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First Mercury Ins. Co. v. Legends, Inc.

United States District Court, E.D. Pennsylvania

December 19, 2012

FIRST MERCURY INSURANCE COMPANY, Plaintiff,
v.
LEGENDS, INC., et al., Defendants.

Page 645

Wendy H. Koch, Susan Simpson Brown, Koch and Corboy, Jenkintown, PA, for Plaintiff.

David R. Dautrich, Sr., Dautrich & Dautrich, Reading, PA, for Defendants.

Page 646

MEMORANDUM RE: MOTION TO DISMISS

BAYLSON, District Judge.

I. Introduction

Plaintiff First Mercury Insurance Company (" Plaintiff" ) brought this declaratory judgment action (the " Federal Action" ), pursuant to 28 U.S.C. ยง 2201, in order to determine the applicability of certain coverage exceptions in a policy it issued to Defendant Legends, Inc. (" Legends" ). Defendants Legends and Jobin J. Granstrom (" Granstrom" ) (collectively, " Moving Defendants [1]" ) filed a Motion to Dismiss (ECF 9) (the " Motion" ), arguing that the Court should decline to exercise its discretionary jurisdiction over this case, because the same issues are also being litigated in a Pennsylvania state court action (the " State Action" ), and the Third Circuit's ruling in State Auto. Ins. Cos. v. Summy, 234 F.3d 131 (3d Cir.2000), mandates that the state forum decide them. For the reasons that follow, the Court will GRANT the Motion and exercise its discretion to decline jurisdiction over the Federal Action.

II. Background

A. Factual and Procedural Background

Plaintiff issued an insurance policy to Legends that covered, among other things, various potential liabilities related to Legends's owning and operating a bar/restaurant (the " Policy" ). The Policy contains a choice of law clause selecting Illinois law, as well as a non-exclusive forum selection clause that gives Plaintiff the option to litigate in Illinois.

During the effective period of the Policy, Granstrom, a Legends employee, allegedly roughed up and gruffly ejected from Legends's bar a man named Jordan Seyler (" Seyler" ). Seyler, allegedly injured by Granstrom's manhandling, brought suit in the Pennsylvania Court of Common Pleas, Berks County against, among others, Legends and Granstrom, claiming that Granstrom was acting in his capacity as a Legends employee at the time he allegedly attacked Seyler (the " Underlying Action" ).

Sometime before July 12, 2011, Legends requested that pursuant to the Policy, Plaintiff pay Legends's and Granstrom's defense costs and indemnify them for any liabilities resulting from the Underlying Action. By letter dated July 12, 2011, Plaintiff rejected Legends's request, stating that the nature of Seyler's claims triggered certain coverage exceptions in the Policy that relieved Plaintiff of any defense and indemnification obligations.

Plaintiff filed this Federal Action on March 27, 2012 claiming that certain coverage exceptions relieve it of any obligation to defend or indemnify Defendants in the Underlying Action. Moving Defendants filed their Answer (ECF 5) on May 18, 2012, asserting numerous affirmative defenses.

Moving Defendants filed the instant Motion to Dismiss on July 11, 2012 (ECF 9). Plaintiff responded on July 30, 2012 (ECF 21). The Court held oral argument on September 19, 2012. At oral argument counsel suggested that the Underlying Action was still pending in the Berks County Court of Common Pleas. However, exhibits to the briefs established that the Underlying Action had been dismissed without prejudice on January 13, 2012. By Order dated October 4, 2012 (ECF 37) this ...


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