Opinion
No. 02cv0690 PK/LFG
December 17, 2002.
ORDER
THIS MATTER comes on for consideration of Defendant Pinnacol Assurance's Motion for Abstention filed October 11, 2002 (Doc. 10). Upon consideration thereof, (1) In this diversity case, Plaintiff Sierra Chemicals, LLC ("Sierra") seeks monetary and injunctive relief against Defendant Pinnacol Assurance ("Pinnacol"), Sierra's workers' compensation carrier, based upon Pinnacol's alleged refusal to defend and indemnify Sierra in two workers' compensation cases. The workers' compensation cases were filed by Defendants Shane Lewis and Don L. Yazzie after they were injured in the course and scope of their employment with Sierra. In its complaint, Sierra seeks to enjoin the Defendants from pursuing workers' compensation proceedings until this action is concluded. Sierra also seeks compensatory, statutory, and punitive damages from Pinnacol based upon negligence, breach of the duty to defend, breach of insurance contract, violation of the New Mexico Insurance Practices Act, violation of the New Mexico Unfair Trade Practices Act, and bad faith.
(2) In this motion, Pinnacol seeks to have this court abstain until the conclusion of the workers' compensation proceedings. According to Pinnacol, those proceedings will resolve the coverage issue but will not resolve Sierra's other claims because the New Mexico Workers' Compensation Administration ("WCA") lacks jurisdiction over those claims. Doc. 13 at 1-2. Sierra disputes whether the WCA can resolve the coverage issue.
The specialized nature of the WCA was discussed in Eldridge v. Circle K Corp., 934 P.2d 1074 (N.M.Ct.App. 1997), in determining that the doctrine of primary jurisdiction did not apply to a common law claim for an intentional tort committed by the employer in the workplace. The court of appeals stated:
By virtue of specialization, experience, and expedited procedure, the WCA is the proper forum for resolving matters that are clearly reserved to workers' compensation such as insurance coverage, employment status, average weekly wage, impairment rating, and permanent and partial disability determinations. However, the expertise and procedural advantages of the WCA in handling a typical workers' compensation case afford the WCJ [Workers' Compensation Judge] no advantage in resolving a common law claim for intentional wrong-doing.934 P.2d at 1079. The court also observed the procedural differences between a state district court and the WCA:
[T]he district court is a constitutional court of general jurisdiction in which parties are afforded full discovery, actual confrontation of witnesses, and the right to a jury trial. In contrast, the WCJ [Workers' Compensation Judge] presides over an administrative court of limited jurisdiction with restricted opportunities for discovery, limited live testimony, and no jury trial.
Id. (footnote omitted). Although Eldridge arose in a slightly different context, it resulted in the New Mexico Court of Appeals reversing the WCJ's decision on whether an intentional tort had occurred in favor of the state district court proceedings. Id. at 1081. In this diversity case, this court's position is analagous to the state district court.
(3) Pinnacol urges a stay based upon Colo. River Water Conservation. Dist. v. United States, 424 U.S. 800 (1976), and Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942). Under Colorado River, federal courts have a "virtually unflagging obligation" to exercise jurisdiction, an obligation that may be avoided only upon a showing of "exceptional" circumstances. 424 U.S. at 817-818; see also Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25-26 (1982). Before evaluating whether Colorado River abstention is appropriate, "a federal court must first determine whether the state and federal proceedings are parallel," that is whether there is a substantial similarity between the parties and the issues being litigated in the different forums. Fox v. Maulding, 16 F.3d 1079, 1081 (10th Cir. 1994). Although Pinnacol informs the court that Sierra has filed a cross-claim in the workers' compensation proceedings containing claims similar to those it advances here, the state and federal proceedings in this case are not parallel because of the limited jurisdiction and limited procedural mechanisms in the workers' compensation proceedings, see supra pt. (2), when compared to the federal forum. Colorado River abstention is particularly inappropriate here because the WCA proceedings, though commencing before the federal action, deal with only one part of the claims advanced by Sierra in this litigation, and the effect of any WCA decision on this action is speculative at best. No exceptional circumstances favor Colorado River abstention.
(4) Pinnacol also relies upon Brillhart to suggest that the court should decline to hear this case because to do otherwise would encroach upon the exclusive state jurisdiction vested in the WCA, and the WCA will provide a better remedy.
See State Farm Fire Cas. v. Mhoon, 31 F.3d 979, 983 (10th Cir. 1994) (discussing factors in deciding whether a federal court should hear a declaratory judgment action). The discretion afforded the court under Brillhart applies to declaratory judgment actions, 316 U.S. at 493, 495, and this is not a declaratory judgment action. Even though "[t]he nature of the relief requested by the plaintiff, not the jurisdictional basis of the suit" determines whether a suit is a declaratory judgment action, Sierra seeks no declaratory relief but rather coercive relief including damages and an injunction. United States v. City of Las Cruces, 289 F.3d 1170, 1181 (10th Cir. 2002) ("If the plaintiff only requests a declaration of its rights, not coercive relief, the suit is a declaratory judgment action. . . .") (emphasis supplied). Because this is not a declaratory judgment action, Brillhart is inapplicable.
NOW, THEREFORE, IT IS ORDERED:
That Defendant Pinnacol Assurance's Motion for Abstention filed October 11, 2002 (Doc. 10), is denied.