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GEICO Casualty Co. v. Isaacson

United States Court of Appeals, Eighth Circuit

August 2, 2019

GEICO Casualty Company Plaintiff - Appellee
Christina Isaacson; Blake Isaacson Defendants Kelly Rice, Individually and in her capacity as Class 1 beneficiary and representative of all statutory beneficiaries, pursuant to R.S. Mo. Section 537.080.1, with respect to claims arising from the wrongful death of Macie Rice Defendant-Appellant Brian Isaacson Defendant K. M., a minor, by and through her parent and guardian ad litem, Aimee Mershon-Greer Defendant-Appellant

          Submitted: April 17, 2019

          Appeal from United States District Court for the Western District of Missouri - Kansas City.

          Before COLLOTON, GRUENDER, and ERICKSON, Circuit Judges.

          Gruender, Circuit Judge.

         Kelly Rice and K.M. appeal the district court's[1] order granting summary judgment to GEICO. We affirm.

         In 2016, Blake Isaacson lost control of a Ford Focus. Passenger Macie Rice died in the accident, and passenger K.M. was injured. GEICO insured the vehicle through an automobile liability insurance policy. The policy's declaration page identifies Blake's parents, Brian and Christina Isaacson, as the "Named Insured" and Blake as an "Additional Driver." The policy provides a bodily injury liability limit of $100,000 for "each person" and $300,000 for "each occurrence," and a "Limits of Liability" clause dictates that these amounts are the total limits of bodily injury liability coverage. The policy lists two other covered vehicles besides the Ford Focus involved in the accident and explains that "the limit of coverage applies separately to each [vehicle]." In addition, the policy contains an "Other Insurance" provision stating that "[a]ny insurance we provide for losses arising out of the ownership, maintenance, or use of a vehicle you do not own shall be excess over any other valid and collectible insurance."

         While a wrongful death action was pending in state court, GEICO, Blake Isaacson, and Macie Rice's mother, Kelly Rice ("Rice"), reached a partial settlement under which GEICO agreed to pay $100,000 to Rice, and Rice agreed to limit her collection efforts on any subsequent judgment to sources other than Blake Isaacson. The agreement acknowledged that the parties dispute the total liability insurance available under the policy "and whether the other liability coverage stacks for the other vehicles listed on the Declaration Pages."[2] A Missouri circuit court approved the partial settlement, and Rice's wrongful death action proceeded.

         The next day, GEICO filed a declaratory judgment action in the United States District Court for the Western District of Missouri against Rice and the Isaacsons to resolve the outstanding stacking question. After reaching a similar settlement with K.M. limiting her collection efforts to sources other than Blake Isaacson, GEICO amended its complaint and added K.M. as an additional defendant. GEICO moved for summary judgment on December 27, 2017. The parties completed briefing on the summary judgment motion on January 30, 2018, though Rice and K.M. moved for an extension of time to conduct discovery on whether GEICO had agreed to pay stacked liability limits based on similar policy language in the past.

         Meanwhile, the Missouri state court entered judgment in favor of Kelly Rice on her wrongful death claim on January 24, 2018. After that judgment became final, Rice and K.M. filed an equitable garnishment and declaratory judgment action in Missouri state court on March 1, 2018. The state court suit raised the same stacking issue as the federal action, as well as other issues. That same day, Rice and K.M. moved to dismiss GEICO's federal action, arguing that the district court should abstain to allow the state court to decide the state law stacking issue. See Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942) (explaining that district courts have discretion over whether to exercise jurisdiction in declaratory judgment suits and setting forth reasons to refrain from exercising jurisdiction in favor of parallel state court proceedings); Wilton v. Seven Falls Co., 515 U.S. 277 (1995) (reaffirming Brillhart).

         On May 24, 2018, the district court granted GEICO's motion for summary judgment on its declaratory judgment claim, and it denied Rice and K.M.'s motion for an extension of time. The district court never addressed Rice and K.M.'s motion to dismiss the federal action in favor of the state court proceeding.

         On appeal, Rice and K.M. first argue that the district court's failure to rule on their motion to dismiss under the Brillhart/Wilton abstention doctrine requires reversal. "Generally, a federal district court must exercise its jurisdiction over a claim unless there are 'exceptional circumstances' for not doing so." Scottsdale Ins. Co. v. Detco Indus., 426 F.3d 994, 996 (8th Cir. 2005). But "a federal district court has much broader discretion in determining whether to exercise jurisdiction in a declaratory judgment action during the pendency of parallel state court proceedings." Id. (citing Wilton, 515 U.S. at 282-90). Two proceedings are parallel if-as we assume to be the case here-"substantially the same parties litigate substantially the same issues in different forums." Id. at 997; see also Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d 958, 968 (8th Cir. 2013). When there is a federal declaratory judgment action and a parallel state court proceeding, "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. In such situations, federal courts should avoid "[g]ratuitous interference with the orderly and comprehensive disposition of a state court litigation." Brillhart, 316 U.S. at 495. Rendering a declaratory judgment where there are parallel state court proceedings and no issues of federal law would "[o]rdinarily . . . be uneconomical as well as vexatious." Id.

         Rice and K.M argue that the district court's failure to address their motion to dismiss prevents us from reviewing whether the district court properly acted within its broad discretion in deciding to issue a declaratory judgment. When a district court fails to address a matter properly presented to it, we ordinarily remand to give the court an opportunity to rule in the first instance. See, e.g., O'Neil v. City of Iowa City, Iowa, 496 F.3d 915, 918 (8th Cir. 2007). But we have refrained from remanding in cases where it is unnecessary on the record before us. See, e.g., Cunningham v. Apfel, 222 F.3d 496, 503 (8th Cir. 2000).

         We conclude that a remand is unnecessary here. As we will explain, the insurance policy unambiguously does not allow stacking under Missouri law-the key issue common to both proceedings. Moreover, GEICO's motion for summary judgment was fully briefed by the time that Rice and K.M. brought their declaratory judgment action in Missouri state court. While they suggest that GEICO engaged in a race to the courthouse by bringing the declaratory judgment action, the original settlement expressly acknowledged the dispute over stacking. Thus, we see nothing improper in GEICO's decision to file a declaratory judgment action promptly to resolve an outstanding issue, even if Rice and K.M. understandably chose to wait until they obtained a wrongful death judgment before raising the issue in state court. Because the motion for summary judgment was fully briefed by the time the state court action was filed and did not present complicated issues of state law, the considerations of practicality, wise judicial administration, and economy identified by the Supreme Court in Brillhart and Wilton support the district court's decision to grant a declaratory judgment.

         Besides, we have explained that "it is relatively uncommon for reviewing courts to find discretion abused when a district court elects to exercise jurisdiction" and that "when such abuses are found, there typically are distinguishing factors." Lexington, 721 F.3d at 972. In Capitol Indemnity Corp. v. Haverfield, for example, we concluded that the district court abused its discretion in issuing a declaratory judgment because the state courts disagreed on the state law question at issue in the declaratory judgment action and the district court had to resolve the split. 218 F.3d 872, 875 (8th Cir. 2000). Because GEICO's ...

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