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Sentry Select Insurance co. v. Heck

United States District Court, S.D. Illinois

March 27, 2017

SENTRY SELECT INSURANCE COMPANY Plaintiff,
v.
ARTHUR HECK, DARLENE HECK, and CHUCK HECK'S AUTO REPAIR & TOWING, INC., Defendants. and ROBERT LEE MAYBERRY and MICHELLE MAYBERRY, Indispensable Defendants.

          MEMORANDUM AND ORDER

          DAVID R. HERNDON UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Now before the Court is indispensable defendants Robert and Michelle Mayberry's motion to dismiss (Doc. 26). Specifically, the defendants move for the dismissal of plaintiff's complaint for declaratory judgment pursuant to Federal Rule of Civil Procedure 12(b)(1) and 28 U.S.C. §1332 for lack of subject matter jurisdiction. Naturally, plaintiff Sentry Select Insurance Company (hereinafter “Sentry”) opposes the motion (Doc. 29). For the reasons stated below, defendants' motion to dismiss is GRANTED.

         II. Background

         On March 1, 2016, Sentry filed the pending lawsuit seeking a declaratory judgment pursuant to 28 U.S.C. §§ 2201, et seq., and Rule 57 of the Federal Rules of Civil Procedure for events arising out of an automobile accident that occurred on or about June 9, 2015 at the intersection of Ferguson Avenue and Third Street in Wood River, Illinois. Sentry argues that this Court has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332(a) because the controversy is between citizens of different states and exceeds the sum of $75, 000 exclusive of interest and costs (Doc. 1).

         Specifically Sentry seeks a declaration that it “does not owe a duty to defend or indemnify defendants with regard to the lawsuit styled Robert Mayberry and Michelle Mayberry v. Arthur Heck, Chuck Heck's Repair & Towing, Inc. d/b/a Chuck Hecks Auto Repair & Tow, and Darlene Heck d/b/a Chuck Heck's Auto Repair & Towing Inc. and d/b/a Chuck Hecks Auto Repair & Tow filed under action number 15-L-893 in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois” (Doc. 1, ¶3). Sentry goes on to allege that it has “no adequate remedy at law and, therefore, desires a judicial determination of its rights and duties in accordance with the Sentry Policy.” The Mayberrys, as the injured parties from the accident, filed an action against the Heck defendants in Madison County Circuit Court on July 16, 2015. Thereafter, on February 5, 2016, the Mayberrys filed a motion to amend their complaint in order to add a claim for declaratory judgment against Sentry in the pending state court action (Doc. 26-2). The amended complaint was later filed on March 28, 2016 (Doc. 26-4).

         The underlying facts of the Madison County lawsuit allege that at the time of the accident, Robert Mayberry was operating his motorcycle with Michelle Mayberry riding as his passenger on the motorcycle. Arthur Heck, acting within the scope of his employment with Chuck Heck's Auto Repair & Towing, was operating a tow truck owned by Heck's Auto Repair & Towing with a vehicle owned by Weber Chevrolet on the flatbed portion of the truck. The state court complaint alleges that Arthur Heck was negligent in failing to yield to a stop sign, and struck the Mayberry's motorcycle as a result (Doc. 1, ¶21). The Mayberry defendants allege that the underlying personal injury suit pending in state court, inclusive of a count for declaratory judgment as to the liability on the Sentry insurance policy issued to Weber Granite City Chevrolet, is parallel to Sentry's action before this Court. Thus, on April 26, 2016, the Mayberry defendants filed the pending motion to dismiss for lack of subject matter jurisdiction based on the Wilton/Brillhart abstention doctrine (Doc. 26).

         III. Motion to Dismiss

         The subject motion is filed pursuant to Federal Rules of Civil Procedure 12(b)(1). Rule 12(b)(1) requires dismissal if the Court lacks subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The Seventh Circuit has stated that although a plaintiff may easily defeat a Rule 12(b)(6) motion to dismiss for failure to state a claim, the same is not true for a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Bastien v. AT & T Wireless Services, Inc., 205 F.3d 983, 990 (7th Cir. 2000). When a defendant makes a 12(b)(1) challenge, the plaintiff bears the burden of establishing jurisdiction. The Court must “accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff.” St. John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th Cir.2007) (citation omitted). Yet, a court may receive and weigh evidence outside the allegations in the complaint to determine if it has subject matter jurisdiction over the case. Id. In any event, the plaintiff has the burden of proving that subject matter jurisdiction exists. Id. With this standard in mind, the Court now turns to defendant's arguments for dismissal.

         IV. Analysis

         a. Wilton/Brillhart

         Abstention Doctrine “Under what is known as the Wilton/Brillhart abstention doctrine, district courts possess significant discretion to dismiss or stay claims seeking declaratory relief, even though they have subject matter jurisdiction over such claims.” Envision Healthcare, Inc. v. PreferredOne Ins. Co., 604 F.3d 983 (7th Cir. 2010). Wilton/Brillhart doctrine applies “in a diversity case where a declaratory judgment is sought and a parallel state proceeding also exists.” Envision, 604 F.3d at 986 (citing Wilton v. Seven Falls Co., 515 U.S. 277, 283 (1995); Provident Tradesmens Bk. & Tr. Co. v. Patterson, 390 U.S. 102, 126 (1968) (noting “we reaffirm our prior holding that a federal district court should, in the exercise of discretion, decline to exercise jurisdiction over a diversity action raising issues of state law when those same issues are being presented contemporaneously to state courts.”)); see also R.R. St. & Co. v. Vulcan Materials Co., 569 F.3d 711(7th Cir. 2009) (“There is no doubt that a court may dismiss or stay an action under the Wilton/Brillhart abstention doctrine where solely declaratory relief is sought.”).

         Determining whether abstention is appropriate involves a two-step inquiry. First, the Court must determine whether the state and federal cases are parallel. Id. at 716-17. If the cases are parallel, the Court must then determine whether the non-declaratory claims are independent of the declaratory claims. Id.[1]

         A suit is ‘parallel' “when substantially the same parties are contemporaneously litigating substantially the same issues in another forum”. Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1288 (7th Cir.1988); see also S ...


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