Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_16-cv-08211/USCOURTS-azd-3_16-cv-08211-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgment

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WO NOT FOR PUBLICATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

National Farmers Union Property & 

Casualty Company, 

Plaintiff, 

v. 

Ann Etten, et al., 

Defendants. 

No. CV-16-08211-PCT-JJT

ORDER 

 At issue is Defendants Ann Etten and Erica Etten’s Motion to Dismiss (Doc. 22, 

Mot.), to which Plaintiff National Farmers Union Property & Casualty Company filed a 

Response (Doc. 32, Resp.), and in support of which Defendants filed a Reply (Doc. 36, 

Reply). Defendants Gregory Robinson, Grace Robinson-Klonoski, and Erica F. Smith 

joined in Ann and Erica Etten’s Motion (Docs. 30, 35) and Reply (Docs. 37, 38). The 

Court finds this matter appropriate for resolution without oral argument. See LRCiv 

7.2(f). 

I. BACKGROUND 

On July 1, 2015, Defendant Erica Etten was driving a Lincoln MKZ (the “MKZ”) 

partially purchased and cosigned for by her mother, Defendant Ann Etten, and struck two 

cyclists, both of whom later died. The statutory beneficiaries and estates of the decedent 

cyclists (the “Wrongful Death Action Plaintiffs”) filed a wrongful death action against 

Ann and Erica Etten in Mohave County Superior Court alleging negligence and 

negligence per se. See Gregory Robinson, et al. v. Erica Etten, et al., Mohave County, 

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Case No. CV2015-07216. The Wrongful Death Action Plaintiffs allege that Ann Etten is 

vicariously liable for the collision by virtue of the Family Purpose Doctrine—an Arizona 

state law principle. The Wrongful Death Action remains pending with discovery ongoing. 

 The Wrongful Death Action Plaintiffs allege that Ann Etten provides substantial 

financial support and assistance to Erica Etten. While Ann Etten primarily resides in 

Dalton, Minnesota, Erica Etten has consistently resided in investment properties owned 

by her parents in Lake Havusa City, Arizona. Throughout this time, Ann Etten, as well as 

her husband, maintained two primary insurance policies covering their various vehicles, 

properties, and liabilities (the “Umbrella Policy” and “Farm Policy”). Simultaneously, 

Ann Etten maintained a separate insurance policy covering the MKZ (the “MKZ 

Policy”). 

 After Erica Etten’s accident occurred, the insurance company that issued and 

maintained the MKZ Policy agreed to defend and indemnify Ann and Erica Etten under 

the MKZ Policy. The attorneys defending Ann and Erica Etten under that policy have 

asserted that Ann Etten should not be held vicariously liable under the Family Purpose 

Doctrine. 

 On August 12, 2015 and September 11, 2015, Plaintiff denied coverage to the 

Ettens under the Umbrella and Farm Policies the family maintained asserting various 

exclusions and omissions. On July 11, 2016, counsel for the Wrongful Death Action 

Plaintiffs sent a demand letter to Plaintiff and Defendants to settle the claims. On July 28, 

2016, personal counsel for Ann Etten tendered Ann Etten’s defense and indemnity to 

Plaintiff under the Farm Policy. On August 30, 2016, Plaintiff reaffirmed its denial of 

coverage under the Farm Policy but agreed to provide a defense under the Umbrella 

Policy subject to a reservation of rights. On August 31, 2016, Plaintiff denied the 

Wrongful Death Action Plaintiffs’ demand. 

 On September 8, 2016, appointed counsel for the Ettens under the MKZ Policy 

tendered the $500,000 bodily injury liability limits under the policy and tendered the 

Ettens’ defense and indemnity to Plaintiff. The Ettens’ counsel then reserved their rights 

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to stipulate to a judgment with the Wrongful Death Action Plaintiffs and assign any rights 

they may have under Ann Etten’s insurance policies to them. 

 Plaintiff then filed this declaratory judgment action seeking relief under four 

counts: (1) Declaratory Judgment of No Liability Under the Family Purpose Doctrine; (2) 

Declaratory Judgment of No Coverage Under the Umbrella Policy; (3) Declaratory 

Judgment of No Coverage under the Farm Policy; and (4) Declaratory Judgment of No 

Reasonable Expectation of Coverage for Ann Etten Under the Umbrella and Farm 

Policies. (Doc. 17, Compl. ¶¶ 82-123.) 

II. LEGAL STANDARD 

Under the Declaratory Judgment Act, district courts have the “unique and 

substantial discretion” to decide whether to issue a declaratory judgment. Wilton v. Seven 

Falls Co., 515 U.S. 277 (1995). The Declaratory Judgment Act states that “courts may 

declare the rights and other legal relations of any interested party seeking such 

declaration.” 28 U.S.C. § 2201(a) (emphasis added). Accordingly, a district court is under 

no compulsion to exercise jurisdiction. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 

494 (1942). 

 Where parallel state proceedings exist, “there is a presumption that the entire suit 

should be heard in state court.” Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 

(9th Cir. 1998) (citation omitted). In such situations, Courts should avoid gratuitous 

interference as it would be uneconomical and vexatious for a federal court to proceed 

with a declaratory judgment action in these situations. Wilton, 515 U.S. at 282–83 

(citation omitted). However, the existence of a pendent state action does not 

automatically bar a request for federal declaratory relief. Chamberlain v. Allstate Ins. 

Co., 931 F.2d 1361, 1367 (9th Cir. 1991). Courts consider several factors in determining 

whether to exercise jurisdiction or dismiss or stay the declaratory judgment proceeding. 

These factors include the need to: (1) avoid unnecessary determination of state law 

issues; (2) discourage litigants from filing declaratory actions in an attempt to forum 

shop; and (3) avoid duplicative litigation. Dizol, 133 F.3d at 1225; Chamberlain, 931 

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F.2d at 1367. In addition to the foregoing factors, the Ninth Circuit has adopted the 

following additional considerations: 

[W]hether the declaratory action will settle all aspects of the controversy; 

whether the declaratory action will serve a useful purpose in clarifying the 

legal relations at issue; whether the declaratory action is being sought 

merely for the purposes of procedural fencing or to obtain a ‘res judicata’ 

advantage; or whether the use of a declaratory action will result in 

entanglement between the federal and state court systems. In addition, the 

district court might also consider the convenience of the parties, and the 

availability and relative convenience of other remedies. 

Dizol, 133 F.3d at 1225 n.5 (citation omitted). 

 When declining to exercise jurisdiction, the district court is “authorized . . . to stay 

or dismiss” the action. Wilton, 515 U.S. at 288. 

III. ANALYSIS 

While the Court is tasked with considering several factors in making its 

determination, the briefs focus on two primary points: (1) a presumption in favor of or 

against exercising jurisdiction, and (2) duplicative litigation and entanglement with state 

law issues. 

 A. Presumption in Favor of or Against Review 

 At the outset, the parties present contravening arguments as to whether a 

presumption in favor of exercising jurisdiction exists. (Resp. at 5-7; Reply at 6-7.) Not 

only do Defendants assert that the applicable presumption does not apply, they contend 

that there is a presumption against exercising jurisdiction. (Mot. at 6-7.) Both parties 

provide ample precedent supporting their arguments,1

 but, at bottom, none of the case law 

is wholly analogous or controlling. 

 Plaintiff argues that, under Dizol, there is a general rule against declining to 

entertain a claim for declaratory relief and that district courts instead have “virtually 

 

1

 Plaintiff and Defendants each list exhaustive string cites to multiple opinions from this District with divergent results. (Mot. at 9; Resp. at 12-13.) When courts’ 

analysis is largely discretionary, such contradictory results are unsurprising and, indeed, expected. 

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unflagging obligation to exercise the jurisdiction given to them” in such circumstances. 

(Resp. at 7-8 (citing Chamberlain, 931 F.2d at 1366).) However, under Dizol, “the 

Brillhart factors remain the philosophic touchstone for the district court” and the district 

court “is in the best position to assess how judicial economy, comity and federalism are 

affected in a given case.” 133 F.3d at 1225. Further, Plaintiff bases much of its argument 

on compulsory counterclaims that Defendants have purportedly threatened to bring—bad 

faith and breach of contract. (Resp. at 8.) Plaintiff is correct that such claims generally 

militate strongly against declining to exercise jurisdiction. See Dizol, 133 F.3d at 1225 

(“when other claims are joined with an action for declaratory relief (e.g., bad faith, breach 

of contract, breach of fiduciary duty, rescission, or claims for other monetary relief), the 

district court should not, as a general rule, remand or decline to entertain the claim for 

declaratory relief”). However, Defendants have not asserted such claims. While 

undeniably frustrating—both to the Court and Plaintiff—were Defendants to raise these 

claims at the state level only for the action to be removed to federal court, Defendants 

correctly state that the Court can only analyze and rule based on the action before it. At 

present, Defendants have not asserted those claims and the Court is required to judge the 

matter based on its current composition, not how it might be positioned in the future. 

 Defendants, on the other hand, cite to a similar case from this District for the 

proposition that the Court should begin with a presumption against exercising 

jurisdiction. (Mot. at 6-7 (citing Riverport Ins. Co. v. Horizon Human Servs., Inc., No. 

CV-15-00704, 2015 WL 7351670 (D. Ariz. Nov. 20, 2015).) Plaintiff provides little 

response regarding Riverport, and while the case is not precisely analogous or 

controlling. The Court nonetheless is persuaded by its reasoning. 

 Initially, the Court notes there is no general presumption in favor of declining 

jurisdiction. Dizol, 133 F.3d at 1225. However, in Riverport, the court found that 

although the party seeking a declaratory action was not a party to the underlying tort, the 

proceedings were “sufficiently parallel” to justify declining to exercise jurisdiction. Id. at 

*3. The court reasoned that both suits arose from the same set of facts and thus began its 

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analysis with a “presumption against exercising jurisdiction.” Id. That reasoning applies 

equally here. While there are aspects of the declaratory action that are not currently at 

issue in the Wrongful Death Action—mainly those found in Counts II-IV concerning the 

language of the insurance policies—both actions nonetheless arise from the MKZ’s 

collision with two cyclists. Further, the inquiry as to Ann Etten’s vicarious liability is at 

issue in the Wrongful Death Action. Accordingly, this Court begins its analysis with a 

presumption against exercising jurisdiction in this case. 

B. Duplicative Litigation and Entanglement 

 Defendants move to dismiss Plaintiff’s action primarily because it is “entwined 

with the Wrongful Death Action in big ways and small.” (Mot. at 4.) Specifically, 

Defendants argue that the determination of Ann Etten’s vicarious liability, or lack 

thereof, is based solely on the Family Purpose Doctrine—which is purely Arizona state 

law. (Mot. at 4-5.) Defendants also argue that the remaining claims require the Court to 

compare facts of the Wrongful Death Action with the coverage afforded by the at-issue 

insurance policies and should be heard as part of the broader controversy in state court. 

(Mot. at 6-9.) For the reasons that follow, the Court agrees. 

 First and foremost, Count I of Plaintiff’s declaratory action asks the Court to find 

that the Wrongful Death Action Plaintiffs, in the Wrongful Death Action itself, “cannot 

establish liability against Ann Etten under the Family Purpose Doctrine under Arizona 

law according to the Arizona Supreme Court . . . .” (Compl. ¶ 84.) This request alone 

requires the Court to examine Arizona law, make a determination under that law, and 

then—apparently—rule that the Wrongful Death Action Plaintiffs cannot establish a key 

point of liability in a state court action. On its face, the Complaint asks the Court to 

intrude on the Mohave County Superior Court proceedings. Moreover, the Court cannot 

make such a binding ruling on those proceedings—despite Plaintiff’s request—leaving 

the Mohave County Superior Court free to make its own decision, which may be 

redundant or contradictory. See Empire Fire & Marine Ins. Co. v. Bittermann-Halbreich, 

No. CV-07-675-PCT-MHM, 2008 WL 4183075, at *3 (D. Ariz. Sept. 8, 2008) (noting 

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that duplicative insurance litigation at the state and federal level risks inconsistent 

judgments). The requested entanglement is both needless and duplicative. See, e.g., id.

(finding that “any determination of state law issues in this case is needless in light of the 

state court forum in which these legal issues can and will be resolved”) (emphasis in 

original); Riverport, 2015 WL 7351670, *4 (“The mere possibility of duplicative 

litigation, however remote, weighs in favor of abstention.”). 

 Second, the remaining counts—which do not similarly offend notions of 

duplication and entanglement—should still be determined in state court. In determining 

the coverage issues in Counts II-IV, the Court would need to compare the facts present in 

the underlying Wrongful Death Action with the coverage provided by the Farm and 

Umbrella policies. In declining to exercise jurisdiction, the Mohave County Superior 

Court may need to analyze those policies where they would not have previously been 

required to. However, that court will have familiarity with the Wrongful Death Action 

facts and how they affect the policies. Thus, while the coverage determinations under 

Minnesota law do not involve the identical state law issues, the state court remains better 

positioned to determine the insurance coverage matter in conjunction with the Wrongful 

Death Action.2

 This is particularly true where the instant action “involves insurance law, 

an area that Congress has expressly left to the states. . . .” Continental Cas. Co. v. Robsac 

Indus., 947 F.2d 1367, 1371 (9th Cir.1991) (citing 15 U.S.C. §§ 1011-12). Moreover, 

where “the sole basis of jurisdiction is diversity of citizenship, the federal interest is at its 

nadir.” Id. 

C. Other Factors 

 The Court also finds that the remaining factors outlined in Dizol are neutral or 

weigh in favor of dismissal. Dizol, 133 F.3d at 1225 n.5. First, resolution of the federal 

action would not settle all aspects of the controversy and the underlying state action 

would remain. Second, the availability and convenience of other remedies do not counsel 

 

2

 Plaintiff’s disparagement of the merits of Defendants’ reasonable expectations claim (Resp. at 6-7) and Defendants’ justification of the same (Reply at 7-9) are irrelevant to the Court’s current determination and are not weighed or analyzed here. 

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against dismissal. Indeed, underlining much of Plaintiff’s Response is a singular false 

premise: that this Court is better suited to interpret Minnesota law than the Mohave 

County Superior Court. (Resp. at 7, 11.) In so arguing, Plaintiff avers that forcing the 

state court to interpret Minnesota law would preclude “satisfactory adjudication.” (Resp. 

at 7.) It is accurate, as Plaintiff states, that federal district courts often hear cases 

involving diverse parties, but there is no maxim stating that this Court can better interpret 

the law of another state than its state counterpart.3

 Plaintiff’s lack of citation to any 

precedent that directs otherwise is unsurprising. Third, while some clarification would be 

gained by resolution of this action, it is outweighed by concerns of “judicial 

administration, comity, and fairness to litigants.” Chamberlain, 931 F.2d 1361. 

 Finally, though only briefly discussed by the parties, Plaintiff appears to be forum 

shopping. Not only does Plaintiff contend that its arguments cannot be “satisfactorily”—a 

term that Plaintiff uses subjectively to describe the possible result, rather than the 

availability of an outcome—adjudicated at the state level, it asserts that this Court is 

“well-versed in diversity matters involving interpretation of extra-jurisdictional insurance 

law.” (Resp. at 12.) In other words, Plaintiff admits that both courts are capable of 

hearing its case, but prefers one over the other. This is forum shopping. 

IV. CONCLUSION 

The decision whether to retain jurisdiction is a “responsibility that district courts 

are duty-bound to take seriously.” Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001 (9th 

Cir. 1997). The Court has done so and found that the reasons to decline to exercise 

jurisdiction are plentiful and convincing. Still, Plaintiff is not precluded from filing its 

declaratory action in Mohave County Superior Court. See A.R.S. § 12-1832. As 

 

3

 Plaintiff quotes Chamberlain for the proposition that allowing the Mohave County Superior Court to interpret Minnesota law would cause “doubts and confusion to 

one inexpert in the law of that State.” 931 F.2d at 1367. However, that quote recognizes the difficulty that “federal district courts would have in ruling on complex state law issues[.]” Id. (emphasis added). Accordingly, the apprehensions regarding courts’ abilities to interpret the laws of other states are identical in the Mohave County Superior Court and the District of Arizona and allowing the current declaratory action to continue does nothing to allay those concerns. 

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Defendants point out, the Mohave County Superior Court could then combine the 

declaratory judgment action with the Wrongful Death Action, eliminating duplicative 

proceedings and facilitating the efficient administration of each. (Mot. at 7-8.) 

 IT IS THEREFORE ORDERED granting Defendants’ Motion to Dismiss 

(Doc. 22). 

IT IS FURTHER ORDERED directing the Clerk of Court to enter final 

judgment accordingly and close this action. 

 Dated this 25th day of January, 2017. 

Honorable John J. Tuchi

United States District Judge 

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