United States District Court, E.D. Pennsylvania
Matthew Schodle has moved to remand this action to the Court
of Common Pleas of Philadelphia County, Pennsylvania.
originally brought this action in the state court against his
insurer, defendant State Farm Mutual Automobile Insurance
Company. State Farm subsequently removed the case to this
court pursuant to the court's diversity jurisdiction.
Schodle is a citizen of Florida, while State Farm is
incorporated in and has its principal place of business in
Illinois. The amount in controversy exceeds $75, 000,
exclusive of interest and costs. See 28 U.S.C.
complaint asserts two claims for relief, one for declaratory
judgment and the second for breach of contract. His claims
arise out of a March 23, 2014 motor vehicle accident during
which Schodle was injured while he was a passenger in a
vehicle operated by Jason Keyser. Schodle settled with Keyser
for Keyser's policy limits. Schodle now seeks additional
compensation pursuant to the underinsured provisions of his
parents' State Farm personal automobile insurance
policies under which he is an insured.
were two State Farm personal automobile insurance policies in
effect at the time of the accident. The first policy was
issued to the plaintiff's father, Robert H. Schodle, and
the second policy was issued to the plaintiff's father
and mother, Robert H. Schodle and Rita Marie
Schodle.According to the complaint, the
plaintiff's father had also executed a form entitled
“Pennsylvania Underinsured Motorist Coverage
(Acknowledgment of Coverage Selection).” This form
purports to limit the amount of coverage available to an
insured with regard to one of the two insurance policies.
However, the section of the form identifying which of the two
policies it references appears to be illegible.
to the complaint, State Farm takes the position that the form
signed by the plaintiff's father limits recovery to $130,
000. Although Schodle concedes that the form must apply to
one of the insurance policies, he asserts that because it is
illegible it must be construed in his favor as the insured.
Thus, he avers that the form should be applied so as to allow
him to recover up to $215, 000. In Count One of his complaint,
Schodle seeks a declaratory judgment that he is entitled to
recover $215, 000 in underinsured motorist benefits under the
insurance policies. In Count Two, Schodle asserts a claim for
breach of contract in which he seeks an award of compensatory
damages under the insurance policies.
argues that we should remand this case to the Court of Common
Pleas of Philadelphia County. He contends that we should
decline to exercise jurisdiction over this cause of action
because his complaint includes a claim seeking a declaratory
judgment that he is entitled to recover up to $215, 000 in
addition to a claim for breach of contract seeking $215, 000
in damages. In response, State Farm argues that Count One of
the complaint is not a proper claim for declaratory judgment
and that remand is not appropriate because the district court
is required to exercise jurisdiction over the breach of
“general rule [ ] ‘federal courts have a strict
duty to exercise the jurisdiction that is conferred upon them
by Congress.'” See Reifer v. Westport Ins.
Corp., 751 F.3d 129, 134-35 (3d Cir. 2014) (quoting
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716
(1996)). However, the Declaratory Judgment Act provides that
a federal court “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.”
See 28 U.S.C. § 2201. Thus, the Declaratory
Judgment Act makes an exception to the general rule and
grants federal courts discretion to decline to exercise
jurisdiction over a claim for declaratory relief under
certain circumstances. See Rarick v. Federated
Serv. Ins. Co., F.3d, 2017 WL 1149099, at *1 (3d Cir.
Mar. 28, 2016) (citing Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800,
817 (1976); Brillhart v. Excess Ins. Co. of Am., 316
U.S. 491, 494 (1942)).
the last few days, our Court of Appeals has “h[e]ld
that the independent claim test is the applicable legal
standard for review of a complaint that seeks both legal and
declaratory relief.” See id. at *5. This test
When a complaint contains claims for both legal and
declaratory relief, a district court must determine whether
the legal claims are independent of the declaratory claims.
If the legal claims are independent, the court has a
“virtually unflagging obligation” to hear those
claims, subject of course to Colorado River's
exceptional circumstances. Colo. River, 424 U.S. at
817-19. If the legal claims are dependent on the declaratory
claims, however, the court retains discretion to decline
jurisdiction of the entire action, consistent with our
decision in Reifer, 751 F.3d at 144-46.
Id. at *4. “Non-declaratory claims are
‘independent' of a declaratory claim when they are
alone sufficient to invoke the court's subject matter
jurisdiction and can be adjudicated without the requested
declaratory relief.” Id. (quoting R.R. St.
& Co., Inc. v. Vulcan Materials Co., 569 F.3d 711,
715 (7th Cir. 2009)). If the claims are independent, the
district court must retain jurisdiction over the
non-declaratory claim unless the exceptional circumstances
set forth in Colorado River apply. See id.
Generally, the court should retain jurisdiction over the
entire matter to avoid piecemeal litigation. See id.
exceptional circumstances warranting abstention in
Colorado River “rest on considerations of
‘(w)ise judicial administration, giving regard to
conservation of judicial resources and comprehensive
disposition of litigation.'” See Colo.
River, 424 U.S. at 817 (quoting Kerotest Mfg. Co. v.
C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)).
Those circumstances “permit[ ] the dismissal of a
federal suit due to the presence of a concurrent state
proceeding for reasons of wise judicial administration”
after weighing “such factors as the inconvenience of
the federal forum, . . . the desirability of avoiding
piecemeal litigation, . . . and the order in which
jurisdiction was obtained by the concurrent forums.”
See id. at 817-18 (citations omitted).
to the case before us, the motion to remand must be denied.
The non-declaratory breach of contract claim is independent
of the declaratory judgment claim inasmuch as it is alone
sufficient to invoke subject matter jurisdiction and can be
adjudicated even if the claim for declaratory judgment was to
be dismissed. The breach of contract claim is the essence of
this lawsuit. The insured surely wants monetary relief, not
simply a declaration of his rights. The case before us is
somewhat unusual in that it is the insured, rather than the
insurer, who seeks declaratory relief. It is puzzling that he
has brought this extraneous claim which really adds nothing
to his case. We need not decide if it is an effort at artful
pleading designed to defeat federal jurisdiction.
further find that the exceptional circumstances set forth in
Colorado River do not exist here. See Colo.
River, 424 U.S. at 817-19. There is no concurrent state
court proceeding, the federal forum does not unduly