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AMERICAN HOME ASSUR. CO. v. LIBERTY MUT. INS. CO.

September 13, 1979

AMERICAN HOME ASSURANCE COMPANY and TRANSAMERICA INSURANCE COMPANY
v.
LIBERTY MUTUAL INSURANCE COMPANY



The opinion of the court was delivered by: BECHTLE

MEMORANDUM

Presently before this Court is the motion of defendant Liberty Mutual Insurance Company ("Liberty Mutual") to dismiss the plaintiffs' complaint, pursuant to Fed.R.Civ.P. 12(b)(6). Jurisdiction for this action is based upon diversity of citizenship, 28 U.S.C. § 1332. For all of the following reasons, the motion of the defendant to dismiss will be granted.

 This action was brought by plaintiffs American Home Assurance Company ("American Home") and Transamerica Insurance Company ("Transamerica") seeking declaratory relief pursuant to the Declaratory Judgment Act ("the Act"), 28 U.S.C. § 2201 Et seq. The instant action directly stems from a wrongful death and survival action that was brought in the Court of Common Pleas of Philadelphia County, McCully v. Dic Concrete Corp. of Pennsylvania, et al., August Term 1969, No. 4228. That action concerned a suit brought by the decedent's administratrix against F. J. Frankel Construction Company, Inc., and other entities ("Frankel") and Dic Concrete Corporation of Pennsylvania ("Dic Concrete "). American Home and Transamerica are the insurers of Frankel, and Dic Concrete is insured by Liberty Mutual.

 Dic Concrete, a subcontractor, and Frankel, as contractor, were engaged in the construction of a building in Philadelphia where the decedent was killed due to injuries sustained in a fall while working on the construction project. Under an indemnity agreement, Dic Concrete had agreed to indemnify and hold Frankel harmless for certain accidental injuries occurring on the work site during construction. Neither Dic Concrete nor Frankel is a party to the instant action. Plaintiffs, as the insurers of one of the parties to the indemnity agreement, now seek from this Court declaratory relief to declare the legal rights and obligations of the parties to the indemnity agreement, including whether:

 
(a) the terms and provisions of the sub-contracts are binding between the parties;
 
(b) the sub-contracts are applicable to the claim instituted by Barbara McCully, Administratrix of the Estate of Frank McCully;
 
(c) defendant, LIBERTY MUTUAL INSURANCE COMPANY, has an obligation to indemnify and hold the plaintiffs harmless from all losses, costs, damages, liability and expenses incurred by plaintiffs as a result of the claim instituted by Barbara McCully, Administratrix of the Estate of Frank McCully;
 
(d) judgment is to be entered in favor of plaintiffs against defendant for counsel fees and costs expended by plaintiffs in defending the claim of Barbara McCully, Administratrix of the Estate of Frank McCully.

 Plaintiffs' Complaint, at 4.

 The state court action in McCully resulted in a verdict of $ 503,000 in favor of the decedent's administratrix. Currently pending before the state court are the motions for a new trial or for judgment notwithstanding the verdict. The verdict has not been reduced to judgment nor has any portion of the award been paid.

 Liberty Mutual filed its motion to dismiss the plaintiffs' action for declaratory relief before this Court, pursuant to Fed.R.Civ.P. 12(b)(6), based on three separate grounds: (1) the complaint fails to allege an actual controversy between the parties, as required under 28 U.S.C. § 2201; (2) Pennsylvania law does not allow a direct action against an insurer and, therefore, the complaint fails to state a claim upon which relief can be granted; and (3) the plaintiffs are not real parties in interest, as required under Fed.R.Civ.P. 17(a).

 The Court finds that the first ground raised by the defendant challenging the applicability of declaratory relief in the instant case is solely dispositive of the motion to dismiss. Therefore, the Court finds it unnecessary to address the other issues raised in support of the motion to dismiss.

 Section 2201 of the Declaratory Judgment Act provides:

 
In a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code of 1954, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such ...

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