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Legacy Odenville LLC v. Wiggins Childs Pantazis Fisher & Goldfarb LLC

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

March 8, 2017

LEGACY ODENVILLE LLC, Plaintiff,
v.
WIGGINS CHILDS PANTAZIS FISHER & GOLDFARB LLC, et al., Defendants.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE

         Plaintiff Legacy Odenville, LLC filed this suit for a declaratory judgment, seeking a determination that it had no obligation to Defendants Wiggins Childs Pantazis Fisher & Goldfarb, LLC or The Robinson Law Firm under an attorneys' fee agreement related to a contract for the sale of land parcels. The Defendants have moved to dismiss the complaint. (Doc. 10). Because the court finds that it should abstain from hearing this matter, it GRANTS the motion and will DISMISS this case WITHOUT PREJUDICE.

         I. BACKGROUND

         The center of this dispute is an attorneys' fee agreement entered into by Four Star Land Ventures, LLC and Four Star Properties, LLC with the Defendant Attorneys (“Attorneys”). At the start of 2008, the Four Star entities were engaged in a dispute with D.R. Horton, Inc. over the sale of lots in the Legacy Springs subdivision located in St. Clair County, Alabama.[1] Attorneys represented Four Star throughout this dispute.

         In April 2010, Four Star and D.R. Horton settled their dispute. Four Star and the Attorneys then entered into a fee agreement. The agreement provided that Four Star would pay the Attorneys $5, 000 per lot sold from the proceeds due Four Star under the sale. If the purchase agreement was amended or a subsequent agreement between Four Star and D.R. Horton was executed, Attorneys would receive nine percent of the sales price of those lots.

         However, Four Star no longer owns the lots in question. On April 27, 2015, Four Star executed two deeds both entitled “Deed in Lieu of Foreclosure” in favor of the Plaintiff, Legacy Odenville, LLC. Attorneys state that the deeds were the result of an agreement reached in mediation in an action filed in St. Clair County Circuit Court to enforce the fee agreement and stop a foreclosure action that had been initiated against the property by an entity named Legacy Springs Bond.

         The case is currently still pending.[2] After Legacy Odenville commenced this action, Attorneys added Legacy Odenville to the state court action. On December 15, 2016, the state court granted the Attorneys' motion for partial summary judgment and declared the April 27, 2015, deeds void. Legacy Odenville has filed a motion for the Circuit Court to reconsider its decision and has also filed a petition for a writ of mandamus with the Alabama Supreme Court.

         II. LEGAL STANDARD

         Generally, federal courts have a “duty to exercise the jurisdiction that is conferred upon them by Congress.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, “district courts possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995); see also Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942).

         The Eleventh Circuit has provided nine factors for a district court to consider in determining whether to abstain from hearing an action for declaratory relief:

(1) the strength of the state's interest in having the issues raised in the federal declaratory action decided in the state courts;
(2) whether the judgment in the federal declaratory action would settle the controversy;
(3) whether the federal declaratory action would serve a useful purpose in clarifying the legal relations at issue;
(4) whether the declaratory remedy is being used merely for the purpose of “procedural fencing”-that is, to provide an arena for a race for res judicata or to achieve a federal hearing in a case otherwise not removable;
(5) whether the use of a declaratory action would increase the friction between our federal and state courts and improperly encroach on state jurisdiction;
(6) whether there is an alternative remedy that is better or more effective;
(7) whether the underlying factual issues are important to an informed ...

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