Opinion
CIVIL ACTION 03-CV-1379.
May 15, 2003.
MEMORANDUM AND ORDER
Safeco Insurance Company ("Safeco") brought this action seeking a declaration that it has no duty to provide coverage to its insured, defendant Wilson Area School District ("Wilson"), pursuant to a performance bond. Wilson, arguing that this Court lacks subject matter jurisdiction to entertain Safeco's claim because a state court decided the identical issue in an action currently pending in the Northampton County Court of Common Pleas, now moves to dismiss Safeco's complaint.
Jurisdiction in this declaratory judgment action is predicated on the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq.
After a review of Wilson's motion and Safeco's response and a review of the record, we determine that the Rooker-Feldman doctrine deprives this Court of subject matter jurisdiction. Accordingly, Wilson's motion to dismiss will be granted and Safeco's complaint will be dismissed.
Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).
State Court Action
Wilson filed the related state court action against a general contractor, an architect a masonry subcontractor and Safeco, seeking damages for defects in the construction of a school which had been completed seven years earlier. According to Wilson's complaint, in June of 1992, Wilson contracted with Franklin E. Skepton ("Skepton") for the construction of a new high school and gymnasium. (Complaint of Wilson in the Northampton County Court of Common Pleas ¶ 9, found at Def. Mot. to Dismiss Pl. Complaint at Ex. 1). As required by the contract, Safeco issued a performance bond to Wilson on behalf of Skepton, guaranteeing the construction against any defects for one year from the date of completion. Id. at ¶ 10. Construction on the high school was completed in 1994. Id. at ¶ 13. In 1999, Wilson found several defects in the structure. Id. at ¶¶ 14-26. It submitted a claim to Safeco pursuant to the performance bond which Safeco had issued on behalf of Skepton, the general constractor. Safeco denied the claim because it was submitted more than one year after the construction had been completed. (Pl. Ans. to Def. Mot. to Dismiss at 2).
Wilson filed suit in state court on March 31, 2001. On December 4, 2001, Safeco filed a motion for judgment on the pleadings in the state court action raising the same argument it now asserts in this action. (Pl. Ans. to Def. Mot. to Dismiss at 2-3). On February 28, 2002, the Honorable Edward G. Smith of the Northampton County Court of Common Pleas denied Safeco's motion on the ground that Pennsylvania's doctrine of nullum tempus occurrit regi abrogates the applicable statute of limitation in actions brought by the Commonwealth. (Order of Court at 3, found at Def. Mot. to Dismiss Pl. Complaint at Ex. 4).
A school district is considered a political subdivision of the Commonwealth. 1 Pa.C.S. § 1991.
The state court litigation is still pending. In the meantime, Safeco did not petition for permission to take an appeal pursuant to Pennsylvania Rule of Appellate Procedure 1311.
Subject Matter Jurisdiction
Safeco filed this action on March 3, 2003, more than one year after Judge Smith denied its motion for judgment on the pleadings in state court. Here, Safeco requests a declaration that the one year limitation in the performance bond controls. There is no federal question raised. Instead, the issues involved are purely of state concern.
When a claim has been actually litigated in state court or is "inextricably intertwined" with state court proceedings, the Rooker-Feldman doctrine deprives a federal court of subject matter jurisdiction. Desi's Pizza, Inc. v. City of Wilkes-Barre, 321 F.3d 411, 417-18 (3d Cir. 2003). The doctrine applies "where federal relief can only be predicated upon a conviction that the state court was wrong." Parkview Assoc. P'ship v. City of Lebanon, 225 F.3d 321, 325 (3d Cir. 2000). A federal court has an obligation to raise sua sponte the issue where the doctrine is implicated and to determine which aspect of the doctrine applies. Desi's Pizza, 321 F.3d at 420.
A claim has been actually litigated in state court if the claim was presented to the state court for review and the state court addressed it. Id. at 420-21. Safeco, in its response to Wilson's motion to dismiss the present action, concedes that it moved for dismissal of the state court action "on the grounds that the term of coverage had expired." (Pl. Ans. to Def. Mot. to Dismiss at 2). In his opinion denying Safeco's motion, Judge Smith framed the issue as whether Wilson's claim for coverage under the surety bond still existed in light of the one year limitation in the bond. (Order of Court at 2, found at Def. Mot. to Dismiss Pl. Complaint at Ex. 4). His holding, based on Pennsylvania's doctrine of nullum tempus and its effect on the statute of limitations, was that the doctrine works to "nullify the one year statute of limitations contained in the Performance Bond." Id. at 4. In its federal complaint, Safeco attempts to reassert this identical issue, requesting that this Court "declar[e] that there is no coverage under the Performance Bond issued by Safeco Insurance Company of America concerning the alleged construction deficiencies claimed by the Wilson Area School District." (Complaint at 4). Though Safeco changed the wording of the claim in its federal complaint, the substance is identical to the argument it made before the state court. Therefore, we find that Safeco actually litigated its claim in the state action.
Even if we were to accept Safeco's position that it did not previously assert this claim in the state court, we find that Safeco's claim is nevertheless inextricably intertwined with the state court action. A federal claim is inextricably intertwined with a state court action if the federal court must determine that the state court judgment was erroneous or the federal court must take action which would render the state judgment ineffective. Desi's Pizza, 321 F.3d at 421. In making this determination, the federal court is required to identify the basis for the state court decision. Id.
Judge Smith relied on a Pennsylvania doctrine and the underlying policy considerations in ruling that the one year limitation period in the bond did not apply. (Order of Court at 3, found at Def. Mot. to Dismiss Pl. Complaint at Ex. 4). If this Court were to entertain Safeco's complaint and make a declaration, our ruling would have the practical effect of "revers[ing] the state court judgment" and "would prevent a state court from enforcing its orders." Desi's Pizza, 321 F.3d at 422.
In effect, Safeco asks us to overrule the state court. To grant Safeco relief would require us to review the state court's ruling. We refuse to do so.
In refusing to exercise subject matter jurisdiction, we do not express an opinion on whether the ruling of the Northampton County Court of Common Pleas was correct. Because the state court has adjudicated this issue, it is not for us to decide.
An order will follow.
ORDER
AND NOW, this 15th day of May, 2003, upon consideration of Defendant Wilson Area School District's Motion to Dismiss Plaintiff's Complaint (Docket No. 3) and the Plaintiff Safeco Insurance Company's Answer to Defendant's Motion to Dismiss Plaintiff's Complaint, it is ORDERED that the plaintiff's complaint is DISMISSED.