The opinion of the court was delivered by: WILLIAM STIEHL, Senior District Judge
Before the Court is defendant Morrissey Construction Company's
motion to dismiss, to which plaintiff has filed a response and
defendant a reply.
In order to address the motion to dismiss, it is necessary to
set forth the relationship between the parties in this case.
Defendant Arthur Boze, an employee of defendant Diecker-Terry
Masonry, Inc., was injured during a construction accident while
working on a project at Landsdown Middle School in East St.
Louis, Illinois. Defendant Morrissey was the general contractor
at the site, and Dieker-Terry a subcontractor. Boze sued
Morrissey for negligence in state court, and has sought leave to
amend his complaint in that action so as to include Dieker-Terry
as a defendant. Morrissey then filed a third-party complaint for
contribution against Dieker-Terry.
With respect to insurance coverage, Dieker-Terry has a primary
policy of liability insurance, as well as a worker's compensation
and employer's liability policy, with Harleysville Lake States
Insurance Company ("HLSIC"). The HLSIC policy provides coverage
to Morrissey as an additional insured, and HLSIC is currently defending
Morrissey in the underlying state court negligence action.
Dieker-Terry also obtained a commercial umbrella liability policy
from plaintiff; Morrissey is an additional insured on that policy
In this action for declaratory judgment, plaintiff Columbia
Mutual Insurance Company seeks a declaration that: (a) coverage
is excluded for liability assumed by Dieker-Terry pursuant to the
terms of its subcontract with Morrissey; (b) Exclusion "s"
precludes coverage for Morrissey's third-party claim for
contribution against Dieker-Terry; (c) the policy issued by
plaintiff (hereafter, the "Columbia policy") does not provide
coverage to Dieker-Terry over and above the worker's compensation
and employer's liability policy issued by HLSIC for the
third-party complaint filed against Dieker-Terry by Morrissey for
an amount in excess of HLSIC's worker's compensation lien; (d)
the Columbia policy shall be considered "in excess" of all
underlying primary insurance for Dieker-Terry and Morrissey; (e)
there is no coverage under the Columbia policy for the conspiracy
and spoliation claims against Dieker-Terry and Morrissey; and (f)
there is no coverage under the Columbia policy for punitive
Prior to the filing of the instant suit, Morrissey filed, in
the Circuit Court for the Third Judicial Circuit, Madison County,
Illinois, its own suit for declaratory judgment against plaintiff
Columbia Mutual Insurance Company. Specifically, that suit seeks
a declaration that Columbia must provide coverage to Morrissey
with respect to Boze's claims, and that Columbia's policy applies
as the sole insurer with respect to the Boze lawsuit following
the exhaustion of the HLSIC policy. That suit was removed to this
Court, see Cause No. 05-CV-489-WDS, was subsequently remanded and
is currently pending in state court.
Morrissey now moves to dismiss this action on the ground that
it is duplicative of its own earlier-filed declaratory judgment
action pending in state court. Specifically, it argues that the basic issue presented by both suits is the extent of coverage
available under Columbia's commercial umbrella liability policy
as it relates to Boze's underlying suit for negligence. In
response, plaintiff claims that its complaint for declaratory
judgment is much broader than that of Morrissey; it also points
out that Boze and Dieker-Terry are not parties to the state court
declaratory judgment action, and thus, will arguably not be bound
by the state court decision.
In light of the foregoing and the claims presented in each
action, the Court concludes that the issues presented in the two
declaratory judgment actions, while not identical, certainly
provide enough overlap so as to convince the Court that
Morrissey's motion to dismiss has merit. However, the Court finds
that a stay, rather than dismissal, is appropriate in this case.
Cf. Lumen Constr., Inc. v. Brant Constr. Co., 780 F.2d 691, 698
(7th Cir. 1986) (preferable course of action is a stay rather
than dismissal, so as to "permit the federal court to retain
jurisdiction in case the state court action does not meet its
The Declaratory Judgment Act, 28 U.S.C. § 2201, provides the
Court wide discretion to abstain from exercising jurisdiction in
declaratory judgment actions. See, Wilton v. Seven Falls Co.,
515 U.S. 277, 282, 115 S.Ct. 2137, 2140 (1995) (citing Brillhart
v. Excess Ins. Co. of Am., 316 U.S. 491, 62 S.Ct. 1173 (1942)).
Consequently, "consistent with the nonobligatory nature of the
[Declaratory Judgment Act]", id. at 288, stays granted pursuant
to the Declaratory Judgment Act are not subject to the
"exceptional circumstances" standard of the Colorado River
doctrine found in Colorado River Water Conservation Dist. v.
United States, 424 U.S. 800, 813, 96 S.Ct. 1236 (1976).
Here, a resolution of the state court action may dispose of one
or more claims in this case. The Court finds that for purposes of
judicial economy, it is reasonable to stay this action.
Accordingly, the Court sua sponte STAYS this action pending
resolution of the state court declaratory judgment action, Morrissey Construction
Company v. Columbia Mutual Insurance Company, Cause No.
05-MR-288. Defendant Morrissey Construction Company's motion to
dismiss is DENIED as moot. The parties are DIRECTED to file a
notice advising the Court of the outcome or resolution of that
state action within thirty days of its completion. All pending
motions are DENIED with leave to refile those motions should it
become necessary after resolution of the state court action.