United States District Court, E.D. Pennsylvania
case arises out of the denial of underinsured motorist
(“UIM”) benefits. Plaintiff, Jeffrey Sherer,
seeks declarations that the denial and disclaimer of coverage
by defendant, Federated Mutual Insurance Company, violated
the Pennsylvania Motor Vehicle Financial Responsibility Law
(“MVFRL”) and the public policy of the
Commonwealth of Pennsylvania. Presently before the Court is
plaintiff's Motion to Remand (Document No. 2, filed June
14, 2019). In his Motion, plaintiff requests that the Court
decline to exercise its discretionary jurisdiction under the
Declaratory Judgment Act, 28 U.S.C. § 2201, et
seq. (“DJA”), because the case raises
unsettled issues of state law. For the reasons set forth
below, the Court grants plaintiff's Motion to Remand.
April 10, 2017, Sherer was operating a vehicle owned by his
employer, Peter J. Radocha & Sons, Inc.
(“Radocha”), when it was struck by another
vehicle. Compl. ¶¶ 6-7. At the time of Sherer's
accident, defendant provided insurance coverage for the
Radocha vehicle. Compl. ¶¶ 16, 18. The policy
issued by defendant provided the following UIM coverage:
(a) $500, 000.00 for Directors, Officers, Partners or Owners
of the named insured and their family members qualifying as
insured; and (b) no coverage for other persons qualifying as
Compl. ¶ 19.
the accident, plaintiff made a claim upon the other driver
and her insurance provider, State Farm Mutual Automobile
Insurance Company, seeking compensatory damages. Compl.
¶ 20. State Farm tendered the $25, 000 liability limit
under the driver's policy, which plaintiff contends was
“insufficient to compensate . . . for the injuries and
damages sustained in the . . . accident.” Compl.
then sought to recover UIM benefits from defendant under the
policy issued to Radocha. Compl. ¶ 23. Defendant denied
the claim on the ground that plaintiff's employer had
properly waived UIM coverage for him pursuant to the
requirements of the MVFRL. Compl. ¶ 24, 29.
filed a Complaint in the Court of Common Pleas of
Philadelphia County on May 21, 2019, seeking declarations
that the Rejection of Underinsured Motorist Protection used
by defendant failed to comply with the MVFRL (Count I); the
denial of UIM benefits to employees who otherwise qualify as
insureds violates the MVFRL (Count II); and that, because the
MVFRL “contemplates a knowing and voluntary waiver of
underinsured motorist coverage, ” the failure of
defendant or plaintiff's employer to notify plaintiff of
the waiver of coverage violated “the MVFRL and the
public policy of the Commonwealth of Pennsylvania”
(Count III). Pl.'s Mot. Remand Ex. A 5-12. Pursuant to 28
U.S.C. § 1332 and § 1441, defendant filed a Notice
of Removal on June 10, 2016.
14, 2019, plaintiff filed a Motion to Remand on the ground
that the Court should decline to exercise its discretionary
jurisdiction under the DJA. Plaintiff contends that remand is
appropriate because the action seeks only declaratory relief
and Counts II and III raise issues of state law that have not
yet been resolved by Pennsylvania appellate courts. Pl.'s
Mot. Remand 13. Defendant filed its response on June 28,
2019. The Motion is thus ripe for review.
the DJA, federal courts “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.” 28 U.S.C. § 2201(a). “The Supreme
Court has long held that this confers discretionary, rather
than compulsory, jurisdiction upon federal courts.”
Reifer v. Westport Ins. Corp., 751 F.3d 129, 134 (3d
Cir. 2014) (citing Brillhart v. Excess Ins. Co. of
Am., 316 U.S. 491, 494 (1942)). As a result, district
courts “possess discretion in determining whether and
when to entertain an action under the Declaratory Judgment
Act, even when the suit otherwise satisfies subject matter
jurisdictional prerequisites.” Wilton v. Seven
Falls Co., 515 U.S. 277, 282 (1995).
federal courts exercise “substantial” discretion
in declaratory actions, this discretion is nonetheless
“bounded and reviewable.” Kelly v. Maxum
Specialty Ins. Grp., 868 F.3d 274, 282 (3d Cir. 2017)
(citing Reifer, 751 F.3d at 140). The Third Circuit
has set forth a ...