Allstate Indem. Co. v. Hill

1

ALLSTATE INDEMNITY COMPANY, Plaintiff, v. REBECCA HILL, et al., Defendants.

No. 2:23-cv-1649-GMB

United States District Court, N.D. Alabama, Southern Division

September 19, 2024

MEMORANDUM OPINION AND ORDER

GRAY M. BORDEN UNITED STATES MAGISTRATE JUDGE

Plaintiff Allstate Indemnity Company (“Allstate”) filed this federal complaint against Rebecca Hill,^[1] Darryl Hill, and Brandon Hill seeking a declaratory judgment on the scope of coverage for a homeowners' liability policy. Doc. 1. Because there is a pending state-court action relating to the same underlying incident, Brandon Hill filed a motion asking the court to abstain from deciding the federal claims. Doc 11. The parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Doc. 25. The motion has been briefed (Docs. 16, 17 21) and is ripe for decision. For the reasons stated below the motion is due to be granted.^[2]

I. FACTUAL AND PROCEDURAL BACKGROUND

The underlying state-court civil action is pending in the Circuit Court of Jefferson County, Alabama. Doc. 11 at 1-2. On March 27, 2023, Brandon Hill filed suit against his father, Darryl Hill, and stepmother, Rebecca Hill, to recover damages for injuries he sustained when Darryl shot him in the leg during an altercation at Darryl and Rebecca's home. Doc. 11 at 1-2; Doc. 1-1 at 28. In the state-court complaint, Brandon alleges that he entered into a lease agreement in April 2019 allowing him to reside in their single-family home on Chesapeake Drive in Hueytown, Alabama. Doc. 1-1 at 29. At the residence one evening in March 2021, Darryl came upstairs into Brandon's living quarters, where he started an argument and threatened Brandon, but then walked back downstairs. Doc. 1-1 at 29-30. Darryl later returned to Brandon's living space, threatened him again, struck him in the head with a copper pot, and shot him in the leg with a pistol. Doc. 1-1 at 30. In disbelief, Brandon exclaimed “You shot me!” Darryl responded, “You're damn right I did.” Doc. 1-1 at 30-31. Brandon alleges that the gunshot wound shattered his femur such that he had to remain in the hospital for several days to receive medical treatment and later had multiple surgeries. Doc. 1-1 at 31.

On these facts, Brandon's state-court complaint claims that Darryl and Rebecca negligently, recklessly, or intentionally caused him damages, including physical and mental pain and suffering, loss of income and employment, permanent injury, future loss of income and employment, and future medical expenses. Doc. 11 at 32. The counts in the complaint include assault and battery, trespass, intentional infliction of emotional distress, breach of contract, negligent entrustment, negligence, gross negligence, recklessness, and wantonness. Doc. 1-1 at 33-38. Darryl responded with a counterclaim against Brandon for assault and battery, wantonness, and intentional infliction of emotional distress. Doc. 1-2 at 185.

On December 7, 2023, Allstate filed this federal action seeking a declaration of no coverage under the homeowners' liability policy insuring the Chesapeake Drive property. Doc. 1 at 1-2. Complete diversity exists since Allstate is a citizen of Illinois; Brandon, Darryl, and Rebecca are citizens of Alabama; and the amount in controversy exceeds the jurisdictional threshold. See Doc. 1 at 1-4. Allstate also requests a finding that it has no duty to defend or indemnify Darryl, Rebecca, or Brandon from the claims in the state-court case. Doc. 1 at 7.

In the federal complaint, Allstate maintains that the claims and counterclaims in the underlying action “are not covered because they do not constitute an ‘occurrence,' and they fall within exclusions for intentional expected acts and for a bodily injury claim by one insured against another insured.” Doc. 1 at 1. Allstate nevertheless has been defending Darryl and Rebecca in the underlying action under a reservation of rights, while also defending Brandon against Darryl's counterclaims under a reservation of rights. Doc. 1 at 2.

II. LEGAL STANDARD

The pending motion urges the court to exercise its discretionary authority under the Declaratory Judgment Act, 28 U.S.C. § 2201(a), to abstain from deciding the federal action.^[3] The Declaratory Judgment Act is an enabling statute that confers on the federal courts “unique and substantial discretion in deciding whether to declare the rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995). The decision to hear a declaratory judgment action thus is committed to the discretion of the district court. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942); Wilton, 515 U.S. at 282; Angora Ent., Inc. v. Condo. Assoc. of Lakeside Village, Inc., 796 F.2d 384, 387 (11th Cir. 1986). The federal courts commonly call this discretionary standard the Wilton-Brillhart abstention doctrine because of the leading Supreme Court cases. Consistent with this doctrine, district courts should avoid “[gratuitous interference with the orderly and comprehensive disposition of a state court litigation.” Brillhart, 316 U.S. at 495; see Ameritas Var. Life Ins. Co. v. Roach, 441 F.3d 1328, 1331 (11th Cir. 2005) (“[The Act] only gives the federal court competence to make a declaration of rights; it does not impose a duty to do so”).

Where there is a parallel state proceeding or another adequate remedy, the court “may properly refuse declaratory relief if the alternative remedy is better or more effective.” Angora, 796 F.2d at 387-88. However, “[n]othing in the Act suggests that a district court's discretionary authority exists only when a pending state proceeding shares substantially the same parties and issues.” First Mercury Ins. Co. v. Excellent Comp. Distrib., Inc., 648 Fed.Appx. 861, 866 (11th Cir. 2016). Even so, “the existence of a parallel state proceeding is a persuasive indicator that a court may abstain” from deciding a case. Republic Vanguard Ins. Co. v. Russell, 2021 WL 794464, at *5 (N.D. Ala. Mar. 2, 2021); see Benchmark Ins. Co. v. Sustainable Energy Solutions, Inc., 2019 WL 2720124, at *3 (M.D. Ala. June 28, 2019) (“A federal court's discretion to abstain is more pronounced when the federal and state actions are ‘parallel.'”).

In Ameritas, 411 F.3d at 1331, the Eleventh Circuit listed nine factors that should inform a federal court's decision on abstention in this context:

(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 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.

This “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.

III. DISCUSSION

Before the court is Brandon Hill's motion to abstain from deciding Allstate's declaratory judgment action. Allstate opposes the motion and argues that the Ameritas factors counsel against abstention. The court finds that the motion is due to be granted.

A. Parallel Proceedings

Strictly parallel cases are not a necessity for abstention. See Benchmark, 2019 WL 2720124, at *4. Instead, “‘when federal and state proceedings involve substantially the same parties and substantially the same issues' they are sufficiently parallel for purposes of applying the Ameritas factors.” Vanguard, 2021 WL 794464, at *5 (citing Ambrosia Coal & Const. Co. v. Pages Morales, 368 F.3d 1320, 1330 (11th Cir. 2004)); James River Ins. Co. v. Ultratec Spec. Effects, Inc., 2017 WL 2652985, at *1 (N.D. Ala. June 20, 2017) (quoting Georgia v. U.S. Army Corps of Engineers, 223 F.R.D. 691, 697 (N.D.Ga. 2004)) (“Litigation is parallel where ‘substantially the same parties are contemporaneously litigating substantially the same issues in more than one forum.'”). For this reason, in federal declaratory judgment actions relating to coverage questions, “courts look to whether the parties in federal court are, or could be, similar to the parties involved in the state proceedings.” Vanguard, 2021 WL 794464, at *6. Many district courts within the Eleventh Circuit have found sufficient parallelism between federal declaratory judgment actions and state-court liability actions even without completely identical parties. See, e.g., Am. Mod. Prop. & Cas. Ins. Co. v. Pickett, 676 F.Supp.3d 1175, 1183 (S.D. Ala. 2023); Wesco Ins. Co. v. S. Mgmt. Servs., Inc., 2017 WL 1354873, at *3 (N.D. Ala. Apr. 13, 2017); Metro. Prop. & Cas. Ins. Co. v. Butler, 2016 WL 2939633, at *6 (N.D. Ala. May 20, 2016).

In the state-court proceedings here, Brandon Hill filed suit against Darryl Hill and Rebecca Hill, while Darryl counterclaimed against Brandon. Doc. 1-1 at 28; Doc. 1-2 at 184. In the federal case...