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Homesite Insurance Co. v. Neary

United States District Court, E.D. Pennsylvania

November 8, 2017

HOMESITE INSURANCE CO.
v.
MICHAEL P. NEARY, JR., et al.

          MEMORANDUM

          BARTLE, J.

         Plaintiff Homesite Insurance Co. (“Homesite”) commenced this action against defendants John Waris and Michael P. Neary, Jr. under the Declaratory Judgment Act, 28 U.S.C. § 2201. Homesite seeks a declaration that it has no duty to defend or indemnify Neary in a civil action brought by Waris in the Court of Common Pleas of Montgomery County, Waris v. Neary, No. 2014-04102 (Mont. Cnty. C.C.P. Feb. 25, 2014). Before the court is the motion of Waris to dismiss this action for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure.[1]

         I

         Under Rule 12(b)(1), a court must grant a motion to dismiss if it lacks subject matter jurisdiction to hear a claim. In his motion, Waris raises a facial, as opposed to factual, challenge to subject matter jurisdiction. In reviewing a facial challenge, which contests the sufficiency of the pleadings, “the court must only consider the allegations of the complaint and documents referenced therein and attached thereto.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012) (quoting Gould Elec. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000)). We apply the same standard as that applicable to a motion to dismiss for failure to state a claim under Rule 12(b)(6). Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014). Accordingly, we accept as true all material allegations set forth in the complaint and construe those facts in favor of the nonmoving party. In re Schering Plough Corp., 678 F.3d at 243.

         II

         The following facts taken from the complaint and its attached exhibits are treated as true for present purposes. This action arises from an incident that occurred on or about February 25, 2012, in which Waris was allegedly physically assaulted by Neary. At the time, Neary and Waris shared an apartment in Bryn Mawr, Pennsylvania. Following the incident, Neary was arrested and charged criminally. Subsequently he pleaded guilty to a felony charge of aggravated assault in violation of 18 Pa. Cons. Stat. Ann. § 2702(a)(1).

         On February 25, 2014, Waris instituted a civil action in the Court of Common Pleas of Montgomery County against Neary and his parents, who co-signed the lease for the Bryn Mawr apartment. The parties later stipulated to the dismissal of Neary's parents. In the state civil action, Waris alleges that the attack occurred without provocation and as a result of Neary's pre-existing mental health issues and alcohol consumption. He further asserts that Neary delayed seeking help or medical care for Waris after the incident, which thereby exacerbated Waris' injuries. The complaint alleges claims for negligence and recklessness, negligent infliction of emotional distress, and negligent failure to rescue. It seeks recovery of compensatory damages in excess of $50, 000, punitive damages, delay damages, and attorneys' fees and costs.

         At the time of the assault, Neary's parents were insured by a homeowners' insurance policy underwritten by Homesite. By letter dated December 20, 2016, Homesite agreed to provide each of the defendants named in the state civil action with a defense subject to a full reservation of rights.

         On May 18, 2017, Homesite commenced this action seeking a declaration that it has no duty to defend or indemnify Neary. Specifically, Homesite asserts that Neary does not qualify as an “Insured” under the policy because he was over the age of twenty-one and did not reside with his parents at the time of the attack. Homesite also maintains that the attack was an intentional criminal act which is not a covered “Occurrence” and is excluded under the terms of the policy. Homesite also asserts that the Nearys failed to give proper notice of the civil suit to Homesite and that other insurance may cover this loss. Waris now moves to dismiss this action for lack of subject matter jurisdiction under 28 U.S.C. § 1332 and the Declaratory Judgment Act.

         III

         The Declaratory Judgment Act, 28 U.S.C. § 2201, provides:

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 Act confers discretionary, rather than compulsory, jurisdiction upon federal courts and thus “is an exception to the general rule that ‘federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress.'” Reifer v. Westport Ins. Corp., 751 F.3d 129, 134 (3d Cir. 2014) (quoting Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996)). Moreover, the Act “does not itself create an independent basis for federal jurisdiction but instead provides a remedy for controversies otherwise properly within the court's subject matter jurisdiction.” Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 394 (3d Cir. 2016) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950)).

         In bringing this action, Homesite has invoked this court's diversity jurisdiction under 28 U.S.C. § 1332, which has two requirements for the establishment of jurisdiction. First, the parties must be completely diverse, meaning that “no plaintiff can be a citizen of the same state as any of the defendants.” Id. Secondly, the ...


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