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AETNA CAS. & SUR. CO. v. STERNER

November 10, 1988

AETNA CASUALTY & SURETY CO.
v.
JOHN STERNER and MARGARET STERNER, husband and wife



The opinion of the court was delivered by: VAN ANTWERPEN

 FRANKLIN S. VAN ANTWERPEN, UNITED STATES DISTRICT JUDGE.

 This is a declaratory judgment action arising out of defendant's automobile accident with a third party. In the instant matter, defendant moves this court to dismiss plaintiff's declaratory judgment action. For the reasons stated below, defendant's motion will be granted.

 In February, 1988, while defendant John Sterner was acting within the scope of his employment, an underinsured motorist struck defendant's vehicle. As a result of the collision, defendant suffered injuries for which he later received workmen's compensation benefits. The vehicle which defendant was operating at the time of the accident was insured by plaintiff Aetna Casualty & Surety Co. through a policy issued to defendant's employer. The policy included underinsured motorist coverage.

 On August 9, 1988, plaintiff filed a declaratory judgment action pursuant to 28 U.S.C. § 2201 praying that we bar defendant from seeking uninsured motorist coverage under the policy plaintiff issued to defendant's employer. Plaintiff bases jurisdiction on 28 U.S.C. § 1332(a) alleging complete diversity of citizenship and an amount in controversy exceeding $ 10,000. On June 28, 1988, an action was filed in the Court of Common Pleas of Schuylkill County seeking a judicial declaration of the rights and liabilities of the parties in this matter and other parties as well. In the instant matter, filed on September 6, 1988, defendant argues that this court should dismiss this case to avoid creating friction with the Pennsylvania state courts. Defendant alleges that exercising jurisdiction will require us to interpret two state statutes without guidance from the state courts and thus encroach upon the authority of the states. We are unable to accept this proposition. However, we do conclude that the pendency of the state court action suggests that we should use our discretionary authority to dismiss the declaratory action and defer to the state court.

 Defendant's first contention, although not so couched, comes under the rubric of an abstention argument. Defendant asserts that we should not hear this case because it presents difficult issues of state law which are more appropriately left resolved by the state court. We disagree.

 Abstention "is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it." Colorado River Water Conservation District v. United States, 424 U.S. 800, 813, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976), (quoting from, County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89, 3 L. Ed. 2d 1163, 79 S. Ct. 1060 (1959)). There are three established doctrines of abstention. *fn1" We find that Pullman and Younger abstention obviously do not apply. This case does not involve constitutional questions, and plaintiff does not seek to enjoin a state criminal or civil proceeding instituted against it. While Pullman and Younger are easily dismissed, the Burford abstention doctrine requires more thorough consideration.

 If we exercise jurisdiction in this matter, we would face the question whether § 303(a) of the Workmen's Compensation Act, 77 P.S. § 481(a) ("the Act") precludes a defendant receiving workmen's compensation from recovering underinsured motorist benefits. Section 303(a) of the Act provides:

 
"(a) The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death as defined in section 301(c)(1) and (2) or occupational disease as defined in section 108."

 In deciding the declaratory judgment action, we must construe the above statute along with the Underinsured Motorist Statute, 75 Pa. C.S.A. § 1731, et seq., which in pertinent part provides:

 
"The coverages required by this subchapter shall not be made subject to an exclusion or reduction in amount because of any workers' compensation benefits payable as a result of the same injury."

 Because this is a diversity action, this court must apply Pennsylvania law. See Erie Railroad Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938). Given the absence of a reported decision of the Pennsylvania Supreme Court on whether the Act precludes an action for uninsured motorist benefits, we may predict how the Supreme Court would decide the issue if it confronted it. See Rabatin v. Columbus Lines, 790 F.2d 22, 24 (3d Cir. 1986) (citing Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., 652 F.2d 1165, 1167 (3d Cir. 1981). The question remains whether it is appropriate under the Burford abstention doctrine for us to make such a prediction.

 We do not find that this case presents difficult questions of state law or policy with which our ruling would interfere. This case is not analogous to Burford where the federal court's exercise of jurisdiction would have interfered with an extensive state regulatory system. In that case, the Supreme Court held that the district court should have abstained from deciding the reasonableness of a state commission's permit to drill oil. Similarly, in Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 3 L. Ed. 2d 1058, 79 S. Ct. 1070 (1959), the Supreme Court held that the district court should have abstained from considering the scope of eminent domain power of municipalities under state law. In both of these cases, federal court review would have seriously disrupted the state's establishment of its own policies. See also, Kaiser Steel Corp. v. W. S. Ranch Co., 391 U.S. 593, 20 L. Ed. 2d 835, 88 S. Ct. 1753 (1968); Hawks v. Hamill, 288 U.S. 52, 77 L. Ed. 610, 53 S. Ct. 240 (1933). We do not feel that our intervention in this matter would be as disruptive.


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