. 43, 44–
45, 426 S.E.2d 756, 757–58 (1993) (holding that defendants’ liability insurance shall not
be made known to the jury). Finally, there is little evidence of procedural fencing as this
case was filed first and the question presented here would not be addressed by nor
resolved by the state tort action.
IV.
CONCLUSION
For the reasons outlined above, the court hereby denies the motion to dismiss and
will exercise jurisdiction over the case.
IT IS SO ORDERED.
February 22, 2012
Columbia, South Carolina
Joseph F. Anderson, Jr.
United States District Judge
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