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AMCO Insurance Co. v. N.O.

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

July 18, 2018

N.O., et al., Defendants.



         This declaratory judgment action concerns insurance coverage for a wrongful death lawsuit currently pending in the Circuit Court of Clay County, Missouri (“Underlying Lawsuit”).[1] The lawsuit stems from a workplace accident that caused the death of Colton Frisbee (“Decedent”). In that lawsuit, N.O., Decedent's daughter, Corey Frisbee, Decedent's father, and Leeann Hutchinson, Decedent's mother (collectively “Underlying Plaintiffs”), sued Terry Fletcher (“Fletcher”), Genie Industries, Inc., and Myron Cowley (“Cowley”) (collectively “Underlying Defendants”) for the wrongful death of Colton Frisbee. At the time of the accident, Decedent and Fletcher worked for Myron's Precise Paint Systems, Inc. (“Myron's Precise Paint Systems”), owned by Cowley.

         Now before the Court is AMCO's motion for summary judgment (Doc. 42) and N.O, Frisbee, and Hutchison's motion to dismiss, or, in the alternative, to stay proceedings (Doc. 49). For the following reasons, the motion to dismiss is DENIED and the motion for summary judgment is GRANTED.


         The Underlying Lawsuit arose out of an accident on March 12, 2015, where Fletcher and Decedent, both employees of Myron's Precise Paint Systems, were operating an indoor scissor lift in the parking lot of a building they were painting as part of a work assignment. While Decedent was operating the scissor lift, it became unsteady. Decedent jumped from the lift's elevated platform and landed on a truck, and the lift fell on Decedent, killing him.

         Plaintiff AMCO Insurance Company (“AMCO”) issued several policies to Myron's Precise Paint Systems, a Commercial General Liability Policy (“CGL Policy”), a Business Auto Policy (“Auto Policy”), a Standard Workers Compensation and Employers Liability Policy (“ELI Policy”), and a Commercial Umbrella Liability Insurance Policy (“Excess Policy”).

         On September 24, 2015, Underlying Plaintiffs filed a wrongful death lawsuit in Clay County, Missouri against Underlying Defendants. On November 3, 2017, the Underlying Plaintiffs amended their petition asserting a single claim of negligence against Cowley, in his capacity as president, sole owner, and director of Myron's Precise Paint Systems. The petition alleges Cowley generally controlled and managed the business and property, including directing the Decedent in all aspects of his work, and was responsible for servicing and maintaining the subject scissor lift. ACMO denied it has a duty to defend Cowley under the insurance policies it issued to Myron's Precise Paint Systems, but agreed to defend Cowley in the Underlying Suit under a reservation of rights.

         On August 25, 2017, AMCO filed this lawsuit seeking a declaration that none of the four insurance policies it issued required it to defend or indemnify Cowley in the Underlying Lawsuit. On December 14, 2017, the Court granted summary judgment in AMCO's favor that no coverage existed under the Auto Policy. Because the state court in the Underlying Lawsuit had granted the Underlying Plaintiff's motion to amend their petition, the Court denied without prejudice AMCO's motion for summary judgment as to the other policies. Then on January 12, 2018, AMCO filed its second motion summary judgment motion arguing no coverage exists under the other insurance policies.

         On February 26, 2018, Defendants filed a motion to dismiss this case arguing allowing both this lawsuit and the Underlying Lawsuit could expose the parties to inconsistent judgments. Since this motion was filed, the Underlying Plaintiffs and Cowley entered into a settlement agreement pursuant to Mo. Rev. Stat. § 537.065 in the Underlying Lawsuit. Under the settlement agreement, the Underlying Lawsuit will proceed to a bench trial on all issues of liability and damages. Further, the Underlying Plaintiffs agree to limit their execution rights to the coverage available under the AMCO policies. On March 28, 2018, the state court in the Underlying Lawsuit granted AMCO's motion to intervene and AMCO subsequently filed an answer to the second amended petition.


         Before considering the merits of AMCO's motion for summary judgment, the Court considers whether it should exercise its discretion to stay or dismiss this action.

         I. The motion to dismiss, or, in the alternative, stay proceedings, is denied.

         In arguing the Court should dismiss this case, Defendants argue there are parallel state proceedings encompassing the same issues as in this case.

         Ordinarily, courts have a “virtually unflagging obligation” to entertain cases within their jurisdiction. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). A case seeking only a declaratory judgment provides federal courts with some discretion to dismiss. E.g., Wilton v. Seven Falls Co., 515 U.S. 277 (1955); Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942). However, Brillhart and Wilton apply in full force only if there is a parallel state court proceeding. Royal Indemnity Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir. 2008); Scottsdale Ins. Co. v. Detco Indus., Inc., 426 F.3d 994, 998-99 ...

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