Firemen's Insurance Company of Newark, NJ v. Riley, Civ. A. No. 6774.

• Decision Date: 04 February 1971
• Docket Number: Civ. A. No. 6774.
• Citation: 322 F. Supp. 349
• Parties: FIREMEN'S INSURANCE COMPANY OF NEWARK, N. J., Plaintiff, v. Patrick D. RILEY, Administrator of the Estate of James B. Riley, deceased, and William W. Riddle, Jr., Administrator of the Estate of William W. Riddle, deceased, Defendants.
• Court: U.S. District Court — Western District of Kentucky

322 F. Supp. 349

FIREMEN'S INSURANCE COMPANY OF NEWARK, N. J., Plaintiff, v. Patrick D. RILEY, Administrator of the Estate of James B. Riley, deceased, and William W. Riddle, Jr., Administrator of the Estate of William W. Riddle, deceased, Defendants.

Civ. A. No. 6774.

United States District Court, W. D. Kentucky, Louisville Division.

February 4, 1971.

C. Alex Rose, Louisville, Ky., for plaintiff.

Harry L. Hargadon, Louisville, Ky., for defendants.

MEMORANDUM AND ORDER

JAMES F. GORDON, Chief Judge.

This matter comes before the Court on defendants' motion to dismiss this action for a declaratory judgment. The following facts are not in dispute.

On February 11, 1969, a car owned by Ira A. Foley and driven by William W. Riddle was involved in an accident on Highway 60 in Jefferson County, Kentucky. At the time the accident occurred there was in force a policy of liability insurance issued to Foley by the plaintiff, Firemen's Insurance Company of Newark, N. J. ("Firemen's"). Riddle and one James B. Riley died of injuries sustained in the auto accident.

Following the accident Patrick D. Riley, Administrator of the Estate of James B. Riley, sought a recovery in Jefferson Circuit Court against Foley and William W. Riddle, Jr., Administrator of the Estate of William W. Riddle. Prior to trial the action was dismissed as to Foley. Firemen's denied coverage as to Riddle, but defended the action on behalf of Riddle on condition that Firemen's did not waive its right to deny coverage in the event of an adverse judgment. On November 12, 1970, a judgment was entered against the Riddle Estate in the amount of $57,500.

On November 13, 1970, Firemen's filed an action in this Court seeking a declaration that as a matter of law the policy of liability insurance issued to Foley afforded no coverage as to Riddle.

Following the judgment referred to above there was issued in Jefferson Circuit Court an execution against the property of the Riddle Estate. This execution was duly placed in the hands of the Sheriff of Jefferson County, and on December 2, 1970, the execution was returned by the Sheriff bearing the endorsement "no property found".

On or about December 3, 1970, Patrick D. Riley, Administrator of the Estate of James B. Riley, filed an action in Jefferson Circuit Court against Firemen's, William W. Riddle, Jr., Administrator of the Estate of William W. Riddle, and Seaboard Fire & Marine Insurance Company ("Seaboard"). The complaint recited the judgment of November 12, 1970, alleged that at the time of the auto accident Riddle was covered by separate policies of liability insurance issued by Firemen's and Seaboard, and demanded a recovery against Firemen's and Seaboard in the amounts of $47,000 and $10,000, respectively.

Despite defendants' contentions to the contrary, it is clear that this Court has jurisdiction to hear this case. Firemen's is a New Jersey corporation with its principal place of business in New York, defendants are citizens of Kentucky, and the amount in controversy exceeds $10,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). However, the conclusion that we have the power to hear this case does not end our inquiries, since it is well settled that the decision to entertain a suit for a declaratory judgment rests upon the sound discretion of the Court. Public Affairs Associates, Inc. v. Rickover, 369 U.S. 111, 112, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962); Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 494, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942).

Since adoption of the Federal Declaratory Judgment Act in 1934 numerous guidelines have been fashioned to aid the Court in the exercise of its discretion. Thus it has been said that the Court may refuse to entertain an action for a declaratory judgment where the relief sought would not terminate the controversy between the parties, Williams v. Ball, 294 F.2d 94 (2nd Cir. 1961), or where the declaratory judgment action is being used for "procedural fencing". Franklin Life Insurance Co. v. Johnson, 157 F.2d 653 (10th Cir. 1946). At the same time, the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. Fed.R.Civ.P. 57. Having reviewed the relevant case law we believe it to be a valid generalization that the determinative factor is whether the declaratory action will result in a just and more expeditious and economical determination of the entire controversy. See Guardian Life Insurance Co. of America v. Kortz, 151 F.2d 582, 586 (10th Cir. 1945); C. Wright, Federal Courts 392 (1963).

The facts set out above clearly demonstrate that this action for a declaratory judgment will actually increase, rather than decrease, the number of lawsuits spawned by the unfortunate occurrence of February 11, 1969. For even if we were to overrule this motion to dismiss and hold for plaintiff on the merits, the Estate of James B. Riley presumably would proceed with its suit against Seaboard in Jefferson Circuit Court. Thus, to entertain this...