Court Opinion

ID: 57902
Source: CourtListenerOpinion
Date Created: 2010-04-26 02:19:25+00
Date Added: 2024-06-11T17:19:40.938339
License: Public Domain

[DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS
                                                              FILED
                  FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                    ________________________ ELEVENTH CIRCUIT
                                                          DEC 19, 2007
                           No. 06-16309                 THOMAS K. KAHN
                     ________________________               CLERK

              D. C. Docket No. 05-01852-CV-T-17-TBM

PENN MILLERS INSURANCE COMPANY,

                                                           Plaintiff-Counter
                                                       Defendant-Appellant,

                                versus

AG-MART PRODUCE INC.,

                                                         Defendant-Counter
                                                         Claimant-Appellee,

JAMES A. SOLITO
GAIL D. MILLER,

                                                      Defendants-Appellees.

                     ________________________

              Appeal from the United States District Court
                  for the Middle District of Florida
                   _________________________

                         (December 19, 2007)
Before EDMONDSON, Chief Judge, DUBINA, Circuit Judge, and STORY,*
District Judge.

PER CURIAM:

       Appellant Penn Millers Insurance Company (“Penn Millers”) appeals the

dismissal of its declaratory judgment action, in which it sought a declaration of its

duty to indemnify its insured, Appellee AG-Mart Produce, Inc. (“AG-Mart”), for

punitive damages liability. Because we conclude that the district court did not

abuse its discretion, we affirm.

       A related consolidated tort action is currently before Florida’s 20th Circuit

Court and has been active since the middle of 2003. The plaintiffs in that case

brought suit against AG-Mart and its employee, Frederick Parr, for injuries

sustained in an automobile accident. The plaintiffs were injured by an AG-Mart

automobile driven by Parr, who was allegedly drunk and speeding at the time of

the collision. AG-Mart is insured by Penn Millers, and Penn Millers is defending

AG-Mart and Parr in the state court action. Penn Millers brought suit in federal

court seeking a declaratory judgment that it has no obligation under Florida law to

indemnify AG-Mart for any punitive damages liability sustained in the state court

action. Defendants in the declaratory judgment action, AG-Mart and the personal

       *
        Honorable Richard W. Story, United States District Judge for the Northern District of
Georgia, sitting by designation.

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injury plaintiffs, moved the district court below to dismiss or abate the complaint

filed by Penn Millers, asserting that the matter did not belong in federal court at

this time.

       We review the district court’s dismissal of the declaratory judgment action

for abuse of discretion. Wilton v. Seven Falls Co., 515 U.S. 277, 289-90 (1995).

The Declaratory Judgment Act (“the Act”) is “an enabling Act, which confers a

discretion on courts rather than an absolute right upon the litigant.” Wilton, 515
U.S. at 287 (citations omitted). It gives federal courts the ability to make a

declaration of rights, but it does not impose a duty to do so. Brillhart v. Excess Ins.

Co. of Am., 316 U.S. 491, 494 (1942). Under the Act, district courts have “unique

and substantial discretion” to decide whether to take action and declare the rights

of interested parties. Wilton, 515 U.S. at 283. Indeed, the Supreme Court has

cautioned that in certain cases, “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.” Id. at 495. In addition, we have provided guidance for

district courts, listing several factors to be considered in balancing these competing

interests: “(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

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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 trial 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.” Ameritas

Variable Life Ins. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005).

       Here, the district court carefully considered the relevant Ameritas factors

and determined that public policy and practical considerations weighed in favor of

dismissing the declaratory judgment action. We find no abuse of discretion in this

determination. “Under an abuse of discretion standard, we will leave undisturbed a

district court’s ruling unless we find that the district court has made a clear error of

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judgment, or has applied the wrong legal standard,” and we find no such error here.

Ameritas, 411 F.3d at 1332. For this reason, we affirm the district court’s decision

to dismiss the declaratory judgment action.

      AFFIRMED.

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