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Sullo v. Nationwide Property and Casualty Insurance Co.

United States District Court, M.D. Pennsylvania

July 24, 2019


         Judge Kane)


         Before the Court is Plaintiff Michael Sullo (“Plaintiff”)'s motion to remand (Doc. No. 7) following Defendant Nationwide Property and Casualty Insurance Company (“Defendant”)'s notice of removal (Doc. No. 1). For the reasons provided herein, the Court will deny Plaintiff's motion.

         I. BACKGROUND

         This declaratory judgment action involves an insurance coverage dispute between Plaintiff, who was injured in an automobile accident on August 21, 2017, and Defendant insurer, who allegedly maintained a business auto policy on the vehicle Plaintiff was operating at the time of the accident. (Doc. No. 1 at 19-23). Plaintiff filed his complaint for declaratory judgment in the Court of Common Pleas for Dauphin County, Pennsylvania on February 19, 2019. (Id. at 1.) Defendant removed the action on March 29, 2019, invoking this Court's diversity subject matter jurisdiction. (Id. at 4-5.)

         The instant case presents the question of whether Plaintiff is entitled to underinsured motorist benefits from Defendant. (Id. at 23-24.) At the time of the accident, Plaintiff was operating a vehicle owned by his employer, Appliance Doctor, Inc., while in the course of his employment. (Id. at 19.) Plaintiff alleges that the accident was caused by the negligence of James Winczuk, Jr. (“Winczuk”), whose vehicle was insured by State Farm. (Id.) According to Plaintiff, he sought and received a recovery of damages from State Farm in the amount of $25, 000.00, the limit of liability coverage under Winczuk's policy. (Id. at 21.) Plaintiff alleges, however, that the amount he received from State Farm is insufficient to compensate him for the injuries he sustained in the accident. (Id.) Plaintiff states that, as a result, he sought to recover underinsured motorist benefits from Defendant under the policy of insurance issued to his employer. (Id.) Plaintiff further states that Defendant denied the claim on the basis that underinsured motorist coverage had been rejected by Plaintiff's employer and thus was not a coverage provided on the applicable policy of insurance. (Id. at 22.) Plaintiff alleges that he was never advised by either Defendant or his employer that the vehicle he was operating at the time of the accident was insured by a policy that did not provide underinsured motorist coverage. (Id.) Plaintiff states that because he did not knowingly and voluntarily waive underinsured motorist coverage, under Pennsylvania law any waiver of this coverage is “null and void.” (Id. at 22-23.)

         Plaintiff filed his motion to remand on April 9, 2019 (Doc. No. 7) in which he requests that the Court decline to exercise its discretionary jurisdiction over this case (id. at 2). Defendant filed a brief in opposition on April 23, 2019. (Doc. No. 10.) Plaintiff did not file a reply brief and the period in which to do so has elapsed. Accordingly, Plaintiff's motion is ripe for disposition.


         In general, the party asserting jurisdiction “bear[s] the burden of proving that jurisdiction exists.” Castro v. United States Dep't of Homeland Sec., No. 16-1339, at *4, 2016 WL 4501943 (3d Cir. Aug. 29, 2016) (internal quotation marks omitted) (quoting Nuveen Mun. Trust ex rel. Nuveen High Yield Mun. Bond Fund v. WithumSmith Brown, P.C., 692 F.3d 283, 293 (3d Cir. 2012)). However, a motion requesting that a district court decline to exercise jurisdiction over a claim filed pursuant to the Declaratory Judgment Act does not implicate a defect in federal subject matter jurisdiction. See Reifer v. Westport Ins. Co., 751 F.3d 129, 133 (3d Cir. 2014). Rather, the decision to exercise jurisdiction over Declaratory Judgment Act claims is committed to the “substantial but nonetheless bounded and reviewable discretion” of the district court, as informed by several factors enumerated by the Third Circuit. See Kelly v. Maxum Specialty Ins. Grp., 868 F.3d 274, 282-83 (3d Cir. 2017) (internal quotation marks omitted) (citing Reifer, 751 F.3d at 140). A court may, in certain circumstances, abstain from entertaining an action seeking only declaratory relief. See id. at 281. In deciding whether to entertain a declaratory judgment action, a district court considers factors that bear “on the usefulness of the declaratory judgment remedy, and the fitness of the case for [federal] resolution.” See id. at 282 (alteration in original).


         A. Arguments of the Parties

          In moving for remand, Plaintiff argues that the Court should decline to exercise its discretionary jurisdiction because the instant litigation concerns only issues of state law. (Doc. No. 9 at 4-5.) Plaintiff further argues that the Court should remand because the Reifer factors are equivocal as to whether the Court should exercise its jurisdiction. (Id. at 6.) Defendant argues that the Court should exercise its jurisdiction over the instant litigation because there is no pending parallel state proceeding and there is no unsettled area of law at issue. (Doc. No. 10 at 10.)

         B. Applicable Legal Standard

         The Declaratory Judgment Act provides in part that “[i]n 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[.]” See 28 U.S.C. § 2201(a). The Act “does not itself create an independent basis for federal jurisdiction but instead provides a remedy for controversies otherwise properly within the [C]ourt's subject matter jurisdiction.”[1] Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 294 (3d Cir. 2016) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950)).

         Actions seeking only declaratory relief are discretionary and thus are not “subject to the ‘normal principle that federal courts should adjudicate claims within their jurisdiction.'” See Reifer, 751 F.3d at 139 (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995)). Courts may thus “abstain from entertaining” actions asserted only for declaratory relief. See Allied World Specialty Ins. Co. v. Indep. Blue Cross, No. 17-1463, 2017 WL 4922177, at *2 (E.D. Pa. Oct. 31, 2017) (citing Kelly, 868 F.3d at 281). While the discretion courts exercise in actions seeking only declaratory relief is “substantial, ” it is nonetheless “bounded and reviewable.” SeeKelly, 868 F.3d at 282 (citing Reifer, 751 F.3d at ...

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