United States District Court, M.D. Pennsylvania
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.
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.)
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.)
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.
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
Arguments of the Parties
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.)
Applicable Legal Standard
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.” 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)).
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 ...