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Nationwide Agribusiness Insurance Co. v. Sheriff

United States District Court, M.D. Pennsylvania

January 27, 2015

NATIONWIDE AGRIBUSINESS INSURANCE COMPANY Plaintiff,
v.
LOGAN W. SHERIFF, GEORGE UNGEMACH AND KAREN UNGEMACH, his wife, MICHAEL UNGEMACH AND HENRY SELLS, JR., Defendants.

MEMORANDUM

JOHN E. JONES, III, District Judge.

Presently pending before the Court are two Motions to Dismiss Plaintiff's Action for Declaratory Relief Pursuant to Federal Rule of Civil Procedure 12(b)(1), one filed by Defendant Logan Sheriff (Doc. 5) and one filed by Defendant Henry Sell, Jr. (Doc. 19). For the reasons that follow, we will grant both motions to dismiss, thus declining to exercise our jurisdiction in the matter sub judice . Our dismissal is without prejudice to the parties' ability to seek a declaratory judgment in state court.

I. PROCEDURAL HISTORY

On October 29, 2014, Plaintiff Nationwide Agribusiness Insurance Company ("Nationwide") filed a Complaint against all Defendants. (Doc. 1). With this action, Nationwide seeks declaratory relief and a determination of the respective rights and responsibilities of the parties with regard to the liability insurance policy at issue in this matter, which was issued by Nationwide to Michael Ungemach, George Ungemach, Michael Ungemach-Partner as insureds.

Defendant Logan Sheriff ("Sheriff") filed a Motion to Dismiss Plaintiff's Action on November 17, 2014. (Doc. 5). Sheriff filed his brief in support of the Motion on December 1, 2014. (Doc. 13). Nationwide filed its brief in opposition to the Motion on December 15, 2014. (Doc. 14). Defendants George Ungemach, Karen Ungemach, and Michael Ungemach (collectively the "Ungemachs") also filed a brief in support of Sheriff's Motion on December 18, 2014. (Doc. 15). Sheriff filed his reply brief on December 24, 2014. (Doc. 23). Nationwide filed a reply brief in opposition to the Ungemachs' brief on December 31, 2014. (Doc. 28). Thus, having been fully briefed by the parties, this Motion is ripe for our review.

Additionally, on December 23, 2014, Defendant Henry Sells, Jr. ("Sells") filed a Motion to Dismiss the Action. (Doc. 19). Sells filed a brief in support of the Motion on the same day. (Doc. 20). Nationwide filed its brief in opposition to this Motion on January 5, 2015. (Doc. 30). The time for Sells to file a reply brief has expired. This Motion is also ripe for our review.

II. FACTUAL SUMMARY

The facts, as pleaded in the Complaint, are as follows: Nationwide is an Ohio corporation with its principal offices in Columbus, Ohio. (Doc. 1, ¶ 6). All of the Defendants are residents of Palmyra, Lebanon County, Pennsylvania. ( Id., ¶ 7-10). Nationwide issued a Farmowners Policy and Farm Umbrella Policy, Number FPKN FMPN XXXXXXXXXX, to the Ungemachs (the "Policy"). ( Id., ¶ 11). The Policy period covered April 22, 2013 to April 22, 2014. ( Id. ) The Policy covered the Named Insureds, and any other person or organization qualifying as a Named Insured under the Policy. Specifically, it protected the Named Insureds from liability for bodily injury and property damage occurring on the Ungemachs' farm located at 200 Chestnut Hill Road, in Palmyra, Pennsylvania. ( Id., ¶ 12). This protection from liability was subject to restrictions and exclusions, detailed in the Policy documents. ( Id. )

This declaratory judgment action concerning the Nationwide Policy has its origins in an alleged accident injuring a young man, Logan Sheriff, on the Ungemach farm. On or about June 4, 2014, Sheriff filed a personal injury lawsuit in the Lebanon County Court of Common Pleas, alleging that he was injured while attempting to clean the heaters in the chicken houses on the Ungemach farm on November 19, 2013. ( Id., ¶ 19-20). Sheriff's alleged injuries include severe personal injuries and economic loss. ( Id., ¶ 20). Sheriff's suit asserted claims of negligence against the Ungemachs and Henry Sells, Jr. ( Id., Ex. B).

According to the Sheriff Complaint, Sheriff was employed at Porr Pig Farm in Lebanon County, working for a man named Robert Porr. ( Id., ¶ 21). Nationwide alleges that the Sheriff Complaint states that in November 2013, George Ungemach asked Porr if he could "borrow Logan on a temporary basis" to have him milk cows. ( Id., ¶ 22). Porr said he would discuss this possibility with Sheriff. ( Id. ) Sheriff then contacted George Ungemach, confirming he was willing to work on a temporary basis. ( Id., ¶ 24). The parties dispute whether Sheriff should be categorized as an "employee" or a "temporary worker" of the Ungemachs, because the categorization will decide whether the Nationwide Policy covers liability resulting from the alleged accident. The Policy contains an employers' liability exclusion, meaning that if Sheriff is considered an employee of the Ungemachs, as opposed to a temporary worker, the Policy does not cover liability resulting from the accident. ( Id., ¶ 55-56).

Additionally, there are two state court declaratory judgment actions pending between the parties. Sheriff filed the first state declaratory action, and then George and Michael Ungemach filed the second one. (Docs. 14-3, 30, 32). Both are pending before the Lebanon County Court of Common Pleas. Nationwide intends to seek dismissal of both of these state actions, on the grounds they were filed after Nationwide filed the instant declaratory judgment action in federal court. (Docs. 30, 32).

III. DISCUSSION

A. Abstention Under the Declaratory Judgment Act

Under the Declaratory Judgment Act, federal courts have discretionary jurisdiction to "declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." Reifer v. Westport Ins. Corp., 751 F.3d 129 (3d Cir. 2014) (citing 28 U.S.C. § 2201(a)). The federal court's discretion is broad, and is informed by "considerations of practicality and wise judicial administration" in deciding whether to hear the case. Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995). Thus, prior to considering the merits of such an action, "it is necessary to determine whether the Court should even entertain [the] ...


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