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Allstate Insurance Co. and Allstate v. Manilla

April 20, 2012

ALLSTATE INSURANCE CO. AND ALLSTATE PROPERTY & CASUALTY INSURANCE CO., PLAINTIFFS,
v.
MANILLA, ET AL., DEFENDANTS.



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

MEMORANDUM RE: MOTION TO DISMISS

I. Introduction

Plaintiffs Allstate Insurance Company and Allstate Property and Casualty Insurance Company (collectively, "Plaintiffs") brought this declaratory judgment action, pursuant to 28 U.S.C. § 2201, over the terms of a homeowners insurance policy. Defendant Theresa Lynn Groh ("Ms. Groh") filed a Motion to Dismiss (ECF No. 9), asking the Court to decline to exercise its discretionary jurisdiction over the case, arguing that there are no federal law issues and a parallel state court action is the better forum to decide the Pennsylvania law issue. For the reasons that follow, the Court will grant the Motion and dismiss the case.

II. Factual and Procedural Background

The case traces back to November 29, 2010,when Defendant David Manilla shot and killed Barry Groh, Ms. Groh's late husband, while hunting. See generally Bucks County Wrongful Death Complaint, Compl. Ex. C. Ms. Groh, individually and as Administratrix of her late husband's estate,filed a Complaint in the Court of Common Pleas of Bucks County, Pennsylvania, asserting wrongful death and survival actions against Mr. Manilla ("Bucks County Action"). Compl. ¶ 8. At the time of the incident, Mr. Manilla was the named insured under Plaintiff Allstate Insurance Company's Deluxe Plus Homeowners Policy and his mother, Vivian Manilla, was the named insured under Plaintiff Allstate Property and Casualty Insurance Company's Homeowners Policy. Compl. ¶¶ 5-7. Plaintiffs then filed the present action against David and Vivian Manilla, asking this Court to declare that under certain exclusionary provisions of the respective Homeowners Policies,*fn1 they are not required to defend or indemnify Mr. Manilla for the claims Ms. Groh asserted in the Bucks County Action. Compl. at 6. Ms. Groh filed an uncontested Motion to Intervene on February 16, 2102, which this Court granted the following day (ECF No. 8).On March 12, 2012 Ms. Groh filed a declaratory judgment action in the Court of Common Pleas of Bucks County, asking that court to decide the same issues before this Court in the current action. Pls. Br. at 2; Bucks County Declaratory Judgment Complaint, Ex. A to Def. Reply Br.

III. Discussion

A. The Declaratory Judgment Act

The Declaratory Judgment Act grants federal district courts jurisdiction "to declare the rights and other legal relations of any interested party seeking such a declaration." 28 U.S.C. § 2201(a). The Act is somewhat unique, however, in that district courts have discretion whether or not to exercise that jurisdiction. Id. (providing that a court "may" declare such rights and legal relationships); Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494 (1942); Wilton v. Seven Falls Co., 515 U.S. 277, 287-88 (1995) ("In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration."); State Auto. Ins. Cos. v. Summy, 234 F.3d 131, 133 (3d Cir. 2000) ("The [Supreme] Court [in Brillhart] emphasized that the jurisdiction conferred by the Act was discretionary, and district courts were under no compulsion to exercise it." (citation omitted)). The Supreme Court has explained the rationale behind the grant of discretionary jurisdiction:

Ordinarily it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties. Gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided.

Summy, 234 F.3d at 133 (quoting Brillhart, 316 U.S. at 495).

The Supreme Court and the Third Circuit have delineated factors district courts should weigh in deciding whether or not to exercise jurisdiction in such cases. A critical inquiry is "whether the questions in controversy between the parties to the federal suit, and which [were] not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court." Summy, 234 F.3d at 133 (quoting Brillhart, 316 U.S. at 495). The Third Circuit has expounded three additional considerations in declaratory judgment actions regarding insurance coverage disputes:

1. A general policy of restraint when the same issues are pending in a state court;

2. An inherent conflict of interest between an insurer's duty to defend in a state court and its attempt to characterize that suit in federal court as ...


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