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Westfield Insurance Co. v. Lang

United States District Court, W.D. Missouri.

January 10, 2017

WESTFIELD INSURANCE COMPANY, Plaintiff,
v.
ANGELA LANG, et al., Defendants.

          ORDER (1) GRANTING DEFENDANTS' MOTIONS TO DISMISS, (2) DENYING AS MOOT PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, AND (3) DENYING AS MOOT DEFENDANTS' MOTION TO STAY SUMMARY JUDGMENT PROCEEDINGS

          ROSEANN A. KETCHMARK, JUDGE

         Before the Court is Defendants John Mino, Carol Mino, and Mino Farms (“Mino Defendants”) Motion to Dismiss (doc. 24), requesting the Court to dismiss, or alternatively, to stay this case in light of an equitable garnishment proceeding involving the same parties that is pending in state court. Based on the same arguments, the Wise Defendants[1] and the Lang Defendants have filed separate motions to dismiss (docs. 26 & 27), which incorporate the Mino Defendants' suggestions in support. Also pending, Plaintiff Westfield Insurance Company (“Westfield”) has filed a motion for summary judgment (doc. 28);[2] and the Lang Defendants have filed a motion to stay summary judgment briefing and proceedings (docs. 31), which is joined by the Mino Defendants (doc. 34) and the Wise Defendants (doc. 35). Westfield has filed suggestions in opposition to the motions to stay summary judgment briefing and proceedings (doc. 37). For the reasons that follow, the Court GRANTS Defendants' motions to dismiss (docs. 24, 26 & 27), and DENIES as moot the motion for summary judgment (doc. 28) and motions to stay summary judgment briefing and proceedings (doc. 31, 34 & 35).

         Background

         This case arises out of a fatal car crash involving the Lang Defendants, their son, and Scott Popeko (a party previously dismissed, Docket Entry (“D.E.”) 15). (Doc. 1 at 7, ¶ 25.) Popeko was allegedly driving a truck owned by Defendant Mino Farms, Inc. to make a delivery, a trip undertaken by Popeko as part of the joint farming operation involving the Mino Defendants and the Wise Defendants (including Defendant Wise Family Trust). (Doc. 1 at 7-8, ¶¶ 26-34.) In 2015, the Lang Defendants brought a diversity action in this district for wrongful death and personal claims against the Mino and Wise Defendants, among others, seeking damages stemming from the collision, Case No. 5:15-cv-06069-DGK (“the underlying claim”). (Doc. 1-1.) In the underlying claim, the Lang Defendants allege that the accident resulted in the death of their nine-month old son and personal injuries to Angela Lang.

         While the underlying claim (Case No. 5:15-cv-06069-DGK) was still pending, on August 3, 2016, Westfield filed the instant action under the Declaratory Judgment Act, 28 U.S.C. § 2201, (doc. 1.). In the instant action, Westfield seeks the interpretation of an insurance policy, (“the Policy”), issued to Defendants Wise Enterprises, Inc. (a party previously dismissed, D.E. 16) and Wise Family Trust. Westfield requests this Court to declare that the Policy provides no coverage for the underlying claim and that Westfield has no duty to indemnify Defendants Wise Enterprises, Inc., and Wise Family Trust for any liability in the underlying claim.

         In late August, the underlying claim was finally resolved. In the following month, a Missouri state court, (Jackson County Circuit Court of Missouri, Case No. 1616-CV22373), entered a judgment confirming an arbitration award on the underlying claim in favor of the Lang Defendants and against the Mino and the Wise Defendants, to be satisfied jointly and severally.

         Finally, on October 20, 2016, the Lang Defendants, as judgment creditors, initiated a separate equitable garnishment action pursuant to Mo. Rev. Stat. § 379.200 in Missouri state court, (Jackson County Circuit Court of Missouri, Case No. 1616-CV25188), in which the Lang Defendants seek to collect insurance proceeds to satisfy their judgment from the Policy as well as additional policies issued by another insurer, State Farm Mutual Automobile Insurance Company (“State Farm”). (Doc. 25-1.) In the equitable garnishment proceeding, the Lang Defendants name as defendants: Westfield, the Mino Defendants, the Wise Defendants, and State Farm. The petition has two counts: Count I against Westfield for Equitable Garnishment, Breach of Contract, and Bad Faith Refusal to Defend and Indemnify, and Count II against State Farm for Equitable Garnishment, Breach of Contract, and Bad Faith Refusal to Defend and Indemnify.

         Here, Defendants move this Court to abstain from exercising judgment over the instant action which Westfield has filed seeking declaratory judgment. Defendants argue this action should be dismissed, or in the alternative, it should be stayed because the parties will have the opportunity to litigate the same issues in the equitable garnishment proceeding pending in Missouri state court. Westfield opposes the motions, arguing (1) the motions are deficient as untimely because they were not filed prior to Defendants' Answers, and (2) the Court should retain jurisdiction over the matter because the issues are ripe for adjudication.

         Discussion

         I. Timeliness of the Motions to Dismiss

         Defendants' motions to dismiss raise principles of abstention. Plaintiff contends that Defendants' motions to dismiss are untimely motions pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Federal Rule of Civil Procedure 12(b) lists certain defenses that may be asserted by motion. Rule 12(b) goes on to state that “[a] motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed.” Rule 12(h)(2) then provides that a motion to dismiss for the failure to state a claim upon which relief can be granted can be raised even after an answer has been filed. Thus, even if Plaintiff correctly characterizes the motions as being filed pursuant to Rule 12(b)(6), Plaintiffs argument is without merit because Rule 12(h)(2) contemplates that a 12(b)(6) defense may be raised as late as trial.[3] Therefore, the Court is not compelled to deny the motions to dismiss on the ground that they are untimely.

         II. Abstention

         Having declined to deny the motions to dismiss as untimely, the Court decides whether to abstain in light of the equitable garnishment proceeding in Missouri. Under the Declaratory Judgment Act, a court “may declare the rights and other legal relations of any interested party seeking such declaration[.]” 28 U.S.C. § 2201 (emphasis added). As shown by the statute's express language, it is well established that “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) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494-95 (1942)). Accordingly, the Supreme Court held in Wilton that the standard under which district courts decide whether to dismiss or stay a federal declaratory judgment action in favor of a parallel state court proceeding is the discretionary standard set forth in Brillhart.

         Under Brillhart, “[t]he key consideration for the district court is ‘to ascertain whether the issues in controversy between the parties to the federal action . . . can be better settled by the state court' in light of the ‘scope and nature of the pending state court proceeding.'” Evanston Ins. Co. v. Johns, 530 F.3d 710, 713 (8th Cir. 2008) (quoting Capitol Indem. Corp. v. Haverfield, 218 F.3d 872, 874 (8th Cir. 2000) (citing Brillhart, 316 U.S. at 495 (1942))). “If so, the district court must dismiss the federal action because ‘it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in ...


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