Opinion
No. 5:14-cv-5800
09-25-2015
Robin A. Pratt Osenbach, Plaintiff, v. Allstate Fire and Casualty Ins. Co., Defendant.
Adam K. Levin, Liever Hyman & Potter, Reading, PA, for Plaintiff. John R. Brown, Philadelphia, PA, for Defendant.
Adam K. Levin, Liever Hyman & Potter, Reading, PA, for Plaintiff.
John R. Brown, Philadelphia, PA, for Defendant.
MEMORANDUM
Plaintiff's Motion to Remand, ECF No. 3—Granted
Joseph F. Leeson, Jr., United States District Judge
I. INTRODUCTION
This action arises out of a motor vehicle accident resulting in fatal injuries to David H. Osenbach, Sr. Plaintiff filed a declaratory judgment action in the Berks County Court of Common Pleas, seeking a declaration that the Rejection of Underinsured Motorist Protection is void and that underinsured motorist coverage is available to Plaintiff under Defendant's insurance policy. Defendant removed the action to this Court based on diversity jurisdiction. Presently before the Court is Plaintiff's Motion to Remand. For the reasons set forth herein, Plaintiff's Motion is granted.
II. BACKGROUND
On September 12, 2014, Plaintiff, individually and as the Administrator of the Estate of of David H. Osenbach, Sr., filed a complaint in the Berks County Court of Common Pleas. Compl., Ex. A, ECF No. 1. Plaintiff alleges that on March 15, 2013, her husband David H. Osenbach, Sr., was driving her vehicle when he was struck by an underinsured motorist. Id. ¶¶ 6-7. Mr. Osenbach was pronounced dead on the scene. Id. Plaintiff alleges that the vehicle driven by Mr. Osenbach was covered by an automobile insurance policy issued to him and his wife by Defendant. Id. ¶ 9. The Complaint alleges that the other driver, who was at fault in the accident, had a motor vehicle insurance policy through Progressive in the amount of $25,000/$50,000. Id. ¶ 11. Plaintiff alleges that the value of her claim greatly exceeds $25,000, and that Mr. Osenbach was an underinsured motorist at the time of the accident. Id. ¶ 12. Plaintiff alleges that Defendant has taken the position that its policy does not afford underinsured motorists coverage to Plaintiff based on a rejection of such coverage signed by Mr. Osenbach in 2009. Id. ¶¶ 13-14. Plaintiff contends that there was only a minor reference in the Renewal Declarations that "you have rejected underinsured motorists insurance," which is not in compliance with the Pennsylvania Motor Vehicle Financial Responsibility Law ("MVFRL"). Id. ¶¶ 15-16, 27. Plaintiff further alleges that the Rejection of Underinsured Motorist Protection form utilized in the policy fails to comply with Section 1731 of the MVFRL. Id. ¶¶ 16-27. Additionally, Plaintiff alleges that Mr. Osenbach did not waive coverage providing stacking of underinsured motorist coverage. Id. ¶ 24. For relief, Plaintiff asks the Court to enter judgment declaring that the Rejection of Underinsured Motorist Protection is void pursuant to Section 1731 of the MVFRL, and that underinsured motorist coverage is available to Plaintiff under Defendant's insurance policy. Id. 10.
Defendant filed a Notice of Removal to this Court on October 10, 2015, asserting that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Def. Not. Removal, ECF No. 1 (citing 28 U.S.C. § 1441(a) ). On November 3, 2015, Plaintiff filed a Motion to Remand pursuant to 28 U.S.C. § 1447(c). Pl. Mot., ECF No. 3. Plaintiff argues that under the Declaratory Judgment Act ("DJA"), 28 U.S.C. § 2201, a federal court "may declare the rights and other legal relations of any interested party seeking such declaration...." Id. (quoting 28 U.S.C. § 2201 (emphasis added)). Plaintiff submits that in deciding whether to exercise jurisdiction of declaratory judgment actions, the federal courts should "consider the state interest in having the state courts determine questions of state law." Pl. Mot. ¶¶ 12-13 (quoting State Auto Ins. Co. v. Summy , 234 F.3d 131, 135 (3d Cir.2001) (holding that "[d]ecisions in declaratory judgment actions must yield to considerations of practicality and wise judicial administration," and the "desire of insurance companies and their insureds to receive declarations in federal court on matters of purely state law has no special call on the federal forum") (internal quotations omitted)). Plaintiff asserts that this Court should decline to exercise jurisdiction because there is no federal interest in this case and the issues only involve state law. Id. ¶¶ 14-16 (citing Atl. Mut. Ins. Co. v. Gula , 84 Fed.Appx. 173, 174 (3d Cir.2003) (explaining that "federal courts should hesitate to entertain a declaratory judgment action where the action is restricted to issues of state law"); Rinkenbach v. State Auto Ins. Co. , No. 07–0870, 2007 WL 1314889, 2007 U.S. Dist. LEXIS 33141 (E.D.Pa. May 4, 2007) (remanding the declaratory action to state court because the dispute focused exclusively on a state statute, the MVFRL)).
"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a).
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In its Response filed on November 13, 2014, Defendant asserts that it satisfies the three relevant considerations articulated by the Third Circuit Court of Appeals in Summy regarding when district courts should exercise discretionary jurisdiction under the DJA. Def. Resp. ¶ 13 and Mem. (citing Summy , 234 F.3d 131 ). In Summy , the Court suggested three considerations for the district courts when deciding whether to exercise diversity jurisdiction over declaratory judgment actions involving insurance coverage issues:
1. A general policy of restraint when the same issues are pending in a state court;
2. An inherent conflict of interest between an insurer's duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of a policy exclusion;
3. Avoidance of duplicative litigation.
Summy , 234 F.3d at 134 (citing Brillhart v. Excess Ins. Co. , 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942) ; United States v. Pennsylvania, Dep't of Envtl. Resources , 923 F.2d 1071 (3d Cir.1991) ). Defendant, noting that there are no parallel actions pending in the Pennsylvania courts, contends that when the Third Circuit Court of Appeals revisited the issue of discretionary jurisdiction under the DJA in Reifer , it held that "the absence of pending parallel state proceedings militates significantly in favor of exercising jurisdiction." Reifer v. Westport Ins. Corp. , 751 F.3d 129, 144 (3d Cir.2014). Defendant argues that an analysis of the eight-factor test established in Reifer also weighs in favor of this Court exercising jurisdiction. Def. Mem. (citing Scottsdale Ins. Co. v. RSE Inc. , 303 F.R.D. 234, 237 (E.D.Pa.2014) (exercising jurisdiction of the declaratory judgment action in which the insurer sought a declaration that it had no duty to defend or indemnify)).
III. STANDARD OF REVIEW
The Declaratory Judgment Act ("DJA") provides that "any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party...." 28 U.S.C. § 2201 (emphasis added). See also Wilton v. Seven Falls Co. , 515 U.S. 277, 288, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) (The Declaratory Judgment Act "created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants."). The United States Supreme Court held that where "the District Court ha[s] jurisdiction of the suit under the Federal Declaratory Judgments Act, it [is] under no compulsion to exercise that jurisdiction." Brillhart , 316 U.S. at 494, 62 S.Ct. 1173. "This is an exception to the general rule that ‘federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress.’ " Reifer , 751 F.3d at 134–35 (quoting Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 716, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) ).
"The Supreme Court and [the Third] Circuit have long noted the importance of pending parallel state proceedings as a consideration in a district court's exercise of jurisdictional discretion under the DJA." Reifer , 751 F.3d at 143. Although "the existence or non-existence of pending parallel state proceedings is but one factor for a district court to consider," "the absence of pending parallel state proceedings militates significantly in favor of exercising jurisdiction, although it alone does not require such an exercise." Id. at 145. "[D]istrict courts declining jurisdiction should be rigorous in ensuring themselves that the lack of pending parallel state proceedings is outweighed by opposing factors." Reifer , 751 F.3d at 144. The Third Circuit Court of Appeals established a non-exhaustive list of factors for district courts to consider in deciding whether to exercise jurisdiction under the DJA that includes:
(1) the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy;
(2) the convenience of the parties;
(3) the public interest in settlement of the uncertainty of obligation;
(4) the availability and relative convenience of other remedies;
(5) a general policy of restraint when the same issues are pending in a state court;
(6) avoidance of duplicative litigation;
(7) prevention of the use of the declaratory action as a method of procedural fencing, or as a means to provide another forum in a race for res judicata; and
(8) (in the insurance context), an inherent conflict of interest between an insurer's duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of a policy exclusion.
Am. Home Assur. Co. v. Global Constr. Co., LLC , 124 F.Supp.3d 412, 414–15, No. 14–07319, 2015 WL 4975276, at *2, 2015 U.S. Dist. LEXIS 110378, at *5–6 (E.D.Pa. Aug. 19, 2015) (citing Reifer , 751 F.3d at 140 ).
IV. ANALYSIS
Initially, this Court finds that it does have diversity jurisdiction over the matter pursuant to 28 U.S.C. § 1332 as the amount in controversy exceeds $75,000 and the parties are citizens of different states. See Compl. ¶¶ 1-3, 25; Not. Removal ¶¶ 3-4. Accordingly, this Court, noting the absence of any parallel state court proceedings, will consider whether it should exercise that jurisdiction.As to the first Reifer factor, a final decision by this Court or by the state court "will resolve the uncertainty of obligation which gave rise to the controversy." See Allstate Ins. Co. v. Moyer , No. 3:14cv1992, 2015 WL 1164780, at *3, 2015 U.S. Dist. LEXIS 31314, at *6–7 (M.D.Pa. Mar. 13, 2015) (concluding that "any declaration by this court or the state court will resolve the uncertainty of the obligation which gave rise to the controversy," but finding that the "risk of this court making findings of fact that conflict with the eventual findings of the state court adds to the uncertainty of the matter [ ] and militates against the exercise of federal jurisdiction"). As there are no parallel state court proceedings, this factor is neutral.
Next, although Defendant contends that factor two, "the convenience of the parties," weighs in its favor as this matter is already in federal court, this Court finds that because the parties have not yet engaged in discovery, there has been no other litigation in this matter, and there are no pending motions, retaining jurisdiction on this basis will not be any more or less convenient for the parties. The case relied upon by Defendant, Scottsdale Ins. Co. , which concluded that because "the parties are already before us...convenience weighs in favor of exercising our jurisdiction," is distinguishable because that case was originally filed in the district court and the district court was considering whether to exercise jurisdiction in the context of a motion to dismiss. See Scottsdale Ins. Co. , 303 F.R.D. 234. Additionally, Plaintiff resides in Berks County, where this suit originated, the accident occurred in Berks County, and it appears that the insurance contract at issue was signed and/or issued in Berks County. See Compl. and Exs. A-C, ECF No. 1 (listing Lorgia Cicmansky in Reading Pennsylvania, as Plaintiff's Allstate agent on top of the insurance policy documents). This Court is located in relatively close proximity to the Berks County Court of Common Pleas; therefore, the "convenience of the parties" consideration is either neutral or weighs in favor of remand.
Factor three does not support retaining jurisdiction because there is no "public interest" in this case. See Moyer , 2015 WL 1164780 at *3, 2015 U.S. Dist. LEXIS 31314 at *7 (finding that factor three weighs in favor of declining jurisdiction because "while the public has great interest in the law governing [insurance] contracts in general, no pressing public interest in this particular dispute exists"); 1100 Adams St. Condo. Ass'n v. Mt. Hawley Ins. Co. , No. 14–2203, 2014 WL 5285466, at 6, 2014 U.S. Dist. LEXIS 147145, at 16 (D.N.J. Oct. 15, 2014) (concluding that "there does not appear to be any significant public interest at stake in resolving this case—and more specifically, there is no federal interest involved in this case, since it concerns purely questions of state law [therefore this] factor does not support retention of jurisdiction").
As to the fourth factor, "the availability and relative convenience of other remedies," there are no other remedies aside from deciding the matter here or remanding the case to the state court for determination; therefore, this factor does not impact this Court's determination as to whether to exercise jurisdiction.
There are no other state court proceedings; thus, factors five and six are inapplicable.
Factor seven directs this Court to consider "prevention of the use of the declaratory action as a method of procedural fencing, or as a means to provide another forum in a race for res judicata." "The object of the statute [the Federal Declaratory Judgment Act] is to afford a new form of relief where needed, not to furnish a new choice of tribunals or to draw into the federal courts the adjudication of causes properly cognizable by courts of the states." Travelers Ins. Co. v. Davis , 490 F.2d 536, 543 (3d Cir.1974) (internal quotations omitted). See also Mut. Pharm. Co. v. Goldman , No. 12–0815, 2012 WL 2594250, at 2*, 2012 U.S. Dist. LEXIS 92940, at *8 (E.D.Pa. July 3, 2012) (explaining that limiting who may remove an action under 28 U.S.C. § 1441 is based on "the long-accepted practice of deferring to the Plaintiff's choice of forum by treating the Plaintiff as master of his own complaint, as well as the principle that removal statutes are to be strictly construed against removal and all doubts...resolved in favor of remand") (internal quotations omitted). Other than alleging that it has satisfied the Reifer factors to allow this Court to exercise jurisdiction, Defendant fails to provide any reason why this Court should exercise jurisdiction. Cf. Am. Home Assur. Co. , 124 F.Supp.3d at 417–18, 2015 WL 4975276 at *4, 2015 U.S. Dist. LEXIS 110378 at *11–12 (finding that "American Home further states that it chose this forum for other substantive and procedural reasons" and accepting those reasons to conclude that the seventh Reifer factor merits no further analysis); Westfield Ins. Co. v. Icon Legacy Custom Modular Homes & Icon Legacy , No. 4:15–cv–00539, 2015 WL 4602262, at *5, 2015 U.S. Dist. LEXIS 99214, at *13–14 (M.D.Pa. July 30, 2015) (finding "no suggestion in this case that procedural fencing or forum selection played any role in Westfield choosing this venue to litigate its concerns" as it appeared that venue was chosen due to the fact that Icon's principal place of business is within the jurisdiction of the District Court for the Middle District of Pennsylvania). Accordingly, the seventh factor weighs in favor of remand.
The eighth Reifer factor is not implicated because this action does not raise Defendant's duty to defend.
Significantly, the eight factors described in Reifer are not an exhaustive list. "[C]ourts have held that the plaintiff's objections to federal court jurisdiction—such as we have here—is another factor in favor of remand." Weilacher v. State Farm Mut. Auto. Ins. Co. , No. 10–1401, 2010 WL 4788015, at *5, 2010 U.S. Dist. LEXIS 121124, at *13–14 (W.D.Pa. Nov. 16, 2010) (citing Rinkenbach v. State Auto Ins. Co. , CA No. 07–870, 2007 WL 1314889, *3–4, 2007 U.S. Dist. LEXIS 33141, *10 (E.D.Pa. May 4, 2007) ). Consequently, this consideration weighs in favor of remand.
Moreover, "[i]n cases which revolve solely around state law issues, federal courts should hesitate to entertain such actions." Weilacher , 2010 WL 4788015 at *4, 2010 U.S. Dist. LEXIS 121124 at *10 (remanding the matter, despite the absence of parallel state proceedings, in which the plaintiffs asked the court to interpret the insurance policy to determine whether coverage for two vehicles should be stacked). The district courts "are loath to exercise declaratory jurisdiction where the sole issue in controversy neither presents any federal question nor promotes any federal interest." Moyer , 2015 WL 1164780 at *4, 2015 U.S. Dist. LEXIS 31314 at *8 (determining that a state court can just as easily decide whether the plaintiff owes any liability coverage under the insurance policy, applying well-settled principles of Pennsylvania law, "and there is no need to resort to a federal forum"). In refusing to exercise jurisdiction over a declaratory judgment action, one district court recently explained:
Importantly, the issues of insurance coverage and defense in this case present no federal question, nor do they promote any federal interest. Indeed, this action
presents the common case of an insurance company coming to federal court, under diversity jurisdiction, to receive declarations on purely state law matters. This weighs heavily against the Court exercising jurisdiction over this declaratory judgment action. In addition, the state's interest in determining issues of state law also weighs against exercising jurisdiction in declaratory judgment actions.
Encompass Ins. Co. of Am. v. Connelly , No. 15–737, 2015 U.S. Dist. LEXIS 74993, at *5 (W.D.Pa. June 10, 2015) (finding that "this dispute is not governed by federal law," "there are no federal interests at stake," the "state law to be applied is well settled," and the "rules that the state court system is more than capable of resolving this dispute in accordance with its own law").
Here, this Court will not simply have to interpret an insurance contract to determine coverage, but must decide whether that contract and the rejection of underinsured motorist coverage are void under a state statute. Where a "determination would rest solely on an interpretation of the Pennsylvania MVFRL, and would not implicate any federal laws or rights," there is "no special call on the federal forum." Alisha L. Ford v. Am. States Ins. Co. , No. 13–1211, 2014 WL 267003, at *3, 2014 U.S. Dist. LEXIS 8184, at *3–4 (W.D.Pa. Jan. 23, 2014) (concluding "that state court is the more appropriate forum to answer the question presented in this declaratory judgment action," which was whether the rejection of Underinsured Motorist Coverage was invalid under section 1731 of the MVFRL (citing Summy , 234 F.3d 131 )). Consequently, this Court concludes that there is no federal interest in this case. See Williams v. State Auto Prop. & Cas. Ins. Co. , No. 08–4983, 2009 WL 1119502, at *2, 2009 U.S. Dist. LEXIS 35511, at *8 n. 1 (E.D.Pa. Apr. 24, 2009) ("The fact that there is no parallel declaratory judgment state court proceeding pending in this case is not determinative and is outweighed by the lack of any federal interest in this dispute."); Dixon v. Progressive Northern Ins. Co. , No. 2:08cv1010, 2008 WL 4072816, at *2, 2008 U.S. Dist. LEXIS 65594, at *6–7 (W.D.Pa. Aug. 27, 2008) (finding that the absence of a parallel state court proceeding is not determinative and "is clearly outweighed by the lack of any federal interest in this case").
V. CONCLUSION
For the reasons discussed herein, the lack of pending parallel state proceedings is outweighed by opposing factors and the matter is remanded to the Berks County Court of Common Pleas.
A separate Order follows.