Opinion
Case No. 03-2522-GTV
February 3, 2004
MEMORANDUM AND ORDER
Plaintiff Park University Enterprises, Inc. ("Park") originally brought this breach of contract and declaratory judgment action against Defendants CNA Insurance Companies ("CNA") and American Casualty Company of Reading, PA ("ACC"), alleging that the insurance companies have duties to defend Park in a lawsuit filed against Park in state court and to indemnify Park for any damages awarded.
CNA and ACC moved to dismiss portions of Park's complaint (Doc. 9). Specifically, CNA and ACC moved to dismiss CNA from the case, and to dismiss counts three, four, and five of the complaint. For the following reasons, the court denies the motion to dismiss.
In response to the motion to dismiss, Park filed an amended complaint, omitting count five and the claims against CNA. The motion to dismiss is now moot with respect to those claims.
Park did not amend counts three or four in its amended complaint. The substance of CNA and ACC's arguments regarding counts three and four of Park's original complaint still apply, and in the interest of a "just, speedy, and inexpensive determination" of the action, the court will construe the motion to dismiss as applying to Park's amended complaint. See Fed.R.Civ.P. 1.
Counts three and four are claims for indemnification. Park seeks a declaration that ACC must indemnify it for any judgment rendered against Park in the currently-pending state court action. Park also seeks damages resulting from ACC's refusal to indemnify Park. ACC asks the court to dismiss these claims without prejudice because they are not yet ripe for review, and will not be ripe until the state court action is resolved. The court declines to do so.
Whether a claim is ripe for adjudication is "peculiarly a question of timing." Reg'l Rail Reorganization Act Cases, 419 U.S. 102, 140 (1974). "A claim is not ripe for adjudication if it rests upon 'contingent future events that may not occur as anticipated, or indeed may not occur at all.'" Texas v. United States, 523 U.S. 296, 300 (1998) (quoting Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81 (1985)) (additional citation and internal quotation marks omitted). "The case or controversy requirement of Article III admonishes federal courts to avoid 'premature adjudication' and to abstain from 'entangling themselves in abstract disagreements.'"U.S. West Inc. v. Tristani, 182 F.3d 1202, 1208 (10th Cir. 1999) (quoting Keyes v. Sch. Dist. No. 1, Denver, Colo., 119 F.3d 1437, 1443 (10th Cir. 1997)) (additional citation omitted). However, "[t]he contingent nature of the right or obligation in controversy will not bar a litigant from seeking declaratory relief when the circumstances reveal a need for a present adjudication." Allendale Mut. Ins. Co. v. Kaiser Eng'rs, 804 F.2d 592, 594 (10th Cir. 1986).
The court is satisfied that an actual case or controversy exists with respect to ACC's duty to indemnify. The mere fact that Park's indemnity claims may not be ready for decision on the current record does not mean that the claims should be dismissed without prejudice. Dismissal would only result in wasted judicial resources and duplicative filings. Moreover, the court determines that the nature of insurance indemnification claims justifies keeping Park's claims in the case; "It would turn the reality of the claims adjustment process on its head to hinge justiciability of an insurance agreement on the maturation of a suit to a judgment when the overwhelming number of disputes are resolved by settlement." ACandS, Inc. v. Aetna Cas. Surety Co., 666 F.2d 819, 823 (3d Cir. 1981).
ACC cites Carpenter, Weir Myers v. St. Paul Fire Marine Ins. Co., No. 96-4076-SAC, 1998 WL 976309 (D. Kan. Oct. 30, 1998), for the proposition that counts three and four are not ripe for adjudication. The Carpenter. Weir Myers court stated, "[T]he duty to indemnify is not ripe for adjudication until the insured is in fact held liable in the underlying suit." 1998 WL 976309, at *12 (quoting Allstate Indem. Co. v. Lewis, 985 F. Supp. 1341, 1349 (M.D. Ala. 1997)) (additional citation and internal quotation marks omitted). Although the court refused to address the indemnification claims until the underlying suit was resolved, there is no indication that the court dismissed the claims. See id. The case therefore supports this court's decision.
IT IS, THEREFORE, BY THE COURT ORDERED that ACC's motion to dismiss (Doc. 9) is denied.
Copies or notice of this order shall be transmitted to counsel of record. IT IS SO ORDERED.