Certain Underwriters at Lloyd's London v. Sypniewski et al

Filing 84

ORDER DISMISSING CASE. Signed by Honorable Patrick Michael Duffy on 10/23/15. (chub, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
Certain Underwriters at Lloyd’s,
London, Subscribing to Certificate
Number 331902 R-5,

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Plaintiff,
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v.
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Harry Sypniewski, Kathleen Sypniewski, )
Robert Sypniewski, and Irene Bellamy,
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Defendants.
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C.A. No.: 4:14-cv-2281-PMD-TER
ORDER

This declaratory judgment action stems from a personal injury action that Irene Bellamy
filed in South Carolina state court against Robert Sypniewski. After Bellamy filed her suit,
Plaintiff filed this declaratory judgment action in order to have this Court determine whether an
insurance policy that Plaintiff issued to Harry and Kathleen Sypniewski required Plaintiff to
defend and indemnify Robert Sypniewski in Bellamy’s lawsuit.
While this matter was pending, the Court learned that Bellamy’s lawsuit had been
dismissed. The Court asked the parties to submit briefs addressing whether this action presents a
justiciable controversy and, if so, whether this Court should nonetheless decline to exercise its
jurisdiction. See Cook v. Georgetown Steel Corp., 770 F.2d 1272, 1274 (4th Cir. 1985) (“[L]ack
of subject matter jurisdiction is an issue that requires sua sponte consideration when it is
seriously in doubt.”). Plaintiff and Robert Sypniewski filed briefs opining that this matter is not
justiciable. No other party filed a brief.
Subject matter jurisdiction in the federal courts is limited to the adjudication of actual
“cases” and “controversies” under Article III of the United States Constitution. See Deakins v.

Monaghan, 484 U.S. 193, 199 (1988) (“Article III of the Constitution limits federal courts to the
adjudication of actual, ongoing controversies between litigants.”). In a declaratory judgment
action, a liability insurance company’s obligation to defend and indemnify is determined by the
allegations against the insured in the underlying personal injury complaint. Mfrs. & Merchs.
Mut. Ins. Co. v. Harvey, 498 S.E.2d 222, 227 (S.C. Ct. App. 1998) (citing R.A. Earnhardt Textile
Mach. Div. Inc. v. S.C. Ins. Co., 282 S.E.2d 856, 857 (S.C. 1981) (per curiam)). Here, the
dismissal of Bellamy’s lawsuit means there is no underlying complaint that could potentially
trigger defense or indemnity obligations. Thus, there is no actual, ongoing coverage controversy
before the Court. Cf. Union Ins. Co. v. Soleil Grp., Inc., 465 F. Supp. 2d 567, 574–75 (D.S.C.
2006) (finding liability insurer’s declaratory judgment action was not justiciable because no
action had been filed against the insured). Accordingly, the Court lacks jurisdiction and must
dismiss this case. See Fed. R. Civ. P. 12(h)(3).
CONCLUSION
Therefore, for the foregoing reasons, it is ORDERED that this action is DISMISSED
without prejudice.
AND IT IS SO ORDERED.

October 23, 2015
Charleston, South Carolina

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