1 Plaintiff’s supplemental motion to dismiss, filed on October 21, 2005 (Doc. 11), is

MOOT based upon the contents of this memorandum opinion and order.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

ST. PAUL FIRE & MARINE :

INSURANCE COMPANY,

:

Plaintiff,

:

vs. CA 05-0412-C

:

JOHNSON HOMES OF 

MERIDIAN, INC. and :

MICHELLE HAMPTON,

:

Defendants.

MEMORANDUM OPINION AND ORDER

This cause is before the Court on defendant Michelle Hampton’s motion

to dismiss or, in the alternative, motion to abstain and/or stay this declaratory

judgment action (Doc. 4), the response of St. Paul Fire & Marine Company

(hereinafter, “St. Paul”) to Hampton’s motion (Doc. 5), and the parties’ oral

arguments on October 4, 2005.1 The parties have consented to the exercise of

jurisdiction by the Magistrate Judge, pursuant to 28 U.S.C. § 636(c), for all

proceedings, including disposition of this motion. (See Doc. 9 (“In accordance

with the provisions of 28 U.S.C. 636(c) and Fed.R.Civ.P. 73, the parties in this

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 1 of 23
2 Any appeal from this memorandum opinion and order and judgment must be made to

the Eleventh Circuit Court of Appeals. (See Doc. 9 (“An appeal from a judgment entered by a

Magistrate Judge shall be taken directly to the United States Court of Appeals for this judicial circuit in

the same manner as an appeal from any other judgment of this district court.”))

2

case consent to have a United States Magistrate Judge conduct any and all

proceedings in this case, including the trial, and order the entry of a final

judgment, and conduct all post-judgment proceedings.”); Doc. 10 (order of

reference made by Chief United States District Judge Callie V.S. Granade on

October 20, 2005)) Upon consideration of the contents of the briefs and the

arguments of counsel, the Court DENIES Michelle Hampton’s motion to

dismiss for want of subject-matter jurisdiction but GRANTS her alternative

request to abstain from deciding this declaratory judgment action in favor of the

parallel state action presently pending in the Circuit Court of Choctaw County,

Alabama. In line with the district court’s determination in Ameritas Variable

Life Ins. Co. v. Roach, 411 F.3d 1328, 1329 & 1332 (11th Cir. 2005), this

Court ORDERS that the instant declaratory judgment action be DISMISSED

in favor of the parallel state action presently pending in the Choctaw County

Circuit Court.2

FINDINGS OF FACT

1. On July 7, 1999, Michelle Hampton filed suit in the Circuit Court

of Choctaw County, Alabama against Johnson Mobile Homes and Chandeleur

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 2 of 23
3

Homes. (Doc. 4, Exhibit A, COMPLAINT) The ad damnum clause of the

complaint read as follows: “WHEREFORE, Plaintiff hereby demands

$74,000.00 from Defendants. Plaintiff does not seek nor will she accept more

than $74,000.00.” (Id. at 6) 

2. On October 13, 2000, Chandeleur Homes, Inc. filed a motion to

compel arbitration. (See Doc. 4, Exhibit B) Some four days later, on October

17, 2000, Johnson Mobile Homes commenced a Chapter 11 proceeding in the

United States Bankruptcy Court for the Southern District of Mississippi by the

filing of a voluntary petition for bankruptcy. (See Doc. 4, Exhibit C, ¶ 2) 

3. On February 1, 2001, Hampton and others filed motions to lift the

stay and for adequate protection. (See Doc. 4, Exhibit C) United States

Bankruptcy Judge Edward R. Gaines entered an order on June 20, 2001, granting

the motions to lift the stay. (Doc. 4, Exhibit D, ORDER (“The movants are

entitled to pursue their pending state court claims to determine liability.”))

4. On January 10, 2002, the Choctaw County Circuit Court granted

Chandeleur’s motion to compel arbitration and ordered Hampton to arbitrate her

claims “in accordance with the arbitration clause in the warranty for

Chandeleur.” (Doc. 4, Exhibit E) 

5. An arbitration was conducted in the Choctaw County courthouse

on July 23, 2002 by Terry L. Butts, Esquire, Arbitrator. (Doc. 4, Exhibit F) Butts

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 3 of 23
4

entered an arbitration award on March 23, 2004, same reading, in relevant part,

as follows:

The arbitrator finds for the plaintiff on the issue of breach

of contract and negligent setup of the mobile home against

Johnson Mobile Homes, Inc. After due consideration of the

testimony and the relevant law, the arbitrator finds for the

plaintiff and assess her damages at $62,095.00. Further, the costs

of this action and the expenses incurred by the plaintiff and her

counsel, including that part of the arbitrator’s fees and expenses

paid by plaintiff ($6,500.00), are taxed and ordered to be paid by

the defendant, Johnson Mobile Homes, Inc. to the plaintiff.

Plaintiff is to pay arbitrator the remaining $6,500.00 owed on

arbitration fees and expenses . . . .

(Doc. 4, Exhibit F, at 4) On March 31, 2004, the Choctaw County Circuit Court

entered an order granting Hampton’s motion to confirm the arbitration award.

(Doc. 4, Exhibit G)

6. On July 13, 2004, Hampton filed a Process of Garnishment in the

Circuit Court of Choctaw County, Alabama in an attempt to satisfy the

arbitration judgment entered in her favor. (See Doc. 4, Exhibit H) The garnishee

identified in the process of garnishment is St. Paul; the judgment amount is

listed as $62,095.00 and costs of $11,241.89 are listed, for a total of

$73,336.89. (Id.) In the writ of garnishment, Hampton requested interest on the

$73,336.89. (Id.) 

7. On August 18, 2004, St. Paul filed a motion to dismiss the

process of garnishment, arguing that garnishment was not the appropriate

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5

process for the collection of the judgment and that Hampton instead should have

filed a separate action against it and its insured, Johnson Homes. (Doc. 4,

Exhibit I) St. Paul’s motion was denied by the trial court on March 10, 2005.

(Doc. 4, Exhibit J) St. Paul filed a petition for writ of mandamus in the Alabama

Supreme Court on March 18, 2005 (Doc. 4, Exhibit K); the petition was denied

by order entered on May 4, 2005 (Doc. 4, Exhibit L). 

8. While the petition for writ of mandamus was pending, the

Choctaw County Circuit Court stayed the garnishment proceedings. (See Doc.

4, Exhibit M) On May 18, 2005, Hampton filed a motion to lift stay in the

Circuit Court of Choctaw County, Alabama (id.); St. Paul’s opposed the motion

to lift stay on May 25, 2005 (Doc. 4, Exhibit N). In its opposition, St. Paul

alternatively requested that the Choctaw County Circuit Court stay all

proceedings pending resolution of declaratory judgment proceedings. (Id.; see

also id. at 2 (“St. Paul intends to file a complaint for declaratory relief in the

United States District Court for the Southern District of Mississippi against

Johnson Homes of Meridian, Inc.[], which is St. Paul’s insured and the

Defendant in this action, disputing the amount of the insurance proceeds owed

to Johnson, if any, and which Plaintiff seeks to garnish in this proceeding. St.

Paul has not yet filed the declaratory judgment complaint because Johnson has

filed bankruptcy, and under Section 362 of the Bankruptcy Code St. Paul must

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 5 of 23
3 On June 29, 2005, United States Bankruptcy Judge Gaines granted St. Paul’s motion

for relief from stay to file a declaratory judgment action. (See Doc. 4, Exhibit U, Attached ORDER)

6

obtain relief from the bankruptcy stay before filing its declaratory judgment

action.”)) The trial court granted Hampton’s motion to lift stay on the same date

that St. Paul filed its opposition to that motion. (See Doc. 4, Exhibit O)

Accordingly, St. Paul, on June 6, 2005, filed a motion to vacate the trial court’s

order lifting the stay. (Id.) After that date, the parties each filed pleadings in the

Circuit Court of Choctaw County, Alabama during June3 and July of 2005 (Doc.

4, Exhibits P-Q & S-U) 

9. By order dated June 16, 2005, the Choctaw County Circuit Court

set St. Paul’s motion to vacate for a hearing on September 15, 2005. (Doc. 4,

Exhibit R)

10. On July 15, 2005, St. Paul filed a complaint for declaratory relief,

pursuant to 28 U.S.C. § 2201, in this Court against Johnson Homes of Meridian,

Inc. and Hampton. (Doc. 1) In the complaint, St. Paul specifically invokes this

Court’s jurisdiction pursuant to 28 U.S.C. § 1332, the diversity statute. (Id., ¶

4) Hampton filed her motion to dismiss on August 18, 2005 (Doc. 4) and this

motion was joined on August 26, 2005 (Doc. 5).

CONCLUSIONS OF LAW

A. Diversity Jurisdiction.

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 6 of 23
7

1. The “‘operation of the Declaratory Judgment Act is procedural

only[,]’” Household Bank v. JFS Group, 320 F.3d 1249, 1253 (11th Cir.

2003), quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240, 57 S.Ct.

461, 463, 81 L.Ed. 617 (1937), and, therefore, the party seeking relief under the

Act must set forth facts establishing that there is an independent basis for the

exercise of federal jurisdiction, id. (citation omitted); see also Wendy’s

International, Inc. v. City of Birmingham, 868 F.2d 433, 435 (11th Cir. 1989)

(“At the outset we note that the Declaratory Judgment Act does not enlarge the

jurisdiction of the federal courts but rather ‘is operative only in respect to

controversies which are such in the constitutional sense. . . . Thus the operation

of the Declaratory Judgment Act is procedural only.’ [] Consequently, a party

seeking declaratory relief must satisfy the same jurisdictional requirements

prerequisite to the bringing of other suits.”). Accordingly, in its complaint for

declaratory relief St. Paul avers that jurisdiction is proper is this Court based

upon the diversity statute, 28 U.S.C. § 1332. (Doc. 1, ¶ 4)

2. “‘Federal courts are courts of limited jurisdiction.’” Federated

Mut. Ins. Co. v. McKinnion Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003),

quoting Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). In

order for a federal court to exercise diversity jurisdiction, the amount in

controversy must exceed $75,000, exclusive of interest and costs, and the

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 7 of 23
8

action must be between citizens of different states. 28 U.S.C. § 1332(a)(1). In

a declaratory judgment action, “‘the amount in controversy is the monetary value

of the object of the litigation from the plaintiff’s perspective.’” Federated Mut.

Ins. Co., supra, quoting Cohen v. Office Depot, Inc., 204 F.3d 1069, 1077

(11th Cir. 2000); see also Employers Mut. Cas. Co. v. All Seasons Window &

Door Manufacturing, Inc., 2005 WL 2205345, *2 (S.D.Ala. 2005) (“‘When a

plaintiff seeks injunctive or declaratory relief, the amount in controversy is the

monetary value of the object of the litigation from the plaintiff’s perspective.’”).

3. Where it appears to a “legal certainty” that a plaintiff’s claim is

for less than the jurisdictional amount, diversity jurisdiction does not exist.

Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1472 (11th Cir. 1997) (“The

maximum remedy sought by the Baltins was the vacatur of the arbitration award

of $36,284.69. Diversity jurisdiction did not exist because it was a ‘legal

certainty’ that the amount in controversy was less than $50,000, the amount

required for federal diversity jurisdiction at the time the Baltins filed suit.”),

cert. denied, 525 U.S. 841, 119 S.Ct. 105, 142 L.Ed.2d 84 (1998); see also

Federated Mut. Ins. Co., supra, 329 F.3d at 807 (“Generally, ‘[i]t must appear

to a legal certainty that the claim is really for less than the jurisdictional amount

to justify dismissal.’”); Owners Ins. Co. v. James, 295 F.Supp.2d 1354, 1358

(N.D.Ga. 2003) (“Dismissal of a case brought under 28 U.S.C. § 1332 is proper

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 8 of 23
9

where the pleadings make it clear to a legal certainty that the claim is really for

less than the jurisdictional amount.”).

Generally speaking, the judicially established legalcertainty test makes it very difficult for a defendant to secure a

dismissal of a case on the ground that it does not appear to satisfy

the statutory jurisdictional amount requirement. Only three

situations clearly meet the legal-certainty standard for purposes

of defeating the court’s subject matter jurisdiction: (1) when the

terms of a contract limit the plaintiff’s possible recovery; (2)

when a specific rule of substantive law or measure of damages

limits the amount of money recoverable by the plaintiff; and (3)

when independent facts show that the amount of damages was

claimed by the plaintiff merely to obtain federal court

jurisdiction.

Owners Ins. Co., supra, 295 F.Supp.2d at 1358-1359 (internal citations

omitted).

4. It is clear to the Court in this case that the value of the object of

the litigation from St. Paul’s perspective is the value to it of a declaration that

it does not have to indemnify Hampton with respect to any claims asserted

against Johnson Homes of Meridian, Inc. in the underlying lawsuit. In point of

fact, there are two underlying actions. With respect to the first, Hampton

successfully arbitrated her claims against Johnson; the arbitrator assessed

damages in favor of Hampton and against Johnson totaling $62,095.00 for

Johnson’s breach of contract and negligent setup along with costs and expenses

incurred by plaintiff. The arbitrator’s award was reduced to a judgment by the

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 9 of 23
4

“Garnishment is a statutory action, and can result only in a judgment against the

garnishee, or in a judgment discharging him.” Randolph v. Little, 62 Ala. 396, 1878 WL 1186, at *2

(Ala. 1878).

10

Circuit Court of Choctaw County, Alabama by order dated March 31, 2004.

Thereafter, Hampton filed an ancillary garnishment proceeding in the Choctaw

County Circuit Court on July 13, 2004.4 The affidavit in support of the writ of

garnishment filed by Hampton is signed by her attorney and reflects the

judgment amount to be $62,095.00 and costs of $11,241.69, for a total claimed

of $73,336.69 with interest. Hampton’s attorney admitted during oral argument

that the interest requested in the writ of garnishment is the amount provided by

statute on judgments received, that is, 12% interest. See Ala.Code § 8-8-10

(“Judgments for the payment of money, other than costs, if based upon a

contract action, bear interest from the day of the cause of action, at the same

rate of interest as stated in said contract; all other judgments shall bear interest

at the rate of 12 percent per annum, the provisions of Section 8-8-1 to the

contrary notwithstanding; provided, that fees allowed a trustee, executor,

administrator, or attorney and taxed as part of the cost of the proceeding shall

bear interest at a like rate from the day of entry.”). Inasmuch as Alabama

requires by statute that a plaintiff’s attorney must make and file with the clerk

of the court in which the judgment was entered an affidavit stating the amount

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 10 of 23
11

due from the defendant, or his assignee, in order to obtain a writ of garnishment,

Ala.Code § 6-6-391, and the affidavit in this case requested $73,336.69 plus

interest, and interest has accrued at the rate of 12% per annum since March 31,

2004, this Court cannot find to a legal certainty that the claim at issue in this

declaratory judgment action is really for less than the jurisdictional amount.

Hollingsworth & Co. v. Hammond, 30 Ala. 668, 1857 WL 443, *1 (Ala. 1857)

(“We think the doctrine must be regarded as settled in this State, that wherever

a debt or money liability exists, as contradistinguished from mere damages for

the breach of a contract, interest is recoverable as an incident to such debt, from

the time of its maturity.”); see Jim Davis & Co. v. Albuquerque Fed. Savings

& Loan Ass’n, 536 So.2d 55, 57 (Ala. 1988) (“Under the law of garnishment,

the money sought ‘must be due absolutely and without contingency.’”). In other

words, the Court finds that interest is an essential ingredient of Hampton’s

garnishment claim against St. Paul, “rather than a mere accessory demand,” and

therefore, such interest does not fall within the statutory exclusion contained

in 28 U.S.C. § 1332(a) and can be included as part of the amount in controversy.

14B C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND

PROCEDURE § 3712(1998); see also id. at p. 282 (“Finally, there is the

situation, typified by Brown v. Webster itself, in which the interest is regarded

as merely one of the elements of damage and is considered a part of the amount

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 11 of 23
12

in controversy. For example, in a suit against a surety to recover on a

supersedeas bond, by which the surety was bound to pay the judgment, interest,

and costs, the amount in controversy is the whole sum due from the surety, since

interest was an element in calculating the obligation of the bond. Interest also

may be included when it can be considered a penalty and therefore a damage

element. Illustratively, if the judgment in one action includes interest, the

amount in controversy in a suit on the judgment is measured by the amount of

that first judgment, including the interest.”).

5. In light of the foregoing, this Court may exercise diversity

jurisdiction in this declaratory judgment action. St. Paul’s jurisdictional victory

is only pyrrhic, however, as this Court finds that it need abstain from ruling upon

the merits presented by this declaratory judgment action in favor of the parallel

action pending in the Circuit Court of Choctaw County, Alabama.

B. Abstention.

6. While Hampton makes mention, in her brief, of Brillhart v.

Excess Ins. Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620

(1942), Wilton v. Seven Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d

214 (1995), and Ameritas Variable Life Ins. Co. v. Roach, supra, in relation to

her discussion of the Declaratory Judgment Act, she quickly shifts focus and

concentrates her abstention arguments on “the Colorado Abstention Doctrine.”

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 12 of 23
13

(Doc. 4, at 7-12) Not surprisingly, in response, St. Paul concentrates solely

upon the Colorado River “exceptional” circumstances test, turning a blind eye

to Brillhart, Wilton, and Ameritas Variable Life Ins. Co. (Doc. 5, at 3-8)

Though this Court will initially begin with the Colorado River decision and

note, albeit parenthetically, why abstention is proper even under the

“exceptional” circumstances test, the focus of this Court’s analysis falls

properly upon Brillhart, Wilton, and Ameritas Variable Life Ins. Co.

7. “Colorado River addresses the circumstances in which federal

courts should abstain from exercising their jurisdiction because a parallel

lawsuit is proceeding in one or more state courts.” Ambrosia Coal &

Construction Co. v. Pages Morales, 368 F.3d 1320, 1327 (11th Cir. 2004).

The Court [in Colorado River] found that abstention was

not appropriate under the traditional abstention doctrines, which

involve “considerations of proper constitutional adjudication and

regard for federal-state relations[.]” Nevertheless, the Supreme

Court acknowledged that principles other than these traditional

abstention doctrines might permit federal courts to abstain from

exercising otherwise proper jurisdiction “in situations involving

the contemporaneous exercise of concurrent jurisdictions[.]”

“These principles[,]” the Court explained, “rest on considerations

of wise judicial administration, giving regard to conservation of

judicial resources and comprehensive disposition of litigation.”

For example, when multiple federal district courts might

contemporaneously litigate concurrent jurisdictions, although “no

precise rule has evolved, the general principle is to avoid

duplicative litigation.”

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 13 of 23
14

This general principle does not apply, however, when the

duplicative litigation arises between state and federal courts. As

the Supreme Court recognized, “[g]enerally, as between state and

federal courts, the rule is that the pendency of an action in the

state court is no bar to proceedings concerning the same matter

in the Federal court having jurisdiction[.]” Federal courts have a

“virtually unflagging obligation to exercise the jurisdiction given

them.” A policy permitting federal courts to yield jurisdiction to

state courts cavalierly would betray this obligation. Thus, federal

courts can abstain to avoid duplicative litigation with state courts

only in “exceptional” circumstances.

Without fashioning a bright-line test for determining when

the existence concurrent state and federal cases warrants federal

court abstention, the Supreme Court discussed several

circumstances that district courts may consider. It noted that “the

court first assuming jurisdiction over property may exercise that

jurisdiction to the exclusion of other courts.” It further remarked

that a federal court may consider “the inconvenience of the

federal forum, the desirability of avoiding piecemeal litigation,

and the order in which jurisdiction was obtained by the concurrent

forums.” Finally, the Supreme Court cautioned that “[o]nly the

clearest of justifications will warrant dismissal” of the federal

court action.

Id. at 1328-1329 (internal citations, ellipses and footnote omitted).

8. In TranSouth Financial Corp. v. Bell, 149 F.3d 1292, 1294-

1295 (1998), the Eleventh Circuit summarized Moses H. Cone Memorial Hosp.

v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)

and set forth the following six factors which fall among those which a district

court should consider in determining whether exceptional circumstances exist:

“(1) the order in which the courts assumed jurisdiction over

property; (2) the relative inconvenience of the fora; (3) the order

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 14 of 23
15

in which jurisdiction was obtained and the relative progress of the

two actions; (4) the desire to avoid piecemeal litigation; (5)

whether federal law provides the rule of decision; and (6) whether

the state court will adequately protect the rights of all parties.”

Moorer v. Demopolis Waterworks & Sewer Board, 374 F.3d 994, 997 (11th

Cir. 2004), quoting TranSouth, supra; see also Wilton, supra, 515 U.S. at 285-

286, 115 S.Ct. at 2142 (“As it had in Colorado River, the Court [in Moses H.

Cone] articulated nonexclusive factors relevant to the existence of such

exceptional circumstances, including the assumption by either court of

jurisdiction over a res, the relative convenience of the fora, avoidance of

piecemeal litigation, the order in which jurisdiction was obtained by the

concurrent fora, whether and to what extent federal law provides the rules of

decision on the merits, and the adequacy of state proceedings.”); Noonan South,

Inc. v. Volusia County, 841 F.2d 380, 381 (11th Cir. 1988) (“The [Supreme]

Court [in Colorado River] suggested that federal courts consider a number of

factors in determining the appropriateness of dismissal: (1) whether one of the

courts has assumed jurisdiction over property; (2) the inconvenience of the

federal forum; (3) the potential for piecemeal litigation; and (4) the order in

which the forums obtained jurisdiction. [] In Moses H. Cone . . . the Court

repeated the four factors listed in Colorado River . . . [and] mentioned two

additional factors: (5) whether federal or state law will be applied; and (6) the

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 15 of 23
5 As heretofore indicated, this Court will engage in but a brief analysis of this case in

reference to the six-factor exceptional-circumstances abstention test since the appropriate test for

abstention in this declaratory judgment action is that set out in Brillhart, Wilton and Ameritas Variable

Life Ins. Co., not the exceptional-circumstances test of Colorado River and Moses H. Cone.

Nevertheless, the Court finds it significant under the exceptional-circumstances test that federal law

does not provide any rules of decision on the merits; rather, this case will be decided solely by

reference to Alabama contract and garnishment law. Moreover, this Court is confident that the state

procedures applicable can adequately protect the rights of the parties, St. Paul making no argument to

the contrary. Finally, this case, in some form or fashion, has been pending in the Circuit Court of

Choctaw County, Alabama now for some six years. While St. Paul correctly points out that it has only

been a party with respect to the writ of garnishment filed by Hampton in July of 2004, it has known

since the institution of Hampton’s suit against Chandeleur Homes and Johnson Homes of Meridian,

Inc., St. Paul’s insured, of Hampton’s claims and, in fact, provided Johnson Homes with “defense

under reservation of rights[.]” (Doc. 1, ¶ 9) The only surprise for St. Paul was Hampton’s filing of a

writ of garnishment seeking satisfaction, from St. Paul, of the judgment she obtained against Johnson

Homes, same long being recognized by the Alabama Supreme Court as “‘an ancillary proceeding

seeking satisfaction of a prior judgment, and not an original civil suit.’” Rice v. State Farm Fire & Cas.

Co., 628 So.2d 582, 583 (Ala. 1993) (citation omitted). It is clear from St. Paul’s briefs and pleadings

filed in opposition to the garnishment proceeding that it felt garnishment was the improper vehicle for

Hampton to satisfy her judgment against Johnson Homes and that Hampton, instead, should have filed

an original civil suit against it and its insured. St. Paul filed its motion to dismiss the garnishment on

August 18, 2004, and litigated that issue all the way to the Alabama Supreme Court. As well, St. Paul

has pressed other issues in state court until filing this action in this Court on July 15, 2005, some eleven

months after requesting dismissal of the writ of garnishment in the Choctaw County Circuit Court.

16

adequacy of each forum to protect the parties’ rights.”).

The decision whether to dismiss does not rest on a mechanical

checklist, but on a careful balancing of the important factors as

they apply in a given case, with the balance heavily weighted in

favor of the exercise of jurisdiction. The weight of each factor

varies on a case-by-case basis, depending on the particularities of

that case. One factor alone can be the sole motivating reason for

the abstention. 

Moorer, supra, 374 F.3d at 997 (internal quotation marks and citations

omitted).5

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 16 of 23
Accordingly, St. Paul has not only known about, monitored and participated in the state case, by

providing a defense to Johnson Homes, since the underlying suit was instituted against Chandeleur

Homes and Johnson Homes in 1999 but also, since August of 2004, has directly participated in the

ancillary garnishment proceeding. The length of time this case has been in the Circuit Court of Choctaw

County, Alabama, when combined with the other relevant factors that federal law will provide no rules

on the decision on the merits and that Alabama’s procedures will adequately protect the rights of the

parties, speaks volumes for abstention even under the clearly inapplicable Colorado River and Moses

H. Cone exceptional-circumstances abstention doctrine. 

17

9. The Supreme Court in Wilton, supra, explained, at length, why

Brillhart informs a district court’s abstention decision in the declaratory

judgment context as well as why the exceptional circumstances test of

Colorado River and Moses H. Cone does not inform such decision. 

London Underwriters contend that the Brillhart regime, under

which district courts have substantial latitude in deciding whether

to stay or to dismiss a declaratory judgment suit in light of

pending state proceedings (and need not point to “exceptional

circumstances” to justify their actions), is an outmoded relic of

another era. We disagree. Neither Colorado River, which upheld

the dismissal of federal proceedings, nor Moses H. Cone, which

did not, dealt with actions brought under the Declaratory

Judgment Act, 28 U.S.C. § 2201(a) (1988 ed., Supp. V). Distinct

features of the Declaratory Judgment Act, we believe, justify a

standard vesting district courts with greater discretion in

declaratory judgment actions than that permitted under the

“exceptional circumstances” test of Colorado River and Moses

H. Cone. No subsequent case, in our view, has called into

question the application of the Brillhart standard to the Brillhart

facts.

Since its inception, the Declaratory Judgment Act has

been understood to confer on federal courts unique and

substantial discretion in deciding whether to declare the rights of

litigants. On its face, the statute provides that a court “may

Case 1:05-cv-00412-C Document 12 Filed 10/24/05 Page 17 of 23
18

declare the rights and other legal relations of any interested party

seeking such declaration[.]” The statute’s textual commitment to

discretion, and the breadth of leeway we have always understood

it to suggest, distinguish the declaratory judgment context from

other areas of the law in which concepts of discretion surface.

We have repeatedly characterized the Declaratory Judgment Act

as “an enabling Act, which confers a discretion on the courts

rather than an absolute right upon the litigant.” When all is said

and done, we have concluded, “the propriety of declaratory relief

in a particular case will depend upon a circumspect sense of its

fitness informed by the teachings and experience concerning the

functions and extent of federal judicial power.”

Acknowledging, as they must, the unique breadth of this

discretion to decline to enter a declaratory judgment, London

Underwriters nonetheless contend that, after Colorado River and

Moses H. Cone, district courts lack discretion to decline to hear

a declaratory judgment suit at the outset. We are not persuaded by

this distinction. London Underwriters’ argument depends on the

untenable proposition that a district court, knowing at the

commencement of litigation that it will exercise its broad

statutory discretion to decline declaratory relief, must

nonetheless go through the futile exercise of hearing a case on

the merits first. Nothing in the language of the Declaratory

Judgment Act recommends London Underwriters’ reading, and we

are unwilling to impute to Congress an intention to require such

a wasteful expenditure of judicial resources. If a district court, in

the sound exercise of its judgment, determines after a complaint

is filed that a declaratory judgment will serve no useful purpose,

it cannot be incumbent upon that court to proceed to the merits

before staying or dismissing the action.

We agree, for all practical purposes, with Professor

Borchard, who observed half a century ago that “[t]here is . . .

nothing automatic or obligatory about the assumption of

‘jurisdiction’ by a federal court” to hear a declaratory judgment

action. By the Declaratory Judgment Act, Congress sought to

place a remedial arrow in the district court’s quiver; it created an

opportunity, rather than a duty, to grant a new form of relief to

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qualifying litigants. Consistent with the nonobligatory nature of

the remedy, a district court is authorized, in the sound exercise of

its discretion, to stay or to dismiss an action seeking a

declaratory judgment before trial or after all arguments have

drawn to a close. In the declaratory judgment context, the normal

principle that federal courts should adjudicate claims within their

jurisdiction yields to considerations of practicality and wise

judicial administration.

Wilton, supra, 515 U.S. at 286-288, 115 S.Ct. at 2142-2143 (internal footnote

omitted and internal citations omitted unless included).

10. In Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 62 S.Ct.

1173, 86 L.Ed. 1620 (1942), “[a]n insurer, anticipating a coercive suit, sought

a declaration in federal court of nonliability on an insurance policy. The District

Court dismissed the action in favor of pending state garnishment proceedings,

to which the insurer had been added as a defendant.” Wilton, supra, 515 U.S. at

282, 115 S.Ct. at 2140. Brillhart is virtually identical to this action except for

the fact that Hampton named St. Paul as the garnishee/defendant in the ancillary

garnishment proceeding, rather than adding it as a defendant. 

[T]his Court[, in Brillhart,] held that[] “[a]lthough the District

Court had jurisdiction of the suit under the Federal Declaratory

Judgment Act, it was under no compulsion to exercise that

jurisdiction.” The Court explained that “[o]rdinarily it would be

uneconomical as well as vexatious for a federal court to proceed

in a declaratory judgment suit where another suit is pending in a

state court presenting the same issues, not governed by federal

law, between the same parties.” The question for a district court

presented with a suit under the Declaratory Judgment Act, the

Court found, is “whether the questions in controversy between the

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20

parties to the federal suit, and which are not foreclosed under the

applicable substantive law, can better be settled in the proceeding

pending in the state court.”

Brillhart makes clear that district courts possess

discretion in determining whether and when to entertain an action

under the Declaratory Judgment Act, even when the suit

otherwise satisfies subject matter jurisdictional prerequisites.

Although Brillhart did not set out an exclusive list of factors

governing the district court’s exercise of this discretion, it did

provide some useful guidance in that regard. The Court indicated,

for example, that in deciding whether to enter a stay, a district

court should examine “the scope of the pending state court

proceeding and the nature of defenses open there.” This inquiry,

in turn, entails consideration of “whether the claims of all parties

in interest can satisfactorily be adjudicated in that proceeding,

whether necessary parties have been joined, whether such parties

are amenable to process in that proceeding, etc.” Other cases, the

Court noted, might shed light on additional factors governing a

district court’s decision to stay or to dismiss a declaratory

judgment action at the outset. But Brillhart indicated that, at least

where another suit involving the same parties and presenting

opportunity for ventilation of the same state law issues is pending

in state court, a district court might be indulging in “[g]ratuitous

interference,” if it permitted the federal declaratory action to

proceed.

Wilton, supra, 515 U.S. at 282-283, 115 S.Ct.at 2140-2141 (internal citations

to Brillhart omitted). 

11. In Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331

(2005), the Eleventh Circuit recently identified a list of non-exhaustive factors

which district courts may consider before making a determination regarding

whether to abstain from a declaratory judgment action in favor of a parallel state

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21

court action:

(1) the strength of the state’s interest in having the issues raised

in the federal declaratory action decided in the state courts; (2)

whether the judgment in the federal declaratory action would

settle the controversy; (3) whether the federal declaratory action

would serve a useful purpose in clarifying the legal relations at

issue; (4) whether the declaratory remedy is being used merely

for the purpose of “procedural fencing”--that is, to provide an

arena for a race for res judicata or to achieve a federal hearing

in a case otherwise not removable; (5) whether the use of a

declaratory action would increase the friction between our

federal and state courts and improperly encroach on state

jurisdiction; (6) whether there is an alternative remedy that is

better or more effective; (7) whether the underlying factual

issues are important to an informed resolution of the case; (8)

whether the state court is in a better position to evaluate those

factual issues than is the federal court; and (9) whether there is a

close nexus between the underlying factual and legal issues and

state law and/or public policy, or whether federal common or

statutory law dictates a resolution of the declaratory judgment

action. Our list is neither absolute nor is any one factor

controlling; these are merely guideposts in furtherance of the

Supreme Court’s admonitions in Brillhart and Wilton.

Id.

12. The coverage issue, which is the focus of the instant declaratory

judgment action, is clearly a defense available to St. Paul in the ancillary

garnishment proceeding which has been the subject of litigation between it and

Ms. Hampton in the state courts of Alabama since August of 2004. Alabama

courts, which decided unanimously that a writ of garnishment is the proper

procedural vehicle for Ms. Hampton to attempt to satisfy her judgment against

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6 Obviously, therefore, no federal common or statutory law dictates a resolution of the

instant declaratory judgment action.

7 While a judgment in this action on the coverage issue would effectively settle the

controversy between Hampton and St. Paul, so too will a judgment by the Circuit Court of Choctaw

County, Alabama in the ancillary garnishment proceeding. The coverage issue is best decided by the

Alabama courts, not only because Alabama law is the only law applicable but also because the Circuit

Court of Choctaw County, Alabama has lived with the underlying proceeding since 1999 and the

ancillary proceeding the last year.

22

Johnson Homes, have a particularly strong interest in deciding the Alabama

contract issues raised in the federal declaratory action6in the state courts given

their collective decisions on the procedural vehicle question and the length of

their association with the facts surrounding the underlying action against

Johnson Homes.7 Certainly, the instant action would not serve to clarify the

legal relations at issue in a manner that cannot also be accomplished in the state

courts of Alabama. Rather, as indicated in Brillhart, where, as here, there is

pending in state court another suit involving the same relevant parties and

presenting the opportunity for ventilation of the same state law issues it would

be sheer gratuitous interference by this Court to allow the declaratory judgment

action to proceed. Stated differently, this Court finds that allowing the instant

declaratory judgment action to proceed would increase the friction between

federal and state courts and improperly encroach on state jurisdiction. It is

imperative that this Court not race the state courts to res judicata, at the behest

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23

of St. Paul, given that this case involves the application of state law and is best

decided by the state courts of Alabama. Accordingly, this Court abstains from

this declaratory judgment action in favor of the parallel proceeding in the

Circuit Court of Choctaw County, Alabama to which St. Paul has been a

litigating party since August of 2004.

CONCLUSION

The Court DENIES Michelle Hampton’s motion to dismiss this

declaratory judgment action for want of jurisdiction but GRANTS her

alternative motion to abstain from proceeding to a judgment on the merits in this

action in favor of the parallel proceeding in the Circuit Court of Choctaw

County, Alabama (Doc. 4). The Court ORDERS that the instant declaratory

judgment action be DISMISSED in favor of the parallel state action presently

pending in the Circuit Court of Choctaw County, Alabama.

DONE this the 24th day of October, 2005

 /S/WILLIAM E. CASSADY 

UNITED STATES MAGISTRATE JUDGE

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