Eastern District Court Declines Discretionary Jurisdiction Over Insurance Coverage Question When Underlying Tort Action Is Expected to Raise the Same Issue.
Below is a link to the opinion from the Eastern District of Pennsylvania. In Scottsdale Ins. Co. v. Broaddus, et al., 08-3241 (E.D. Pa. J. Diamond February 11, 2009), the court declined to exercise jurisdiction for an insurance coverage question when an action in negligence was already before a Pennsylvania state court in Philadelphia.
The federal court highlights the important distinction between a declaratory judgment action [allowing discretion] and parallel federal and state actions, which would allow abstention. In a declaratory judgment action concerning an insurance coverage question, discretion remains with the court. When the court retains discretion, it considers whether the question before the court is a settled area of state law for which an outcome is predictable, and finds the use of an ambulance in question when a patient is dropped when being brought out of her home is not a settled area of Pennsylvania law. Further the settlement of the declaratory judgment action would be seemingly duplicative of the negligence action. Facts in question in the underlying tort action were also necessary for deciding whether coverage applies.
Even when the coverage issues are not raised in the state negligence action, the court may use its discretion not to take jurisdiction over the matter. The court invokes its need to use “a general policy of restraint,” when it expects the question of the coverage to be raised as a declaratory judgment action in state court or as part of the garnishment process after the negligence action is resolved.
http://www.paed.uscourts.gov/documents/opinions/09D0152P.pdf
D. Joseph Chapman
Attorney at Law
