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Great American Alliance Insurance Co. v. Stutes

United States District Court, W.D. Missouri, Central Division

April 13, 2018

GREAT AMERICAN ALLIANCE INSURANCE COMPANY, Plaintiff,
v.
DEVIN STUTES, AMANDA STUTES, JEREMY RICHARDS AND KARLEE RICHARDS, Defendants.

          ORDER

          NANETTE K. LAUGHREY UNITED STATES DISTRICT JUDGE

         Defendants Jeremy Richards and Karlee Richards moved to dismiss or stay this declaratory judgment action by Plaintiff Great American Alliance Insurance Company in light of a garnishment proceeding that the Richards brought in state court against Great American. For the reasons set forth below, the Court GRANTS the motion to dismiss.

         I. BACKGROUND

         In June 2014, at the age of sixteen, Ms. Richards, along with her Searcy Baptist Church youth group, attended a summer camp sponsored by Student Life, a division of Lifeway Christian Resources of the Southern Baptist Convention, at Windermere Baptist Conference Center in Missouri. While there, Ms. Richards was injured when she fell from a zip-lining course. To date, Ms. Richards has undergone more than 25 surgeries and incurred medical expenses exceeding $1.8 million as the result of that fall.

         The Richards subsequently sued, inter alia, Devin Stutes, Searcy's youth leader at the time of the camp and head chaperone for the trip to Windermere, and Amanda Stutes, another chaperone for the trip to Windermere. The suit was filed in the Circuit Court of Morgan County. On November 18, 2016, the Stutes tendered a claim to Great American seeking defense and indemnity for the claims against them, asserting that they were additional insureds under a policy that Great American issued to Lifeway. On December 7, 2016, Great American denied the Stutes' tender.

         On February 28, 2017, Great American filed this action, seeking a declaration “that no liability coverage exists under the Great American policy issued to Lifeway for any of the claims asserted against Defendants Devin Stutes and Amanda Stutes in the Underlying Lawsuit, that Great American owes neither a duty to defend them nor a duty to indemnify them from the claims and allegations asserted in the Underlying Lawsuit, for its costs . . . .” Doc. 1.

         On May 10, 2017, the Stutes were dismissed from the Morgan County action. However, that same month, the Richards filed a new lawsuit in Jasper County against the Stutes and others.

         A judgment was entered in the Richards' Jasper County action against tortfeasors Windermere Baptist Conference Center, Inc. and Amanda Stutes and Devin Stutes on October 24, 2017. The Richards then filed a garnishment application on January 5, 2018 naming Great American as garnishee and seeking to garnish proceeds, payments, and obligations under four specified policies. Doc. 48-3. The application was filed pursuant to Chapter 525 of the Revised Statutes of Missouri. Doc. 64-1, at 2.

         On January 12, 2018, the Richards moved to stay or dismiss this action in light of the garnishment proceeding in state court, and Great American filed a motion for summary judgment. On February 2, 2018, Great American removed the garnishment proceeding to federal court, on the basis of diversity. See Richards v. Great American Alliance Insurance Company, No. 18-5011-SRB. In papers in opposition to the Richards' motion to dismiss this case, Great American argued that, because there no longer was a state court action, there was no basis for the Court to abstain. Doc. 64. In reply, the Richards asked the Court to stay consideration of their motion to dismiss until after the Richards moved to remand the garnishment proceeding to state court. Doc. 70.

         On March 2, 2018, the Richards voluntarily moved for dismissal without prejudice of the garnishment proceeding. Richards, No. No. 18-5011-SRB, Doc. 10. The garnishment proceeding was dismissed on March 27, 2018. Id., Doc. 17.

         On April 6, 2018, the Richards filed a new garnishment proceeding, this time, pursuant to Missouri Revised Statutes Section §379.200.

         II. DISCUSSION

         District courts possess “unique and substantial discretion” in determining whether to hear cases brought pursuant to the Declaratory Judgment Act, “even when the suit otherwise satisfies subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277, 282, 286 (1995); see also Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir. 2008) (“[I]n a declaratory judgment action, a federal court has broad discretion to abstain from exercising jurisdiction . . . .”). In such cases, “the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration.” Wilton, 515 U.S. at 288.

         When determining whether to abstain from exercising jurisdiction because of a parallel state court proceeding, the Court must consider “the scope and nature of the pending state court proceeding, ” and determine whether the issues “can be better settled by the state court.” Capitol Indemnity Corp. v. Haverfield, 218 F.3d 872, 874 (8th Cir. 2000). “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 ...


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