United States District Court, W.D. Louisiana, Lafayette Division
REPORT AND RECOMMENDATION
B. WHITEHURST, UNITED STATES MAGISTRATE JUDGE.
the Court is Defendant Doris Usie's (“Usie”)
Motion To Dismiss Pursuant to F.R.C.P. Rules 12(b)(1) and 12
(b)(6) [Rec. Doc. 12] and Plaintiff, Massachusetts Bay
Insurance Company's (“Massachusetts Bay”)
Opposition [Rec. Doc. 14]. The motion was referred to the
undersigned for review, report, and recommendation in
accordance with the provisions of 28 U.S.C. § 636 and
the standing orders of this court. For the reasons set forth
below, the undersigned recommends that the motion be denied.
declaratory judgment action filed by Massachusetts Bay arises
out of an underlying action filed in Louisiana state court by
Usie against Royer Mobile Homes of Opelousas, Inc.
(“Royer”), Doris H. Usie v. Sunshine Homes,
Inc. and Royer Mobile Homes of Opelousas, Inc., No.
82841, 16th Judicial District Court for the Parish
of St. Martin, State of Louisiana (“the underlying
action”). R. 1-3. In the underlying action Usie alleges
the design and construction of the mobile home she purchased
from Royer allowed water to infiltrate its walls and cause
mold infestation which in turn caused her to suffer
“mold sickness.” She filed suit against Royer and
the manufacturer for damages in redhibition and in tort.
case at bar, Massachusetts Bay seeks Declaratory Judgment
pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal
Rules of Civil Procedure against defendants, Usie and Royer,
regarding the parties' respective rights and obligations
under a certain policy of insurance issued by Massachusetts
Bay to Royer as the named insured, specifically, Policy No.
LDS 8888387 (“the Policy”). R. 1-2. Massachusetts
Bay seeks a judgment declaring that it has no duty to provide
coverage, and no duty to defend or indemnify Royer, under the
Policy with respect to the claims asserted by Usie against
Royer in her Petition for Damages in the underlying state
The Parties' Contentions
filed this motion seeking dismissal on three grounds: (1)
pursuant to Rule 12(b)(1), based on lack of diversity
jurisdiction, claiming the amount in controversy is not met
and the parties are not truly diverse; (2) pursuant to Rule
12(b)(6), on the ground that Massachusetts Bay's claims
are not ripe for resolution since the underlying liability
action has not proceeded to judgment; and (3) even if the
Court has subject matter jurisdiction and the coverage issues
are ripe for adjudication, the Court should nevertheless
abstain from hearing the action in deference to the pending
state court liability action.
Bay refutes Usie's arguments as to diversity of the
parties and amount in controversy contending that Usie
alleges more than $200, 000 in damages and Massachusetts Bay
and defendants are citizens of different states.
Massachusetts also refutes lack of justiciability asserting
the United States Supreme Court has resolved the issue in
favor of the insurer, in this case Massachusetts Bay. As to
Usie's contention that the Court should abstain from
hearing this action in deference to the pending state court
action, Massachusetts Bay contends that all of the factors in
St. Paul Ins. Co. v. Trejo, 39 F.3d 585
(5th Cir. 1994) weigh in favor of this Court
maintaining the declaratory judgment action.
Law and Analysis
Declaratory Judgment Act, at 28 U.S.C. § 2201(a),
... 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 seeking such declaration,
whether or not further relief is or could be sought. Any such
declaration shall have the force and effect of a final
judgment or decree and shall be reviewable as such.
“is an enabling act, which confers discretion on the
courts rather than an absolute right on a litigant.”
Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995).
When “considering a declaratory judgment action, a
district court must engage in a three-step inquiry.”
Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891,
895 (5th Cir. 2000). First, the court must determine whether
the declaratory action is justiciable. Or, in other words,
whether an “actual controversy” exists between
the parties to the action. Id. Second, if the court
has jurisdiction, it must determine whether it has the
“authority” to grant declaratory relief.
Id. Finally, the court must determine whether to
exercise its discretion to decide or dismiss the declaratory
action. Id. The Court will address the foregoing
issues in turn.
Amount in Controversy
contends, without support, that jurisdiction is lacking
because the amount in controversy is not met. “[T]here
is no actual amount in controversy between [Massachusetts
Bay] and Doris Usie, ” and it would be
“impossible” for the dollar amounts in
controversy between Usie and Royer in the state court suit
“to also be in controversy in the instant federal court
matter.” R. 12, p. 7.
Fifth Circuit jurisprudence is clear that, in a declaratory
judgment action, the amount in controversy is measured by the
value of the underlying claim. See Hartford Ins. Group v.
Lou-Con, Inc., 293 F.3d 908, 911 (5th Cir. 2002)
(explaining that in declaratory judgment cases that involve
the question of whether an insurance policy applies to a
particular loss, the amount in controversy is determined by
the value of the underlying claim against the insured);
Great American Ins. Co. of New York v. L.D. Marine,
LLC, 2009 WL 2019994 at *2 (W.D. La. 2009) (“In
declaratory judgment cases that involve the applicability of
an insurance policy to a particular occurrence, the
jurisdictional amount in controversy is measured by the value
of the underlying claim.”).
state court petition in the underlying suit provides that she
seeks to recover the $39, 500 purchase price of her
manufactured home, R. 1-3, ¶¶ 6, 44, $15, 000 in
repair expenses, Id. ¶¶ 26, 43, $100, 000
in medical expenses, Id. ¶¶ 27, 43, $51,
000 per year in lost income, Id. ¶¶ 28,
43, as well as unspecified damages for loss of use and
inconvenience, pain, and suffering. Id. ¶ 44.
Thus, Usie alleges over $200, 000 in damages. Because the
amount in controversy is facially apparent from Usie's
underlying petition, the Court finds that the value of the
claims at issue exceed $75, 000. See First Specialty Ins.
Co. v. Arkel Sugar, Inc., 2008 WL 762079 (W.D. La. 2008)
(in insurer's declaratory judgment action against
policyholder and underlying state court plaintiff, court
found that it need not consider summary judgment-type
evidence because the requisite amount in controversy was
facially apparent from underlying petition); Petrohawk
Energy Corp. v. Raceland Raw Sugar Corp., 2007 WL
1551061 (E.D. La. 2007) (denying defendant's Rule
12(b)(1) motion to dismiss declaratory judgment action,
finding it facially apparent that value of claims at issue
exceeded $75, 000).
Diversity of Citizenship
argues that the parties are not diverse because the real
controversy is between Usie and Royer, who are both Louisiana
citizens. Here, the record establishes that Plaintiff,
Massachusetts Bay, is a Connecticut corporation with its
principal place of business in Connecticut. R. 1, ¶1.
Defendant, Usie, is an individual domiciled in Louisiana, R.
1-3, and Defendant, Royer, is a Louisiana corporation with
its principal place of business in Louisiana. Id. at
¶ 2. As Plaintiff and Defendants are not citizens of the
same state, complete diversity exists between them. See
First Specialty Ins. Co. v. Arkel Sugar, Inc., et al.,
2008 WL 762079 (W.D. La. 2008) (exercising diversity
jurisdiction over declaratory judgment action filed by
out-of-state insurer against Louisiana policyholder and
Louisiana state-court plaintiff); ...