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Mountain Laurel Assurance Co. v. Estate of Slusher

December 4, 2006

MOUNTAIN LAUREL ASSURANCE COMPANY, PLAINTIFF,
v.
THE ESTATE OF DONALD J. SLUSHER, BY AND THROUGH HIS ADMINISTRATRIX, CARLENE SLUSHER, DEFENDANT.



The opinion of the court was delivered by: Thomas A. Varlan United States District Judge

(VARLAN/GUYTON)

MEMORANDUM OPINION

This declaratory action is before the Court on defendant's Motion to Dismiss [Doc. 5]. The Court has carefully reviewed the pending motion, along with the supporting and opposing briefs [Docs. 6, 8, 10], and the motion is ripe for determination.

I. Factual Background

On August 19, 2005, Donald Slusher was killed when a coal truck driven by Arlie Napier ran into a building occupied by Slusher. The truck had been parked near the building and the breaks either failed or were not properly activated, resulting in the truck rolling into the building and instantly killing Mr. Slusher. The accident occurred in Bell County, Kentucky. The truck was insured by plaintiff Mountain Laurel Assurance Company ("Mountain Laurel"), who filed this declaratory judgment action (the "Declaratory Action") on June 14, 2006, seeking a declaratory judgment that it has no obligations to the Estate of Mr. Slusher (the "Estate") under the insurance policy (the "Policy") issued by Mountain Laurel.

On the same day, the Estate filed a coercive action in the Bell Circuit Court, Bell County, Kentucky (the "Coercive Action") against Mountain Laurel requesting damages under the Policy. On June 27, 2006, Mountain Laurel removed the Coercive Action to the United States District Court for the Eastern District of Kentucky. On August 18, 2006, the Estate filed the instant motion in the Declaratory Action. On September 5, 2006, Mountain Laurel filed a motion to change venue in the Coercive Action, requesting that the Coercive Action be transferred to this Court. On October 25, 2006, the Honorable Karen K. Caldwell granted Mountain Laurel's motion to change venue, transferring the Coercive Action to this Court. Both actions are now before this Court and no further motions have been filed in either case.

II. Analysis

The Estate has filed a motion to dismiss, arguing that the Court should decline jurisdiction over the Declaratory Action and that this action should be dismissed. [Docs. 5, 6, 10]. Mountain Laurel opposes the Estate's motion, arguing that the Declaratory Action is properly before the Court, that the Court is the most appropriate and convenient court for this action, and that the Court is best suited to resolve this matter, since it involves Tennessee law. [Doc. 8].

A. Declaratory Judgment Action

"Since its inception, the Declaratory Judgment Act has been understood to confer on federal courts unique and substantial discretion in deciding whether to declare the rights of litigants." Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). However, the "[e]xercise of jurisdiction under the Declaratory Judgment Act, 28 U.S.C. § 2201(a) is not mandatory," and a district court "is under no duty to exercise that [jurisdiction]." Bituminous Casualty Corp. v. J & L Lumber Co., Inc., 373 F.3d 807, 812 (6th Cir. 2004) (quotation omitted).

The Sixth Circuit has established a five part test to aid a district court in determining whether to exercise jurisdiction over a declaratory action:

(1) whether the judgment would settle the controversy;

(2) whether the declaratory judgment action would serve a useful purpose in clarifying the legal relations at issue;

(3) whether the declaratory remedy is being used merely for the purpose of "procedural fencing" or "to provide an ...


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