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Bridgefield Casualty Insurance Co. v. River Oaks Management, Inc.

United States District Court, E.D. Louisiana

January 9, 2015

BRIDGEFIELD CASUALTY INSURANCE COMPANY,
v.
RIVER OAKS MANAGEMENT, INC.

ORDER AND REASONS

JANE TRICHE MILAZZO, District Judge.

Be fore the Court is Defendant's Motion to Dismiss or Alternatively Stay Proceedings. (Doc. 8). For the following reasons, the Motion is DENIED.

BACKGROUND

Plaintiff Bridgefield Casualty Insurance Company issued a Worker's Compensation and Employers Liability Insurance Policy ("the Policy") to Defendant River Oaks Management, Inc. Plaintiff seeks a declaration that the Policy does not provide coverage for damages arising out of an accident that occurred on June 8, 2012.

Ernest Stoltz, a RiverOaks employee, was severely injured when he fell from a ladder at one of River Oak's Mississippi locations. On April 29, 2014, Stoltz filed suit in Mississippi state court, seeking recovery for injuries allegedly sustained as a result of the accident ("Mississippi Suit"). That action was removed on the basis of diversity to the United States District Court for the Southern District of Mississippi, where it is currently pending.[1] After the Mississippi Suit was filed, River Oaks demanded defense and indemnity from Bridgefield pursuant to the policy provisions that provide employer's liability coverage. Plaintiff extended defense to Defendant subject to a Reservation of Rights and filed the instant suit. Here, Plaintiff seeks a declaration that it does not owe Defendant defense or indemnity for the Mississippi Suit. Defendant responded with this Motion seeking a discretionary dismissal of Plaintiff's action due to the pendency of the Mississippi Suit.

LEGAL STANDARD

The determination of whether to entertain an action for a declaratory judgment is left to the discretion of the trial court.[2] "In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations ofpracticality and wise judicial administration."[3] This discretion is not unfettered.[4] Under applicable Fifth Circuit precedent, "unless the district court addresses and balances the purposes of the Declaratory Judgment Act and the factors relevant to the abstention doctrine on the record, it abuses its discretion."[5]

LAW AND ANALYSIS

In Brillhart v. Excess Insurance Co. of America, the United States Supreme Court identified several non-exclusive factors to determine if abstention is appropriate under the Declaratory Judgment Act.[6] In St. Paul Insurance Co. v. Trejo , the Fifth Circuit distilled these factors into a nonexclusive list:

1) whether there is a pending state action in which all of the matters in controversy may be fully litigated,
2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant,
3) whether the plaintiff engaged in forum shopping in bringing the suit,
4) whether possible inequities in allowing the declaratory plaintiff to gain precedence in time ...

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