United States District Court, N.D. Alabama, Northeastern Division
JAMES RIVER INSURANCE COMPANY, Plaintiff/Counterclaim Defendant,
ULTRATEC SPECIAL EFFECTS, INC., et al., Defendants ULTRATEC SPECIAL EFFECTS, INC., Third-Party Plaintiff
BRITTON-GALLAGHER & ASSOCIATES, INC. AND FOUNTAIN PARKER, HARBARGER AND ASSOCIATES, LLC. Third-Party Defendants.
MEMORANDUM OPINION AND ORDER
K. KALLON, UNITED STATES DISTRICT JUDGE
River Insurance Company, Inc. filed this declaratory judgment
action pursuant to 28 U.S.C. § 2201 against various
defendants,  seeking to establish that no coverage
exists for employees of Ultratec Special Effects based on an
Employer's Liability Exclusion and that it has no
obligation to defend or indemnify any Ultratec employees in
three underlying state court actions. Doc. 1 at 11-12. In
response to James River's lawsuit, Ultratec filed a
Third-Party Complaint, alleging various torts arising out of
the procurement of the insurance policies in question.
See generally doc. 76. One of the third-party
defendants, Fountain Parker Harbarger and Associates, LLC,
has filed a motion to dismiss on abstention grounds based on
a parallel litigation contention or, in the alternative, to
stay this action pending the disposition of the underlying
state lawsuits. See doc. 87. For the following
reasons, Fountain Parker's motion to dismiss is due to be
Declaratory Judgment Act is “an enabling Act, which
confers a discretion on the courts rather than an absolute
right upon the litigant.” Wilton v. Seven Falls
Co., 515 U.S. 277, 287 (1995). As such, the decision to
hear a declaratory judgment action is committed to the
discretion of the district court. Brillhart v. Excess
Ins. Co. of America, 316 U.S. 491, 494 (1942);
Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995);
Angora Enterprises, Inc. v. Condominium Ass'n of
Lakeside Village, Inc., 796 F.2d 384, 387 (11th Cir.
1986). Moreover, where there is a parallel state proceeding,
an alternative form of relief, or other adequate remedy,
“a court, in the exercise of the discretion that it
always has in determining whether to give a declaratory
judgment, may properly refuse declaratory relief if the
alternative remedy is better or more effective.”
Angora Enterprises, 796 F.2d at 387-88.
is parallel where “substantially the same parties are
contemporaneously litigating substantially the same issues in
more than one forum.” Georgia v. U.S. Army Corps of
Engineers, 223 F.R.D. 691, 697 (N.D.Ga. 2004). Contrary
to Fountain Parker's contention, the litigation pending
before the court is not parallel to the state court
litigation. Based on a review of the complaints, the
identity of parties and issues in the underlying state court
actions are not similar enough to those in this action such
that this case qualifies as parallel litigation. Among other
things, James River is not a party to the three state court
cases, there are no insurance coverage claims or defenses at
issue in those cases based on the record before the court,
and, as James River notes, it has also filed a claim for
money damages, seeking reimbursement of monies it has thus
far paid out in defense costs. See, e.g., docs. 1-1,
1-2, 1-3, 93 at 2. As such, dismissal on abstention grounds
is not warranted. See Quackenbush v. Allstate Ins.
Co., 517 U.S. 706, 714 (1996) (“[F]ederal courts
have the power to dismiss or remand cases based on abstention
principles only where the relief being sought is equitable or
Fountain Parker requests that the court stay this action
pending the resolution of the state cases. This request is
due to be granted in part. The court declines to stay the
duty to defend claim because the coverage issues in this case
would still remain undecided even after the completion of the
state court actions. Moreover, a stay would likely render
moot the duty to defend issue by depriving James River of a
forum in which to litigate this claim. See Atlantic Ca.
Ins. Co. v. GMC Concrete Co., Inc., 2007 WL 4335499, *4
(S.D. Ala. 2007).
stay is due to be granted, however, as to the duty to
indemnify claim. See Allstate Ins. Co. v. Employers
Liability Assur. Corp., 445 F.2d 1278, 1279 (5th Cir.
1971) (“[N]o action for declaratory relief will lie to
establish an insurer's liability . . . until a judgment
has been rendered against the insured since, until such
judgment comes into being, the liabilities are contingent and
may never materialize.”). See also Cincinnati Ins.
Co. v. Holbrook, 867 F.2d 1330 (11th Cir. 1989);
Employer Mut. Cas. Co. v. Evans, 76 F.Supp.2d 1257,
1262 (N.D. Ala. 1999). In the absence of a judgment in the
underlying state actions, this claim is not yet ripe.
Therefore, because the duty to indemnify is only relevant if
there is a state court judgment and if this court finds first
that James River has a duty to defend, the court will stay
the indemnification claim.
foregoing reasons, Fountain Parker's motion to dismiss,
doc. 87, is DENIED and the motion to stay is GRANTED solely
as to the duty to indemnify claim.
 Specifically, James River has named
Ultratec Special Effects, Inc., MST Properties, LLC, Robert
Holland, Randy Moore, Mike Thouin, John Anthony, David J.
Cothran, as Administrator for the Estate of Aimee Cothran,
Donald Ray Sanderson, as Administrator for the Estate of
Virginia Marie Sanderson, and Coleen McKenna Whorton. Doc.
 The Eleventh Circuit has developed a
list of factors to consider “to aid district courts in
balancing state and federal interests” when making a
“discretionary decision whether to abstain from
exercising jurisdiction over state-law claims in the face of
parallel litigation in the state courts.” Ameritas
Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331
(11th Cir. 2005). The court will not analyze the