American National Property Casualty Co. v. Crawford

Full title: AMERICAN NATIONAL PROPERTY CASUALTY COMPANY, Plaintiff, vs. JEFFREY BLAINE…

Court: United States District Court, S.D. Alabama, Southern Division

Date published: Jul 19, 2000

Civil Action No. 00-0123-P-M (S.D. Ala. Jul. 19, 2000)

Opinion

Civil Action No. 00-0123-P-M

July 19, 2000

ORDER MODIFYING AND ADOPTING THE REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE AND STAY ORDER

VIRGIL PITTMAN, Senior Judge

On May 30, 2000, the Magistrate Judge issued a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B), in this declaratory judgment action brought under 28 U.S.C. § 2201 (doc. 11). The Magistrate Judge, after considering the Motions to Dismiss or, in the Alternative, Motions to Stay filed by defendants Jeffrey Crawford and Tanya Crawford ("the Crawfords") (docs. 3-4), and Randy McKee (doc. 6), with plaintiff's Response thereto (doc. 9), recommends that defendants' Motions be denied in their entirety. The Crawfords filed a Statement of Objection (doc. 13).

After due and proper consideration of all portions of this file deemed relevant to the issues raised, and a de novo determination of those portions of the Report and Recommendation to which objection is made, the Report and Recommendation of the Magistrate Judge is due to be ADOPTED insofar as recommending that the Motions to Dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and (6) be denied, and MODIFIED as to defendants' request for a stay. The modification comes as this court disagrees that this action "should be allowed to proceed." (doc. 11).

The Crawfords do not object to the factual findings set out by the Magistrate Judge (doc. 13, p. 2, ¶ 1). Thus, the facts are accepted as set forth (doc. 11, p. 1 ¶ 2).

The Crawfords argue, however, that the Magistrate Judge failed to fully consider their alternative request for a stay (doc. 13, p. 4-5) of this proceeding pending resolution of the related litigation in the Circuit Court of Mobile County, Randy D. McKee v. Jeffrey B. Crawford. et al., CV-99-2684. (docs. 1, 3, Exhibit A), pursuant to Wilton v. Seven Falls Co., 515 U.S. 277 (1995), and Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942).

The "doctrine of abstention" was formally recognized by the United States Supreme Court in Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). Under the doctrine, a federal court may elect to abstain from exercising its jurisdiction in a case pending before it by dismissing that case when a parallel state court case is also pending. The Supreme Court later created a list of factors for the lower courts to balance when considering abstention. As succinctly summarized by the Eleventh Circuit,

[t]he [United States Supreme] Court set out four factors to be considered in determining whether dismissal . . . is appropriate: (1) whether one of the courts has assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the potential for piecemeal litigation; and (4) the order in which the forums obtained jurisdiction. [Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 819 . . . (1976)]. . . . The [Supreme Court's subsequent] Moses H. Cone decision also repeated the four Colorado River factors and added two more: (5) whether state or federal law will be applied; and (6) the adequacy of the state court to protect the parties' rights. [Moses H. Cone Memorial Hosp. v. Mercury Constr., 460 U.S. 1, 23 . . . (1983)].

American Bankers Insur. Co. of Florida v. First State Insur. Co., 891 F.2d 882, 884 (11^th Cir. 1990).

Four years ago, the Supreme Court confirmed that the discretionary standard first enunciated in Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942), governed a district court's determination of whether to dismiss or stay "a federal declaratory judgment action during the pendency of parallel state court proceedings," Wilton v. Seven Falls Co., 515 U.S. 277, 286-87 (1995), noting that "[d]istinct features of the Declaratory Judgment Act . . . justify a standard of vesting district courts with greater discretion in declaratory judgment actions than that permitted under the `exceptional circumstances' test of Colorado River and Moses H. Cone." Wilton, 515 U.S. at 286.

In Wilton, the Supreme Court explained:

"[t]here is nothing automatic or obligatory about the assumption of `jurisdiction' by a federal court" to hear a declaratory judgment action. . . . By the Declaratory Judgment Act, Congress sought to place a remedial arrow in the district court's quiver; it created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants. Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment before trial or after all arguments have drawn to a close. . . . In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to consideration of practicality and wise judicial administration.

Wilton, 515 U.S. at 288 (citation and footnote omitted); see Old Republic Union Insurance v. Tillis Trucking Co., Inc., 124 F.3d 1258, 1260 (11^th Cir. 1997), cert. denied, 523 U.S. 1047 (1998). The Supreme Court noted that "where the basis for declining to proceed is the pendency of a state proceeding, a stay will often be the preferable course, because it assures that the federal action can proceed without risk of a time bar if the state case, for any reason, fails to resolve the matter in controversy."Id. at 288, n. 2.

Although it is true that plaintiff's duty to defend and to provide coverage for the claims alleged against the Crawfords are not issues which the state court actions will directly resolve, the state court actions will determine whether or not the alleged claims against the Crawfords are valid and compensable. Should the state court actions determine that the alleged claims are valid and compensable, in whole or in part, then the parties and this court would squarely face the issues raised herein. However, in the event that the claims are effectively defended in the state court and are determined not to be compensable, then the issues raised herein would be impacted directly.

"Gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided." Brillhart, 316 U.S. at 495. It is this court's opinion that a stay of this action would avoid this court's "gratuitous interference," in such state court matters.Wilton, at 283. A stay would also allow this court to avoid, to the extent possible, piecemeal and duplicitous litigation. Further, it allows the state court to resolve the underlying factual issue pertinent to this litigation.

Accordingly, after due and proper consideration of all portions of this file deemed relevant to the issues raised, and a de novo determination of those portions of the Report and Recommendation to which objection is made, the Report and Recommendation of the Magistrate Judge is hereby ADOPTED as MODIFIED herein. It is ORDERED that defendants' Motions are GRANTED in the alternative and this court hereby exercises its discretion under Wilton v. Seven Falls Co., 515 U.S. 277 (1995), to STAY all proceedings in this action pending resolution of the related state court action currently pending in the Circuit Court of Mobile County.

The Clerk is directed to close this file for statistical purposes only. Defendants are ORDERED to inform this court in writing within two weeks following resolution of all pending state court claims, at which time the court will reopen this declaratory judgment action.