Court Opinion

ID: 9442317
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:43:47.888249+00
Date Added: 2024-06-11T17:29:03.662794
License: Public Domain

HUXMAN, Circuit Judge,
Special Concurring.
I concur in Chief Judge PHILLIPS’ conclusions that there was a justiciable controversy between the Insurance Company and Harvey which prevented his alignment with it as a party plaintiff, and that the court, therefore, had jurisdiction to adjudicate the controversy as to liability within the coverage of the policy between it and Collier, as well as between it and Harvey. My conclusion that there was a justiciable controversy between the Company and Harvey is predicated solely on the ground of the allegations of the complaint and Harvey’s answer as to the giving or failure to give timely notice of the accident, and that such allegations stated a justiciable controversy as to the Company’s liability to defend Collier’s action in the state court.
It is clear to me that the trial court, although having jurisdiction, should have declined to exercise it. ' In Excess Insurance Company of America v. Brillhart, 10 Cir., 121 F.2d 776, we held in line with other courts that a sound exercise of discretion will warrant a federal court in refraining from exercising its jurisdiction under the Declaratory Judgment Act, 28 U.S.C.A. §§ 2201, 2202. In fact, I think it may well be said that the exercise of a sound discretion will require a federal court in certain instances to refrain from exercising its jurisdiction, and that failing to do so in such cases constitutes an *670abuse of discretion. This subject with regard to declaratory judgment actions by insurance companies is fully explored by the Fourth Circuit in Maryland Casualty Company v. Boyle Construction Company, 123 F.2d 558, and what is said there has my full concurrence.
Here, there was an action pending in the state court between two parties, Collier and Harvey, with whom the insurance company had a controversy concerning its liability under the policy. It could have entered that court and had a complete, speedy and final adjudication of every question it raised in this action. Due regard under the principle of comity of the rights of a coordinate, independent judicial system, which has acquired jurisdiction of a controversy to be permitted to adjudicate the same, should compel a third party, asserting an interest in the controversy against the two parties thereto, to enter that jurisdiction and there assert its rights. To permit the practice indulged in by the Insurance Company in this case, will result in a removal from the state courts to the federal courts of all cases properly filed therein by citizens of the same state in which there is a foreign insurance company, through the device of filing a declaratory judgment action in the Federal Court. This was never, in my opinion, the purpose of the Declaratory Judgment Act. If it becomes the accepted standard of procedure, as it no doubt will under this decision, it is quite likely that Congress will, as it should, take steps to limit federal jurisdiction in such cases. It is only where no action is pending in a state court, in which a complete adjudication could be had, that an insurance company should be permitted to select the federal court under the Declaratory Judgment Act as the forum in which to litigate such questions. To permit it to do so where there is an action pending in the state court, in my opinion, constitutes an abuse of discretion. We have the inherent power in the absence of any objection below to note error in the first instance if, in our opinion, it is of sufficient gravity to warrant doing so. While no objection was made in the court below to the exercise of the court’s jurisdiction on this ground, I think the error is of sufficient gravity that we might well note it in the first instance, but since neither of my associates will join me in this, and in the interest of obtaining a decision of the case, I join in Chief Judge Phillip’s conclusion that the court had jurisdiction under the Declaratory Judgment Act to adjudicate the question of coverage not only between it and Harvey, but also between it and Collier, and content myself with setting forth my own views.