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National General Assurance Co. v. Cimino

United States District Court, W.D. New York

August 28, 2014



FRANK P. GERACI, Jr., District Judge.

The instant Complaint (ECF No. 1) was filed in this Court by Plaintiff, National General Assurance Company ("Plaintiff"), on April 11, 2014, seeking Declaratory Judgment pursuant to the Declaratory Judgment Act ("DJA") 28 U.S.C. §§ 2201 and 2202, and asserting diversity jurisdiction on the basis that Plaintiff is a North Carolina company and Defendants Michael A. Cimino, Dominick F. Cimino, and Jeffrey P. Cary, as father of J.C., an Infant, and Jeffrey P. Cary ("Defendants") are all New York residents, and the amount in controversy in the underlying action in Monroe County Supreme Court ("Supreme Court") is more than $75, 000. 28 U.S.C. § 1332(a) ("The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs and is between (1) citizens of different States."). "In declaratory judgment cases involving the applicability of an insurance policy to a particular occurrence, the jurisdictional amount in controversy is measured by the value of the underling claim - not the face amount of the policy." Amica Mut. Ins. Co. v. Levine, No. 3:13-CV-00716, ___ F.Supp.2d ___, 2014 WL 1154485, at *3 (D. Conn. March 21, 2014) (citations omitted).[1]

The complaint in the underlying civil action filed in Supreme Court under Index No. 2013-12450 on November 4, 2013 by plaintiffs therein, Jeffrey P. Cary, as Father of J.C., an Infant, and Jeffrey P. Cary, Individually (" Cary action"), alleges that defendant Michael A. Cimino, while negligently, carelessly, recklessly and unlawfully operating a vehicle owned by and with the express knowledge and consent of defendant Dominick F. Cimino, on a public highway, caused bodily injury to infant Plaintiff, a pedestrian, on July 18, 2013. See Ex. A, attached to Complaint, ECF No. 1. In the associated criminal action, People of the State of New York vs. Michael Cimino, Superior Court Information No. 2013-3572, defendant Michael A. Cimino pleaded guilty on October 31, 2013 in Supreme Court to Assault 2° (reckless assault) and commenced serving a prison sentence on January 14, 2014. Cimino Mem., ECF No. 12; see Ex. B, attached to Pl.'s Mem., ECF No. 13.

Initially, the Court notes that Plaintiff is continuing to defend the Ciminos in the Cary action in Supreme Court; but, according to the Complaint for Declaratory Judgment, seeks to withdraw from representation in that action by having federal court determine its rights and obligations under an auto insurance policy issued to its insured Defendant, Dominick F. Cimino, to confirm its belief that pursuant to the policy terms ("Policy") providing for bodily injury/property damage liability coverage, the incident allegations do not involve an "occurrence" as defined in the Policy and/or are otherwise excluded from coverage by Policy exclusions.[2] As a consequence, Plaintiff asserts that it has no obligation to defend, indemnify or otherwise provide insurance coverage to any defendant in the Cary Action.

28 U.S.C. §§ 2201 and 2202 provide, respectively:

In a case of actual controversy within its jurisdiction... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such. (Emphasis added.)
Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment.

The Second Circuit has made clear that courts have consistently interpreted the permissive language of the DJA "as a broad grant of discretion to district courts to refuse to exercise discretion over a declaratory judgment action that they would otherwise be empowered to hear." Dow Jones & Co. v. Harrods Ltd., 346 F.3d 357, 359 (2d Cir. 2003) (citing Wilton v. Seven Falls Co., 515 U.S. 277, 282-83 (1995); Public Serv. Comm'n of Utah v. Wycoff, 344 U.S. 237, 241 (1952); see also 10b Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice & Procedure: Civil § 2759 (3d ed. 1998) ("Wright & Miller").

In Dow Jones, the Second Circuit reiterated the simple test developed to guide the exercise of a district court's discretion in DJA cases, listing the factors it must consider:

(1) whether the judgment will serve a useful purpose in clarifying or settling the legal issues involved;
(2) whether a judgment will finalize the controversy and offer relief from uncertainty;
(3) whether proposed remedy is being used merely for "procedural fencing" or "a race to res judicata";
(4) whether the use of a declaratory judgment would increase friction between sovereign legal systems or improperly encroach on the ...

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