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Westfield Insurance Company v. Cynthia Wertz

May 24, 2011

WESTFIELD INSURANCE COMPANY, PLAINTIFF,
v.
CYNTHIA WERTZ, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM OF LAW

Presently before the Court is Defendants Stephen Chesna and Diane Chesna's Motion Pursuant to Rule 12(b)(1) to Dismiss for Lack of Subject-Matter Jurisdiction (ECF No. 9). This Court has jurisdiction over this action under 28 U.S.C. § 1332. For the following reasons, the Motion shall be denied.

I. BACKGROUND

Plaintiff Westfield Insurance Company ("Westfield") filed this action for a declaratory judgment that it has no duty to indemnify or defend David and Cynthia Wertz (collectively, the "Wertz Defendants") against a lawsuit brought in state court by Stephen and Diane Chesna (collectively, the "Chesna Defendants").

In the personal injury action underlying the instant coverage dispute, the Chesna Defendants allege that they were injured in an automobile accident caused by the Wertz Defendants' negligent conduct, including Ms. Wertz's decision to drive while intoxicated.

At issue in the present case is a business auto insurance policy issued by Westfield to Mr. Wertz's employer, T.H. Properties. Under that policy, Westfield is obligated to defend and indemnify its "insured," defined in pertinent part as someone using a covered auto with permission. Westfield contends that as Ms. Wertz was not operating the vehicle with the permission of T.H. Properties, she and Mr. Wertz are not "insureds" entitled to coverage under the policy.

The Chesna Defendants filed the instant motion to dismiss, arguing that this Court should decline to exercise its jurisdiction under the Declaratory Judgment Act. Westfield and the Wertz Defendants*fn1 have now responded and the matter is ripe for disposition.

II. LEGAL STANDARD

The Declaratory Judgment Act provides in relevant part that "[i]n a case of actual controversy within its jurisdiction, . . . 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." 28 U.S.C. § 2201(a). "[J]urisdiction conferred by the Act [is] discretionary, and district courts [are] under no compulsion to exercise it." State Auto Ins. Cos. v. Summy, 234 F.3d 131, 133 (3d Cir. 2000) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942)). The Supreme Court has instructed that district courts "should ascertain whether the questions in controversy between the parties to the federal suit . . . can better be settled in the proceedings pending in the state court. This may entail inquiry into the scope of the pending state court proceeding and the nature of defenses open there." Brillhart, 316 U.S. at 495. In evaluating whether to exercise jurisdiction under the Act, courts should consider four factors:

(1) the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy;

(2) the convenience of the parties; (3) the public interest in settlement of the uncertainty of obligation; and

(4) the availability and relative convenience of other remedies.

United States v. Pa. Dep't of Envtl. Res., 923 F.2d 1071, 1075 (3d Cir. 1991). Furthermore, in the insurance coverage context, district courts should ...


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