United States District Court, W.D. Missouri, Central Division
NANETTE K. LAUGHREY, United States District Judge
before the Court are Defendants Neil and Heta Desai's
Motion to Dismiss or Stay, Doc. 33, and Plaintiff Seneca
Specialty Insurance Company's Cross-Motion for Summary
Judgment, Doc. 38. For the following reasons, the Motion to
Dismiss is granted, and the Cross-Motion for Summary Judgment
is denied as moot.
dispute arises out of an incident that occurred at Defendant
Garcia Empire, LLC's nightclub, Roxy's, on October 2,
2014. That night, Defendant Neil Desai was physically
restrained and forced from the premises by Defendant Dalton
Alvey. While removing Desai, Alvey grabbed
Desai's right arm and twisted it behind his back. Once
outside, Alvey released Desai, but in doing so broke
Desai's arm. Desai and his wife subsequently filed suit
against Alvey and Garcia Empire in the Circuit Court of Boone
County, Missouri, in May 2015. The Desais alleged that Alvey
and Garcia Empire acted negligently, and also raised a claim
for loss of consortium on behalf of Heta Desai.
the underlying case was still pending, on July 11, 2017,
Seneca filed the present declaratory judgment action, seeking
a declaration that it had no duty to defend or indemnify
Alvey or Garcia Empire. On August 14, 2017, Seneca filed an
amended complaint to add the Desais as defendants, but it was
not until November 7, 2017 that Seneca effectuated service.
Meanwhile, on August 17, 2017, the underlying injury case
went to trial, and on October 2, 2017, the state court
entered judgment in favor of the Desais. In an effort to
collect on the judgment, the Desais subsequently filed a
state equitable garnishment action pursuant to R.S. Mo.
§ 379.200 against both Garcia Empire and Seneca.
removed the equitable garnishment action to federal court on
December 21, 2017, and the case was assigned to Judge Howard
F. Sachs. On January 12, 2018, it was transferred to the
undersigned. Before ruling on a motion to consolidate the two
cases, this Court remanded the equitable garnishment
proceeding because Seneca failed to obtain Garcia
Empire's consent to removal. Having decided the motion to
remand, the Court now addresses the Desais' motion to
dismiss, Doc. 33, and Seneca's cross-motion for summary
judgment, Doc. 38.
Desais move to dismiss or stay, arguing that the coverage
issue Seneca raises involves no matter of federal law, and
can be more appropriately adjudicated in the underlying state
court action, which involves the same parties, policy, and
coverage issue. Alternatively, the Desais contend that
Seneca's declaratory judgment action is an inappropriate
request for the Court to declare non-liability of a potential
tortfeasor. Seneca opposes the motion, arguing that there is
no need for the Court to abstain because the issues are ripe
for adjudication. Accordingly, Seneca filed a cross-motion
for summary judgment.
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)). “In the
declaratory judgment context, the normal principle that
federal courts should adjudicate claims within their
jurisdiction yields to considerations of practicality and
wise judicial administration.” Id. at 288.
Thus, the Supreme Court held in Wilton that the
standard under which district courts decide whether to
dismiss or stay a federal declaratory judgment action during
the pendency of a parallel state court proceeding is the
discretionary one set out in Brillhart.
Brillhart, the district court must consider the
scope and nature of the pending state court proceeding to
ascertain whether the issues in controversy between the
parties to the federal action, not foreclosed under
applicable substantive law, can be better settled by the
state court.” Capitol Indem. Corp. v.
Haverfield, 218 F.3d 872, 874 (8th Cir. 2000) (citations
omitted). “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 a
state court presenting the same issues, not governed by
Federal law, between the same parties.'”
Id. (quoting Brillhart, 316 U.S. at 495).
The Eighth Circuit summarized, in Scottsdale Ins. Co. v.
Detco Indus., Inc., 426 F.3d 994, 997 (8th Cir. 2005),
that suits are parallel when “substantially the same
parties litigate substantially the same issues in different
the Court finds that the present declaratory judgment matter
and the state court case are parallel, which Seneca does not
challenge. The parties in the instant action are the same as
the parties in the state court action, and the coverage
issues in both cases are also substantially the same. The
state court claims require a determination of whether the
underlying tort is covered under the insurance policy, which
is the same issue Seneca presents to this Court. Moreover, it
is an issue governed by Missouri state law.
than contest whether the proceedings are parallel, Seneca
argues that there is no need for the Court to abstain because
the issues are ripe for adjudication, Seneca was first to
file and therefore its choice of forum should not be
disturbed, and because there is no risk of inconsistent
rulings. The Court disagrees.
Eighth Circuit has already rejected the same argument Seneca
now advances, in an analogous case, Capitol Indemnity
Corporation v. Haverfield, 218 F.3d 872 (8th Cir. 2000).
There, as here, an insurer sought a declaration that an
insured's claim was excluded under a policy. Id.
at 873-74. While the declaratory judgment action was still
pending, the state court entered judgment in the underlying
action, and a subsequent state court garnishment proceeding
was initiated. Id. In Haverfield, the
federal court maintained jurisdiction because the declaratory
judgment action was filed six months before the state court
action. Id. at 875. The Eighth Circuit reversed,
however, holding that “the state court was in the
better position to adjudicate the matter, ” and
therefore the district court should have abstained.
Id.; see also Western Heritage Ins. Co. v.
Sunset Security, Inc., 63 Fed.Appx. 965, 967 (8th Cir.
2003) (noting that abstention is required even when the
declaratory judgment was filed months before the state court
Seneca's authority with regard to the “first
filed” rule is inapplicable. Fru-Con Construction
Corp. v. Controlled Air, Inc. did not involve any
declaratory judgment action, but rather involved two parallel
contract claims. 574 F.3d 527 (8th Cir. 2009). As such, the
case implicated Colorado River abstention, not
Brillhart/Wilton. Id. 538. The
treatise that Seneca offers for support is equally
irrelevant. The section that Seneca cites is located in a
“change of venue” chapter, and discusses
transfers of venue between federal district courts.
See 15B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedures ...