Court Opinion

ID: 4238512
Source: CourtListenerOpinion
Date Created: 2018-01-23 18:00:20.215079+00
Date Added: 2024-06-11T07:48:02.935636
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                               ________________

                                       No. 17-2265

                        ESURANCE INSURANCE COMPANY,
                                            Appellant

                                             v.

                        LAVADA BOWSER; CAROL HARVEY

                                   ________________

                       Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                         (D.C. Civil Action No. 2-16-cv-05739)
                        District Judge: Honorable J. Curtis Joyner
                                    ________________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                  January 18, 2018

    Before: SMITH, Chief Judge, GREENAWAY, JR., and KRAUSE, Circuit Judges

                            (Opinion filed: January 23, 2018)

                                       OPINION *
                                   ________________

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
KRAUSE, Circuit Judge.

          After Appellant Esurance Insurance Company (“Esurance”) sought a declaratory

judgment in the District Court that it has no duty to defend two of its policyholders in a

state court tort action, the District Court declined to exercise jurisdiction and dismissed

the action on the ground that the underlying state action was a “parallel proceeding” to

which the federal courts should defer in the interests of comity and efficiency, under

Reifer v. Westport Insurance Corp., 751 F.3d 129, 146 (3d Cir. 2014). While Esurance

raises compelling arguments as to why the state tort action is not “parallel” to a federal

coverage action, we need not resolve that issue because following the District Court’s

order, Esurance filed an action in state court seeking a declaration on its duty to defend—

an action that unquestionably does qualify as a parallel proceeding. We therefore will

affirm the order of the District Court.

I.        Background

          In 2015, Esurance issued a homeowner’s insurance policy to Appellee Lavada

Bowser. When Bowser and Carol Harvey were then sued for negligence, assault and

battery, and child endangerment concerning foster children in their care, Esurance

assumed defense of those claims in state court with a reservation of rights and also filed

suit in federal court under the Declaratory Judgment Act, 28 U.S.C § 2201, seeking a

declaration that it had no duty to indemnify these policyholders in the underlying state

action.

          On March 17, 2017, the District Court issued an order declining to exercise

jurisdiction over the action and dismissing it “without prejudice to Plaintiff’s ability to

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seek a declaration in state court.” App. 4-5. It then denied Esurance’s motion for

reconsideration, primarily on the ground that the underlying state tort litigation

constituted a proceeding “parallel” to the federal declaratory action, and the existence of

such a ‘proceeding “‘militate[d] significantly’ in favor of declining jurisdiction,” under

our precedent. App. 9 (citations omitted). Esurance timely appeals. 1

II.    Discussion

       As a general matter, the Declaratory Judgment Act authorizes district courts to

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

declaration,” 28 U.S.C. § 2201(a), but in Reifer v. Westport Insurance Corp., we

identified a number of factors district courts should consider in determining whether to

exercise jurisdiction, emphasizing “a general policy of restraint when the same issues are

pending in a state court” and the “avoidance of duplicative litigation,” 751 F.3d at 145-

46. In the interest of comity, we explained, the district court must inquire whether there

are “pending parallel state proceedings,” id. at 145; if there are, the district court should

decline to exercise jurisdiction unless “the existence of [such] . . . proceedings is

outweighed by opposing factors,” id. We review a district court’s decision to decline

jurisdiction for abuse of discretion. Id. at 146.

       Esurance argues that the District Court erred in deeming the underlying state tort

action a parallel proceeding because it involves different claims and different parties, and

thus does not present an “opportunity for ventilation” of the insurance coverage claim at

issue in the federal declaratory judgment action. Appellant’s Br. 12 (quoting Wilton v.

       1
           This matter was submitted on Appellant’s brief only.
                                               3
Seven Falls Co., 515 U.S. 277, 290 (1995)). Esurance’s arguments have force, but we

need not resolve the issue because pending this appeal, Esurance did file a declaratory

judgment action in state court seeking the same coverage declaration it sought in the

District Court, Esurance v. Bowser et al., No. 1707-0592 (Phila. Ct. C.P. June 7, 2017). 2

There is no doubt that action constitutes a “parallel state proceeding,” and “[i]t is

irrelevant that the state declaratory judgment petition was filed after its counterpart” in

federal court, State Auto Ins. Co. v. Summy, 234 F.3d 131, 136 (3d Cir. 2000). In view of

the now-pending parallel proceeding, which “militates significantly in favor of declining

jurisdiction,” Reifer, 751 F.3d at 144-45, we will affirm on that alternate ground. 3

       2
       We take judicial notice of Esurance’s subsequently filed state court declaratory
judgment action. See Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007).
       3
        While we could remand, the interest of judicial efficiency counsels against doing
so where, as here, the issue is a purely legal one and its proper resolution is apparent. See
Susquehanna Valley All. v. Three Mile Island Nuclear Reactor, 619 F.2d 231, 239 (3d
Cir. 1980).

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