AC AND S, INC. v. Aetna Cas. and Sur. Co.

• Decision Date: 03 October 1980
• Docket Number: Civ. A. No. 80-1341.
• Parties: AC and S, INC. v. The AETNA CASUALTY AND SURETY COMPANY, the Travelers Indemnity Company, the Travelers Insurance Company.
• Court: U.S. District Court — Eastern District of Pennsylvania

500 F. Supp. 511

AC and S, INC. v. The AETNA CASUALTY AND SURETY COMPANY, the Travelers Indemnity Company, the Travelers Insurance Company.

Civ. A. No. 80-1341.

United States District Court, E. D. Pennsylvania.

October 3, 1980.

Richard G. Schneider, Philadelphia, Pa., for plaintiff.

Richard K. Masterson, Norristown, Pa., for Aetna.

John J. Tinaglia, Philadelphia, Pa., for Travelers.

MEMORANDUM AND ORDER

TROUTMAN, District Judge.

Justiciability of claims presented in federal court depends upon the existence of a "case or controversy". Williams v. Zbaraz, ___ U.S. ___, 100 S.Ct. 2701, 65 L.Ed.2d 831 (1980), Nashville, Chattanooga & St. Louis Railroad v. Wallace, 288 U.S. 249, 53 S.Ct. 345, 77 L.Ed. 730 (1933), U.S. Const. Art. III, § 2. The proper exercise of judicial power under Article III requires a "real and substantial controversy admitting of specific relief through a decree of a conclusive character". Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617, (1937). See also Preiser v. Newkirk, 422 U.S. 395, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975) and North Carolina v. Rice, 404 U.S. 244, 92 S.Ct. 402, 30 L.Ed.2d 413 (1971). Resolution of the matter must affect the rights of the litigants. North Carolina v. Rice, supra, Oil Workers Unions v. Missouri, 361 U.S. 363, 80 S.Ct. 391, 4 L.Ed. 373 (1960). That is, the dispute must be "definite and concrete ... and touch the legal relations of parties with adverse legal interests", Aetna Life Insurance Co. v. Haworth, 300 U.S. at 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617, Preiser v. Newkirk, supra, for courts lack power to decide abstract propositions or to render opinions "advising what the law would be on a hypothetical state of facts". Aetna Life Insurance Co. v. Haworth, 300 U.S. 240-41, 57 S.Ct. 461, 81 L.Ed. 617, Federal Communications Commission v. Pacifica Foundation, 438 U.S. 726, 98 S.Ct. 3026, 57 L.Ed.2d 1073 (1978), Preiser v. Newkirk, supra, Hall v. Beals, 396 U.S. 45, 90 S.Ct. 200, 24 L.Ed.2d 214 (1969), Bell v. Maryland, 378 U.S. 226, 84 S.Ct. 1814, 12 L.Ed.2d 822 (1964). See also Wilkinson v. Abrams, 627 F.2d 650, (3d Cir. 1980). Where a plaintiff requests declaratory relief the same standard applies, Golden v. Zwickler, 394 U.S. 103, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969), United Public Workers of America v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754 (1947), and the ultimate inquiry becomes

whether the facts alleged, under all the circumstances, show that there is a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.

Golden v. Zwickler, 394 U.S. at 108, 89 S.Ct. at 959, quoting Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826 (1941). See also Evers v. Dwyer, 358 U.S. 202, 79 S.Ct. 178, 3 L.Ed.2d 222 (1958) and Public Service Commission of Utah v. Wycoff Co., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952). Admittedly, the difference between an abstract proposition and a "case or controversy" is "one of degree". Golden v. Zwickler, 394 U.S. at 108, 89 S.Ct. at 959. Hence, a litmus test to make this determination has never been forged. To issue a declaratory judgment, the Court must exercise sound discretion. Public Affairs Associates, Inc. v. Rickover, 369 U.S. 111, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962), Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942).

In Maryland Casualty Co. v. Pacific Coal & Oil Co., supra, the insurer issued to the insured a liability policy in which it agreed to indemnify the insured for any sums the insurer might be required to pay to third parties. During the pendency of the policy a collision occurred between the insured's employee and a third party who instituted suit in state court to recover damages. Meanwhile the insurer filed suit in federal court and claimed that the truck driven by the insured's employee was not one "hired by the insured" and, therefore, not within the terms of the insurance policy. The insured sought a declaratory judgment to this effect. Similarly, in Aetna Life Insurance Co. v. Haworth, supra, the insurer issued to the insured five policies of insurance upon his life. Several years later the insured ceased payment of premiums and claimed disability benefits under the policies. The insurer sought a declaratory judgment that the policies were null and void by virtue of non-payment of premiums. In both cases the Supreme Court found that the situations called for "adjudication of present rights upon established facts" and concluded that a "case or controversy" existed. Id. at 42, 57 S.Ct. at 464 (emphasis added).

In contrast, the case at bar involves neither established facts nor an adjudication of present rights. In Count One plaintiff, a manufacturer of asbestos-related products, requests the Court to declare Aetna's duty to indemnify and defend plaintiff in every action involving exposure to asbestos at any time during the periods which Aetna provided coverage. Aetna limits the obligation to circumstances where an asbestos-related disease or injury manifested itself during the policy period. Plaintiff admits that it has been named as a defendant in over eight hundred lawsuits among myriad federal and state courts. None of those parties presently appear before the Court. See Nashville, Chicago & St. Louis Railroad v. Wallace, supra. Each insured received various insurance policies which were in effect at various times. The Court does not have before it a concrete dispute in which a plaintiff asks the Court to determine whether the facts of his case fall within the coverage of one or more of those liability insurance policies. Instead, plaintiff urges the Court to draw conclusions concerning liability policies in general without reference to a particular claimant with an actual problem. Cf. St. Paul Fire & Marine Insurance Co. v. United States Fire Insurance Co., No. 79-3020 (E.D.Pa. September 16, 1980) (declaratory judgment action between two insurance companies seeking a determination as to which one owed coverage to a mutual insured who had been sued for slander). Thus, the instant case is unlike situations where the insured is confronted with a demand to make payment to a particular individual, Lake Carriers Association v. MacMullen, 406 U.S. 498, 92 S.Ct. 1749, 32 L.Ed.2d 257 (1972), or where a person demands payment of a claim as of right or where payment has been objected to but made. Altvater v. Freeman, 319 U.S. 359, 63 S.Ct. 1115, 87 L.Ed. 1450 (1943).

Moreover, issuing a declaratory judgment will not necessarily terminate the controversy generating this lawsuit. See Public Service Commission of Utah v. Wycoff Co., supra. Finally, "the actuality of plaintiff's need for the declaration of his rights is ... of decisive importance." Eccles v. Peoples Bank of Lakewood Village, 333 U.S. 426, 432, 68 S.Ct. 641, 644, 92 L.Ed. 784 (1948) ...