United States District Court, W.D. Pennsylvania
Barry Fischer United States District Judge
a declaratory judgment action brought by Plaintiff-insurer
Cypress Insurance Company (“Cypress”) arising
from the attempted collection of a default judgment of $975,
000.00 entered in favor of Defendant David K. Barren
(“Barren”) and against Defendant-insured Mickens
Transportation Specialists, (“Mickens
Transportation”) in state court in South Carolina.
(Docket No. 1). Presently before the Court is a motion filed
by Barren seeking dismissal and/or transfer of this action to
the U.S. District Court for the District of South Carolina
where a related action is pending. (Docket No. 6, 10).
Cypress opposes the motion. (Docket No. 12). Mickens
Transportation has not yet formally appeared in this
case. After careful consideration of the
parties' positions, and for the following reasons,
Barren's Motion  is granted to the extent that the
Court will transfer this matter pursuant to the “first
filed rule” or alternatively, under the discretionary
transfer statute, 28 U.S.C. § 1404(a).
of background, the underlying state court lawsuit involved a
trucking accident that occurred on August 1, 2014 in Saint
Matthews, South Carolina, during which a driver employed by
Mickens Transportation drove into Barren, who was walking on
the grounds of a gas station, causing him substantial
injuries. (Docket No. 1 at ¶¶ 7-10). As Mickens
Transportation's insurer, Cypress was made aware of the
accident and the potential for a claim, hiring a
Georgia-based company, Bridgewater, as its investigator.
(Id. at ¶ 13). Mickens Transportation was
served with the lawsuit but apparently did not timely respond
to the state court action. (Id. at ¶¶
22-27). At a default judgment hearing, a state court in South
Carolina awarded $975, 000.00 in damages in favor of Barren
and against Mickens Transportation. (Id. at ¶
30). James Mickens apparently appeared at the hearing without
counsel and testified. (Id. at ¶ 29).
Thereafter, Barren sought to collect the judgment from
Cypress and much litigation has ensued, with one of the
central disputes being whether Mickens Transportation and/or
Barren notified Cypress of the underlying lawsuit, the
default or the default judgment hearing. (Id. at
present, there is litigation surrounding this default
judgment in three different courts: (1) the removed case in
the United States District Court for the District of South
Carolina at Docket Number 5:17-cv-00772 which was filed
initially by Barren in state court on February 20,
2017 and where Cypress has counterclaims pending; (2)
this federal case filed by Cypress on February 24,
2017, where Cypress has claims pending; and, (3) the
underlying state court action where on February 27,
2017, counsel entered an appearance for Mickens
Transportation and moved to set aside the default judgment
and Cypress also moved to intervene into the proceedings,
both of which are pending. All three of these actions taken
by Cypress have the same general goal, i.e., to set aside the
default judgment and avoid paying the $975, 000.00 default
judgment against its insured, Mickens Transportation.
Cypress admits that the declaratory judgment claims raised in
this case are identical to the counterclaims it has
now asserted in federal court in South Carolina.
(See Docket No. 12 at 12 “Out of an abundance
of caution, Cypress had filed as counterclaims in South
Carolina all the claims it first raised in this action (and
will file similar counterclaims in response to the amended
complaint), although Cypress prefers to have the dispute
heard in this Court.”). In both federal cases, Cypress
seeks declaratory judgments of: (1) late notice in that
Mickens Transportation did not notify it of the underlying
state court action to which Mickens Transportation did not
timely respond and that resulted in the default judgment; (2)
the MCS-90 endorsement requiring that the insurer pay any
judgment should not be enforced as to the default judgment
obtained in the South Carolina state court matter; and (3)
extrinsic fraud in procurement of the judgment by Barren and
Mickens Transportation. (Docket No. 1). As noted, it appears
that the state court in South Carolina has not yet issued a
decision on the motion to set aside the default judgment
filed by Mickens Transportation or the motion to intervene
filed by Cypress. See David K. Barren v. Mickens
Transportation Specialists, Inc., Case No.
2015-CP-0900135, (C.P., Calhoun Cty., S.C.).
respect to the present matter, Cypress seeks to invoke the
diversity jurisdiction of this Court under 28 U.S.C. §
1332(a)(1) as well as the Court's authority to declare
the parties' rights under the Declaratory Judgment Act,
28 U.S.C. § 2201. (Id. at ¶ 1). The
parties are diverse as Cypress is a citizen of Nebraska and
California; Mickens is a citizen of Georgia; and Barren is a
citizen of Pennsylvania. (Id. at ¶¶ 1-3).
The matter in controversy exceeds $75, 000.00 because the
action seeks to invalidate the state court judgment of $975,
000.00. (Id. at ¶¶ 5, 47).
filed the pending motion to dismiss/transfer and his brief in
support on March 31, 2017. (Docket Nos. 6; 10). Cypress
responded by filing its brief in opposition on April 21,
0217. (Docket No. 12). The Court considers the matter fully
briefed and ripe for disposition.
to the applicable legal standards, the determinations of
whether to dismiss or transfer a case under the “first
filed rule” or to transfer a matter under 28 U.S.C.
§ 1404(a) are committed to the sound discretion of the
trial court. See Chavez v. Dole Food Co., Inc., 836
F.3d 205, 220 (3d Cir. 2016) (district court has discretion
to transfer matter under first filed rule); Ogundoju v.
Attorney General of U.S., 390 F. App'x. 134, 137 n.2
(3d Cir. 2010) (district court has discretion to transfer
matter under 1404(a)). It is this Court's opinion that it
is an appropriate exercise of discretion to transfer this
case to the District of South Carolina under both legal
principles. Id. It will be up to the presiding Judge
in South Carolina to determine whether it is appropriate to:
stay the federal declaratory judgment claims/counterclaims in
favor of the pending state court litigation to set aside the
judgment; dismiss the action under Rule 12(b)(6); or decline
to exercise jurisdiction over the matter under the
Declaratory Judgment Act. The Court briefly turns to its
rationale supporting the decision to transfer this
duplicative and subsequently filed case to South Carolina.
well-established that courts have broad discretion to manage
cases in an effort to avoid wasteful and duplicative
litigation. See, e.g., Colorado River Water Cons. Dist.
v. United States, 424 U.S. 800, 817 (1976). The recent
amendments to Rule 1 of the Federal Rules of Civil Procedure
should make clear that the parties share the responsibilities
with the Court to “secure the just, speedy, and
inexpensive determination of every action and
proceeding.” See Fed. R. Civ. P. 1 (eff. Dec.
1, 2015). In this regard, the “first-filed” rule
“is a comity-based doctrine stating that when
duplicative lawsuits are filed successively in two different
federal courts, the court where the action was filed first
has priority.” Chavez, 836 F.3d at 210.
“A district court applying the first-filed rule has the
ability to ‘enjoin the subsequent prosecution of
proceedings involving the same parties and the same issues
already before another district court.'”
Sinclair Cattle Co. Inc., v. Ward, 80 F.Supp.3d 553,
558 (M.D. Pa. 2015) (quoting EEOC v. Univ. of
Pennsylvania, 850 F.2d 969, 971 (3d Cir. 1988)).
“[I]n the vast majority of cases, a court exercising
its discretion under the first-filed rule should stay or
transfer a second-filed suit.” Chavez, 836
F.3d at 220.
there is no dispute that Barren's state court lawsuit
which is now pending in the District of South Carolina was
the first filed action. (Docket Nos. 10; 12). In addition,
Cypress admits that its claims in this lawsuit and its
counterclaims in the South Carolina suit are
identical and this Court's review of both
pleadings confirms same. (See Docket Nos. 1; 12).
Despite this admission, Cypress attempts to avoid the
application of the doctrine by arguing that the action filed
first by Barren which is now pending in South Carolina
federal court is an “anticipatory suit” and/or
should be precluded based on the alleged inequitable conduct
of Barren that form the basis for Cypress' claims in this
lawsuit. (Id.). Neither position is persuasive to
here, “a suit is ‘anticipatory' for the
purposes of being an exception to the first-to-file rule if
the plaintiff in the first-filed action filed suit on receipt
of specific, concrete indications that a suit by the
[opposing party] was imminent.” Ward, 80
F.Supp.3d at 561 (quoting Pittsburgh Logistics Sys., Inc.
v. C.R. England, Inc., 669 F.Supp.2d 613 (W.D. Pa
2009)). But, Barren's declaratory judgment suit was not
“anticipatory” in this context because it was
filed in response to the attached letter from Cypress'
counsel dated January 26, 2017 which made no mention of
filing this federal declaratory judgment action.
(See Docket No. 12-2). Rather, the substance of the
letter advises only that Cypress believed that there was a
sufficient basis under the South Carolina Rules of Civil
Procedure to set aside the default judgment in state court,
provides citations to caselaw in a purportedly analogous
situation, and asks that Barren's counsel voluntarily set
aside the default judgment. (Id.). If anything,
Barren's lawsuit was anticipatory as to the forthcoming
motion to set aside the default judgment, which was filed by
Mickens Transportation - presumably after being appointed
counsel by Cypress - a few days later in South Carolina state
court. See Ward, 80 F.Supp.3d at 561. In short, this
Court finds nothing inequitable about Barren filing the
declaratory judgment suit in the same court where the default
judgment was issued and where he expected a motion to set it
aside would be lodged. To the contrary, Cypress' filing
of this lawsuit against its own insured in a foreign forum
with little connection to the parties' disputes - days