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National Trust Insurance Co. v. Lower Dixie Timber Company, Inc.

United States District Court, S.D. Alabama, Southern Division

August 22, 2014

NATIONAL TRUST INSURANCE COMPANY, Plaintiff,
v.
LOWER DIXIE TIMBER COMPANY, INC., et al., Defendants.

ORDER

CALLIE V. S. GRANADE, District Judge.

This matter is before the court on the motions to dismiss or, in the alternative, motions to stay this action filed by Defendants Jessie C. Moss, as the Personal Representative of the Estate of Tina L. Moss, Deceased ("Moss") and Lower Dixie Timber Company, Inc. ("Lower Dixie Timber") (Docs. 10 & 14) as well as Plaintiff National Trust Insurance Company's ("National Trust") response in opposition (Doc. 18), and the Defendants' replies thereto (Docs. 20 & 21). For the reasons stated below, the motions to dismiss are due to be granted, and the motions to stay are due to be denied as moot.

BACKGROUND

On April 4, 2012, Moss filed a wrongful death action in the Circuit Court of Clarke County, Alabama against Lower Dixie Timber, Lower Dixie Logging Company, Inc. ("Lower Dixie Logging") and Johnny Lee Cox, Jr. ("Cox"). (Doc. 10 at 18). Moss amended the complaint in January 2013 to assert additional theories of liability against Lower Dixie Timber. (Doc. 10 at 21-24). The second amended complaint alleges that Cox, in the course of his employment with Lower Dixie Logging and while pulling a company owned tractor-trailer on Highway 43 in Thomasville, Alabama, caused an automobile accident that resulted in the death of Tina Moss. Id . The complaint further alleges that Lower Dixie Timber had contracted with Lower Dixie Logging to remove timber and that Lower Dixie Timber breached a non-delegable duty to ensure the safe delivery of wood by negligently selecting an incompetent contractor to transport the wood. Id.

Lower Dixie Timber and Lower Dixie Logging are both Alabama corporations with their principal places of business in Clarke County, Alabama. (Doc. 10 at 21). Moss and Cox are Alabama citizens. Id . Tina Moss was also an Alabama citizen at the time of her death. (Doc. 10 at 28).

Lower Dixie Timber is an insured of National Trust under General Commercial Liability Policy number GL 0000815 10. (Doc. 10 at 31). On or about April 30, 2014, National Trust agreed to defend Lower Dixie Timber in the liability suit, but reserved all of its rights and defenses under the policy with respect to its duty to defend or indemnify as well as the right to seek declaratory relief in determination of its obligations under the policy. (Doc. 1, ΒΆ 11).

On May 2, 2014, National Trust filed the instant action requesting a declaration that it is not obligated to defend or indemnify Lower Dixie Timber in the underlying suit based on an auto exclusion in the policy, [1] and, alternatively, because other valid and collectible insurance is available. (Doc. 1 at 10).

On May 20, 2014, Lower Dixie Timber filed a third-party complaint for declaratory judgment against National Trust in the underlying action in the Circuit Court of Clark County. (Doc. 10 at 31-37). In mirror image of National Trust's request for declaratory relief in this court, Lower Dixie Timber seeks a ruling from the state court that National Trust owes a duty to defend the liability action because the auto exclusion in the policy does not apply to prevent coverage under the allegations of the second amended complaint. Id . Lower Dixie Timber subsequently filed an unopposed motion for leave to amend its answer in the Clark County case. (Doc. 20-1). On June 18, 2014, the state court granted the motion and deemed the previously-filed third-party complaint as filed. (Doc. 20-2).

Lower Dixie Timber and Moss now seek dismissal or, alternatively, a stay of National Trust's federal declaratory judgment action. Specifically, the defendants argue that under the Wilton/Brillhart doctrine, abstention is appropriate because the parties can fully resolve all issues pertaining to the dispute in a parallel lawsuit currently pending in state court.

ANALYSIS

The Declaratory Judgment Act is "an enabling Act, which confers a discretion on courts rather than an absolute right upon the litigant." Wilton v. Seven Falls Co. , 515 U.S. 277, 287 (1995) (citations omitted). It gives federal courts the ability to make a declaration of rights, but it does not impose a duty to do so. Brillhart v. Excess Ins. Co. of Am. , 316 U.S. 491, 494 (1942). "The desire of insurance companies... to receive declarations in federal court on matters of purely state law has no special call on the federal forum." Canal Ins. Co. v. Morgan, No. 06-0727-WS-M, 2007 WL 174387, *2 (S.D. Ala. Jan 19, 2007) (internal quotations and citations omitted); see also Prudential Ins. Co. of America v. Doe , 140 F.3d 785, 789 (8th Cir. 1998) ("The Supreme Court's decision in Wilton... vests the district courts with broad discretion in deciding whether to hear a declaratory judgment action.").

Consistent with the foregoing, the Eleventh Circuit has long recognized that a district court may "decline to entertain a declaratory judgment action on the merits when a pending proceeding in another court will fully resolve the controversy between the parties." Ven-Fuel, Inc. v. Department of the Treasury , 673 F.2d 1194, 1195 (11th Cir. 1982); see also Federal Reserve Bank of Atlanta v. Thomas , 220 F.3d 1235, 1247 (11th Cir. 2000) ("A court may exercise its discretion to dismiss a declaratory judgment action in favor of a pending state court proceeding that will resolve the same state law issues."). The Eleventh Circuit has outlined nine factors to consider in determining whether to hear a declaratory action when confronted with a parallel state action:

(1) the strength of the state's interest in having the issues raised in the federal declaratory action ...

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