State Auto Property and Casualty Insurance Company vs. Scenna, et al

Filing 14

MEMORANDUM OPINION AND ORDER DENYING IN PART WITHOUT PREJUDICE AND DENYING IN PART WITH PREJUDICE THE MALONE DEFENDANTS' MOTION TO DISMISS. Based on the analysis, this Court finds that the Malones' motion to dismiss is DENIED WITH PREJUDICE as to the declarations page and abstention issues and DENIED WITHOUT PREJUDICE as to the question of ambiguity. Signed by Senior Judge Frederick P. Stamp, Jr. on 6/4/14. (copy to counsel of record via CM/ECF)(rjs)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
STATE AUTO PROPERTY AND
CASUALTY INSURANCE COMPANY,
Plaintiff,
v.

Civil Action No. 5:14CV15
(STAMP)

ALIO SCENNA, GINA SCENNA,
AL SCENNA BARBER & STYLES,
Defendants,
and
TRUDY MALONE, MICHAEL MALONE,
and the ESTATE OF MICHELLE PARSONS,
Trudy Malone, Administratrix,
Nominal Defendants.
MEMORANDUM OPINION AND ORDER
DENYING IN PART WITHOUT PREJUDICE
AND DENYING IN PART WITH PREJUDICE THE
MALONE DEFENDANTS’ MOTION TO DISMISS
I.

Procedural History

The plaintiff in the above-styled civil action has filed a
declaratory judgment action in this Court to determine whether it
has a duty to provide coverage to the defendants under a general
commercial liability policy granted to defendant Alio Scenna (“Mr.
Scenna”).

The question of the coverage arose because of an

underlying state court personal injury case filed by Trudy Malone,
Michael Malone, and the Estate of Michelle Parsons, through Trudy
Malone, Administratrix (“the Malones”), against the other three
defendants, Alio Scenna, Gina Scenna, and Al Scenna Barber & Styles

(“the Scennas”).

The underlying state court action involves a car

accident wherein the plaintiffs allege that Mr. Scenna caused an
accident which killed Michelle Parsons and seriously injured Trudy
Malone and Michael Malone.
In response to the plaintiff’s complaint, the Malones filed a
motion to dismiss.

Thereafter, the plaintiff filed a response.

reply has not been filed.

A

Further, the plaintiff and the Malones

later filed a Rule 26(f) report pursuant to this Court’s first
order and notice dictating deadlines which fulfill the requirements
of Federal Rule of Civil Procedure 26.

The plaintiff and the

Malones indicated in their Rule 26(f) report that the Scennas had
not appeared in this action, but that the Malones and the plaintiff
had agreed on deadlines for a scheduling order.

This Court then

held a status and scheduling conference at which it set forth a
scheduling order, discussed the pending motion to dismiss, and also
directed plaintiff’s counsel to acquire further information about
the Scennas status in this action.1
II.

Facts

In their motion to dismiss, the Malones first argue that the
plaintiff failed to include the complete declarations page in the
complaint and thus this Court should dismiss the complaint and this
action.

Next, the Malones contend that the policy language is

1

At the conference, plaintiff’s counsel stated that the Scenna
defendants had been served but that proof of service had not been
filed as of June 3, 2014, the date of the conference.
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ambiguous in this case and as such this Court should find, under
existing law, that there is coverage. Finally, the Malones contend
that the issues in this action arise under West Virginia law and
that

it

would

be

inefficient

for

this

Court

to

decide

the

declaratory judgment issue as the underlying issues are already
part of a state court action.
The plaintiff first argues that its failure to include the
complete declarations page in the complaint is of no consequence
because it alleged in paragraph 8 of the complaint that Mr. Scenna
was the named insured at the time of the accident.

The plaintiff

next argues that the Malones’ arguments as to ambiguity of the
policy language relate to whether or not coverage exists and not
whether a cause of action has been pled.

However, insofar as it

does, the plaintiff asserts that the language is unambiguous.
Finally, the plaintiff contends that this case should not be
remanded because the Nautilus factors are not in the Malones’
favor: (1) there are no novel issues; (2) the plaintiff is not a
party to the state court action; (3) the coverage issue should be
resolved as efficiently as possible; and (4) there is no evidence
of forum shopping.
Additionally, during the status and scheduling conference, the
Court further inquired of counsel for the Malones and for the
plaintiff of their positions as to the motion to dismiss.

The

Malones indicated that their interests align with the interests of

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the Scennas insofar as insurance coverage by the plaintiff under
the commercial policy is questioned in this action.

Further, the

parties indicated that the plaintiff has not been joined in the
state court action as a party and thus the Nautilus2 factors are
likely not addressable at this time.

Also, the Malones’ counsel

indicated that there is no scheduling order in the state court
action

at

this

time

and

that

some

paper

discovery

has

been

exchanged. Finally, the parties indicated that there is a need for
discovery and the potential involvement of experts in this action
as to the issue of the ambiguity of the insurance policy.
As a reply was not filed within the time allotted within the
Federal Rules of Civil Procedure and Local Rules of this Court, the
Malones’ motion to dismiss is now fully briefed.

For the reasons

that follow, this Court finds that the Malones’ motion to dismiss
should be denied without prejudice.
III.

Applicable Law

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a defendant to raise the defense of “failure to state a claim upon
which

relief

can

be

granted”

as

a

motion

in

response

to

a

plaintiff’s complaint before filing a responsive pleading.
In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a court must accept the factual allegations

2

Nautilus Ins. Co. v. Winchester Homes, 15 F.3d 371 (4th Cir.
1994).
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contained in the complaint as true.

Advanced Health-Care Servs.,

Inc. v. Radford Cmty. Hosp., 910 F.2d 139, 143 (4th Cir. 1990).
Dismissal is appropriate only if “‘it appears to be a certainty
that the plaintiff would be entitled to no relief under any state
of facts which could be proven in support of its claim.’”

Id. at

143-44 (quoting Johnson v. Mueller, 415 F.2d 354, 355 (4th Cir.
1969)); see also Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d
324, 325 (4th Cir. 1989).
A motion to dismiss for failure to state a claim under Rule
12(b)(6) should be granted only in very limited circumstances, as
the pleading requirements of Federal Rule of Civil Procedure
8(a)(2) only mandate “a short and plain statement of a claim
showing that the pleader is entitled to relief.”

Fed. R. Civ. P.

8(a)(2). Still, to survive a motion to dismiss, the complaint must
demonstrate the grounds to entitlement to relief with “more than
labels and conclusions . . . factual allegations must be enough to
raise a right to relief above the speculative level.”

Bell

Atlantic v. Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v.
Iqbal, 556 U.S. 662, 663-666 (2009).
Further, the Federal Rules of Civil Procedure provide that,
prior to filing a responsive pleading, a defendant may challenge
the district court’s subject matter jurisdiction over the claims
brought against it by filing a motion to dismiss under Rule
12(b)(1).

The federal district courts are courts of limited

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jurisdiction, and may only hear cases over which they have been
granted jurisdiction either by statute or by the Constitution.
When a defendant brings a motion under Rule 12(b)(1), a court must
dismiss the case against it if the court finds that it “lacks the
statutory or constitutional power to adjudicate it.”

Makarova v.

United States, 201 F.3d 110, 113 (2d Cir. 2000).
Once subject matter jurisdiction has been challenged, it is
the plaintiff’s “burden of proving that subject matter jurisdiction
exists.”
1999).

Evans v. B. F. Perkins Co., 166 F.3d 642, 647 (4th Cir.
Further, because subject matter jurisdiction cannot be

waived by the court or by the parties, and if lacking, renders the
district court wholly unable to rule on any matter in controversy,
in resolving a motion to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1), a district court “may refer to
evidence outside the pleadings without converting the proceeding to
one for summary judgment.”

Richmond, F. & P. R. Co. v. United

States, 945 F.2d 765, 768 (4th Cir. 1991).
IV.
A.

Discussion

Declarations Page
To reiterate, the parties disagree as to whether or not this

action should be dismissed because the plaintiff did not attach a
copy of the Business Owners Policy Common Declarations page to the
complaint.

This Court agrees with the plaintiff that although the

declarations page would be helpful to the defendants, it was not

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required that the declarations page be attached to the complaint as
long as the defendants were on notice as to the information that
the declarations page would provide.

The plaintiff has provided,

at paragraph 8 of the complaint and otherwise in the complaint, the
information which would be provided by the declarations page.
Thus, the plaintiff did assert a claim upon which relief may be
granted as this Court must accept such information as true.
Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910 F.2d
at 143.

Thus, the Malones’ motion to dismiss is denied as to this

assertion.
B.

Ambiguity of Contract
As to the parties’ arguments concerning the ambiguity of the

contract,

both

parties

agreed

at

the

status

and

scheduling

conference that more discovery and possibly the involvement of
experts was required for the parties, or this Court, to make a
determination as to the issue of ambiguity of the insurance
contract provisions.

As such, this Court finds that the motion to

dismiss should be denied at this time.

However, the Court will

deny the motion without prejudice to permit its re-filing at a
later time if it is appropriate to do so.
C.

Abstention
The Malones contend that this Court should abstain from

hearing this action as there is a pending state court action

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involving the Malones and the Scennas.

The defendant argues that

the Nautilus factors do not support abstention.
As an initial matter, under the Declaratory Judgment Act, 28
U.S.C. § 2201, federal courts are not required to hear declaratory
judgment actions.

See Nautilus, 15 F.3d at 375.

Rather, a

district court’s decision to hear such a case is discretionary.
Id.
Initially, the United States Court of Appeals for the Fourth
Circuit in Mitcheson v. Harris, 955 F.2d 235, 237-40 (4th Cir.
1992), indicated that when determining whether to entertain a
declaratory judgment action, a district court should consider:
(i) the strength of the state’s interest in having the
issues raised in the federal declaratory judgment action
decided in the state courts; (ii) whether the issues
raised in the federal action can more efficiently be
resolved in the court in which the state action is
pending; and (iii) whether permitting the federal action
to go forward would result in unnecessary “entanglement”
between the federal and state court systems, because of
the presence of overlapping issues of fact or law.
Id. (as cited in Nautilus Ins. Co. v. Winchester Homes, Inc., 15
Later, in Nautilus, the Fourth

F.3d 371, 377 (4th Cir. 1994)).
Circuit

added

that

courts

should

also

consider

“whether

the

declaratory judgment action is being used merely as a device for
‘procedural fencing’–that is, ‘to provide another forum in a race
for res judicata’ or ‘to achieve a federal hearing in a case
otherwise not removable.’” 15 F.3d at 377 (quoting 6A J. Moore, B.

8

Ward & J. Lucas, Moore’s Federal Practice, ¶ 57.08[5] (2d ed.
1993)).
1.

State’s Interest

The state’s interest does not weigh in favor of abstention.
This Court is familiar with West Virginia insurance law and has
applied that law in previous actions filed in this Court.

This

Court is also familiar with the law regarding a determination of
whether or not an insurance clause is ambiguous.

As such, the

state’s interest is not sufficient to warrant abstention.
2.

Efficiency

The Malones, through counsel, indicated that the state court
has not set forth a scheduling order and that limited paper
discovery has taken place. Thus, this Court does not find that the
state court would be able to more efficiently resolve this case
than this Court.

This Court has set forth a scheduling order and

thus the parties should now be engaged in the exchange of discovery
to further the resolution of this action.

Further, without any

information as to a state court trial date or other deadlines, this
Court cannot determine whether or not the state court action would
be resolved more efficiently than the current action.
3.

Entanglement

The plaintiff has not been made a party of the state court
action, thus, the state court action differs from this action in

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that regard.

As such, the “lynchpin” of any entanglement argument

is missing and this Court finds that abstention is not justified.
4.

Procedural Fencing

The Malones have not provided any evidence that the plaintiff
has engaged in procedural fencing by bringing this action in this
Court.

Further, because there are different parties and different

factual and legal issues involved in this action versus the
underlying state court action, the plaintiff cannot be said to be
attempting to win a race for res judicata as the determination of
declaratory relief in this Court will be much different than a
liability determination in the state court action.

Therefore, the

motion to dismiss on this issue is denied.
V.

Conclusion

Based on the analysis above, this Court finds that the
Malones’ motion to dismiss is DENIED WITH PREJUDICE as to the
declarations

page

and

abstention

issues

and

DENIED

WITHOUT

PREJUDICE as to the question of ambiguity.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:

June 4, 2014

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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