United States District Court, M.D. Pennsylvania
KAROLINE MEHALCHICK UNITED STATES MAGISTRATE JUDGE
This is a declaratory judgment action arising out of a 2011 motor vehicle accident. Presently before the Court is a motion for summary judgment filed by Plaintiff National Specialty Insurance Company (“National Specialty”). (Doc. 50). The motion has been fully briefed, and oral argument on the motion was held on May 18, 2015. There are no material issues of fact in dispute in this case. For the reasons that follow, the motion (Doc. 50) will be granted.
I. Factual and Procedural Background
Plaintiff National Specialty instituted this lawsuit against Defendants Advanced Cargo Transportation, Inc. (“Advanced Cargo”), Washington Munozarevalo, Custom Polymers, Inc. (“Custom Polymers”), Alec Sewatsky, Ryan Barrett, Lindsay Barrett, Caroline Mullally, and Grace Sato on July 24, 2014, seeking a declaration of its rights, obligations, and liabilities with respect to an insurance contract it had with Advanced Cargo.
The undisputed facts are as follows. On October 10, 2011, a motor vehicle accident occurred on Interstate 80 in Luzerne County involving a tractor trailer owned by Advanced Cargo and operated by Washington Munozarevalo. (Doc. 51, at ¶ 1-2; Doc. 54-3, at ¶ 1-2). The tractor trailer was transporting goods on behalf of Custom Polymers in accordance with a shipping agreement between Custom Polymers and Advanced Cargo. (Doc. 51, at ¶ 4; Doc. 54-3, at ¶ 5). At the time of the accident, National Specialty insured Advanced Cargo and Washington Munozarevalo pursuant to a policy that provided for $1 million in liability coverage. (Doc. 51, at ¶ 5-6; Doc. 54-2, at ¶ 5-6). Alec Sewatsky, Ryan Barrett, Lindsay Barrett, Caroline Mullally, and Grace Soto-along with two other individuals who are not parties to this action-each made claims against Advanced Cargo, Washington Munozarevalo, and insurer National Specialty as a result of the accident. (Doc. 51, at ¶ 7-14; Doc. 54-2, at ¶ 7-14). National Specialty settled each of these claims, and in the process paid out the $1 million in liability coverage provided in its contract with Advanced Cargo. (Doc. 51, at ¶ 15; Doc. 54-3, at ¶ 4).
In 2013, after the settlement of each of the above-mentioned claims, Defendants Alec Sewatsky, Ryan Barrett, Lindsay Barrett, Caroline Mullally, and Grace Soto brought a suit against Defendant Custom Polymers in the United States District Court for the Middle District of Pennsylvania (No. 3:13-CV-02450), alleging negligent entrustment and negligence arising from the shipping agreement between Custom Polymers and Advanced Cargo (the “Custom Polymers action”). (Doc. 51, at ¶ 16-17; Doc. 54-3, at ¶ 5). In turn, Custom Polymers filed a third party action against Advanced Cargo and Washington Munozarevalo asserting claims of sole liability as well as contribution and indemnity. (Doc. 51, at ¶ 18; Doc. 54-3, at ¶ 6). National Specialty provided an initial legal defense for Advanced Cargo and Munozarevalo after they were joined as parties in the Custom Polymers action, but National Specialty has since accepted assignment of the defense to Matthew Slocum of The Slocum Firm P.C. (Doc. 51, at ¶ 19; Doc. 54-3, at ¶ 12).
On July 24, 2014, National Specialty filed the action now before this Court seeking a declaration as to its further rights, obligations, and liabilities with respect to Advanced Cargo and Munozarevalo in light of the ongoing Custom Polymers action. (Doc. 1). Advanced Cargo filed an answer on September 24, 2014. (Doc. 21). Once all parties were served process, National Specialty filed the instant motion for summary judgment on February 19, 2015 (Doc. 50), along with a brief in support of its motion (Doc. 52), and a statement of facts (Doc. 51). On March 5, 2015, Advanced Cargo filed a brief in opposition to the motion for summary judgment (Doc. 54), and its own statement of facts (Doc. 54-3). National Specialty filed a reply brief on March 10, 2015 (Doc. 55), to which Advanced Cargo responded with a sur reply the following day (Doc. 56). At oral argument on May 18, 2015, the parties agreed that no material issues of fact remained in dispute. This case, having been fully briefed and presented at oral argument, is now ripe for disposition.
National Specialty seeks a declaratory judgment identifying its rights, obligations, and liabilities with respect to Defendants Advanced Cargo and Munozarevalo. The Declaratory Judgment Act provides, in relevant part:
(a) In 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, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
28 U.S.C. § 2201(a). The Declaratory Judgment Act does not provide a stand-alone basis for federal jurisdiction; a trial court may only exercise jurisdiction over a declaratory judgment action where a separate basis for jurisdiction already exists. See Clevenger v. First Option Health Plan of New Jersey, 208 F.Supp.2d 463, 468 (D.N.J. 2002). Here, this Court has diversity of citizenship jurisdiction over the parties pursuant to 28 U.S.C. § 1332.
Even where subject matter jurisdiction exists, however, the United States Court of Appeals for the Third Circuit has instructed its lower courts to use discretion in determining whether to exercise jurisdiction over a declaratory judgment action. State Auto Ins. Cos. v. Summy, 234 F.3d 131, 133 (3d Cir. 2000). “The question in each case is whether the facts alleged show that there is a substantial controversy, between parties having adverse legal interests, ‘of sufficient immediacy and reality to justify judicial resolution.’” Peachlum v. City of York, Pa., 333 F.3d 429, 434 (3d Cir. 2003) (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). This Court concludes that National Specialty’s complaint states a real and concrete controversy that is ripe for a determination of legal obligations. “Declaratory suits to determine the scope of insurance coverage have often been brought independently of the underlying claims” even if the insured’s liability in the underlying claim is yet to be established.
ACandS, Inc. v. Aetna Cas. & Sur. Co.,
666 F.2d 819, 823 (3d Cir. 1981). “Moreover, that the adjudication [of the declaratory suit] will not result in any immediate payment of damages by the litigants here is not determinative.” ACandS, 666 F.2d at 823 (citations omitted). Although National Specialty is not currently providing a defense for Advanced Cargo, a determination of the legal obligations sought in this motion would impact how all parties proceed in the Custom Polymers action. See ACandS, Inc., 666 F.2d at 823; Worster-Sims v. Tropicana Entm't, Inc., No. CIV. 13-1981 RBK/AMD, 2014 WL 4978588, at *3-4 ...