The opinion of the court was delivered by: ANITA B. BRODY
Before me is defendant's motion for abstention or, in the alternative, dismissal for failure to join an indispensable party. The issues before me are:
1. Whether the Burford abstention doctrine permits me to decline jurisdiction over an ordinary contract claim between diverse parties because the contract in issue is an agreement to sell an insurance company. I hold that it does not.
2. Whether abstention under the Colorado River doctrine is justified solely by the existence of related litigation in state court. I hold that it is not.
3. Whether the Pennsylvania Commissioner of Insurance is a necessary party to a dispute over a contract to transfer ownership of a Pennsylvania insurance company. I hold that she is not. The Motion to Dismiss will be denied.
This is a breach of contract case between two individuals of diverse citizenship. Plaintiff, Woodrow B. Kessler, alleges that he is a minority stockholder in American Health & Accident Insurance Company (AHAIC), a Pennsylvania corporation engaged in the insurance business. Kessler alleges that the defendant, Charles J. Pollick, agreed to sell Kessler the remainder of the stock of AHAIC, and that Pollick has now refused to consummate the sale because Kessler requested an opportunity to look at the company's books. Kessler further alleges that Pollick has diverted many of the company's assets to his other companies, and has engaged in a concerted effort to gut the company prior to sale.
Pollick responds by way of a Motion to Dismiss on two grounds: abstention and failure to join an indispensable party.
Pollick argues that, because the Pennsylvania Department of Insurance regulates everything about insurance companies and must give the final approval before a transfer of ownership of an insurance company, this court should refrain from exercising jurisdiction under the reasoning of Burford v. Sun Oil Co., 319 U.S. 315, 87 L. Ed. 1424, 63 S. Ct. 1098 (1943). Alternatively, he urges this court to abstain in the interests of "wise judicial administration" under the reasoning of Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976).
Where a case conforms to the requirements of one of the established abstention doctrines, the decision of whether or not to abstain is discretionary; I have no authority, however, to decline to exercise jurisdiction in a case that does not meet the traditional requirements for abstention. Colorado River, 424 U.S. at 817; United Services Auto Ass'n. v. Muir, 792 F.2d 356, 361 (3d Cir. 1986), cert. denied, 479 U.S. 1031, 93 L. Ed. 2d 830, 107 S. Ct. 875 (1987). Because this case does not fall within one of the traditional abstention doctrines, I need not address whether the equities of the case justify abstention.
A. Abstention under Burford
The Burford doctrine holds that federal courts should decline to interfere with state regulation of state resources or of matters that are particularly within the state's expertise. The Third Circuit has held that abstention is appropriate to avoid federal court interference with Pennsylvania's regulation of insolvent insurance companies. Lac D'Amiante du Quebec, Ltee v. American Home Assurance Co., 864 F.2d 1033 (3d Cir. 1988). If this case involved an attempt by the plaintiff to interfere with the Insurance Department's control over the transfer of AHAIC, the reasoning of American Home would govern.