Sizemore v. Producers Coop. Co.

• Decision Date: 19 September 2011
• Docket Number: No. C 11-4044-MWB,C 11-4044-MWB
• Parties: SONYA SIZEMORE, Plaintiff, v. PRODUCERS COOPERATIVE COMPANY, JEFFERY WILLIAM GROTHAUS, and PROGRESSIVE NORTHERN INSURANCE COMPANY, Defendants.
• Court: U.S. District Court — Northern District of Iowa

SONYA SIZEMORE, Plaintiff,

v.PRODUCERS COOPERATIVE COMPANY, JEFFERY WILLIAM GROTHAUS,and PROGRESSIVE NORTHERN INSURANCE COMPANY, Defendants.

No. C 11-4044-MWB

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA WESTERN DIVISION

Dated: September 19, 2011

MEMORANDUM OPINION ANDORDER REGARDING

DEFENDANTS' MOTION TO

DISMISS OR STAY PROCEEDINGS

TABLE OF CONTENTS

I. INTRODUCTION . . . . . . . . . . 2

A. Factual Background . . . . . . . . . . 2

B. Procedural Background . . . . . . . . . . 2

II. LEGAL ANALYSIS . . . . . . . . . . 4

A. Issues Of Citizenship And Diversity Jurisdiction . . . . . . . . . . 4

B. The Abstention Doctrine . . . . . . . . . . 5

1. Dismissal or stay . . . . . . . . . . 6

2. Factors in the abstention analysis . . . . . . . . . . 6

a. Parallelism . . . . . . . . . . 8

b. The "exceptional circumstances" factors . . . . . . . . . . 9

i. Jurisdiction over a res . . . . . . . . . . 9

ii. Inconvenience of the federal forum . . . . . . . . . . 9

iii. Piecemeal litigation . . . . . . . . . . 10

iv. Priority of claims . . . . . . . . . . 12

v. Controlling law . . . . . . . . . . 13

vi. Protection of the federal plaintiff . . . . . . . . . . 13

c. Summary .............................. . . . . . . . . . . 14

III. CONCLUSION . . . . . . . . . . 14

I. INTRODUCTION

A. Factual Background

On May 11, 2011, plaintiff Sonya Sizemore filed a Complaint (docket no. 2) in this court to recover damages from an automobile accident. Sizemore alleges that on May 23, 2009, a vehicle driven by Jeffrey William Grothaus negligently struck her vehicle at an uncontrolled intersection in O'Brien County, Iowa. She contends that she had the right-of-way at the intersection under IOWA CODE § 321.319. Sizemore further alleges that the accident caused "serious, permanent, and life-altering injuries."

Sizemore brought this action against Grothaus and his employer, Producers Cooperative Company (collectively, Producers Cooperative), and Progressive Northern Insurance Company (Progressive), the insurer of her vehicle. Sizemore alleges that Grothaus (1) was engaged in activities within the scope of his employment at the time of the accident and (2) operated his vehicle with the knowledge and consent of Producers Cooperative Company to establish Producers Cooperative Company's liability for Grothaus's alleged negligence. At the time of the accident, Sizemore drove an automobile owned by Andrew M. Horton and insured by Progressive. Sizemore asserts that the insurance policies of Grothaus and Producers Cooperative Company are inadequate to cover her losses and, consequently, she has joined Progressive as a defendant.

B. Procedural Background

Sizemore brought her May 11, 2011, action asserting diversity subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Sizemore asserts that there is completediversity between her and the defendants and that the amount in controversy exceeds $75,000. Sizemore alleges that she is a citizen of the state of Florida, that Grothaus and Producers Cooperative Company are citizens of Iowa, and that Progressive is a Wisconsin corporation with its principal place of business in Ohio, although it maintains substantial contacts in the state of Iowa.

Notwithstanding her filing of this federal action just two days earlier, on May 13, 2011, Sizemore also filed a complaint in the Iowa District Court in and for O'Brien County against the same parties, seeking recovery for the same damages, asserting the same series of events. In her state action, however, Sizemore alleges that she was a resident of Iowa at the time of the accident.¹

On July 11, 2011, Producers Cooperative filed a Motion To Dismiss Or Stay Proceedings (docket no. 11) in this action in light of Sizemore's virtually identical lawsuits in federal court and state court. Sizemore filed a Response (docket no. 13) on July 25, 2011, consenting to the Motion To Stay Proceedings, but resisting the Motion To Dismiss. Producers Cooperative filed a Reply (docket no. 14) on August 1, 2011, re-asserting its

request for a dismissal or, failing that, a stay.²

II. LEGAL ANALYSIS

A. Issues Of Citizenship And Diversity Jurisdiction

Sizemore explains that she filed this action in federal court because she is (and was at the time of filing) a Florida citizen and that she filed her second action in state court, because the "potentially dispositive issues of citizenship and subject matter jurisdiction" could not be fully explored prior to the expiration of the statute of limitations. Eighth Circuit law is well-settled that the citizenship of parties is determined by their domicile at the time that the complaint is filed. OnePoint Solutions, L.L.C. v. Borchert, 486 F.3d 342, 346-47 (8th Cir. 2007) ("To determine jurisdiction, we look to the parties' status at the lawsuit's filing.") (citing Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 570 (2004)). The citizenship of the parties at the time of the events giving rise to the action is irrelevant. Altimore v. Mount Mercy College, 420 F.3d 763, 768 (8th Cir. 2005) ("Whether diversity of citizenship exists is determined at the time the suit is filed—not when the cause of action arose").

I am perplexed by Sizemore's rationale for filing both suits based on the question of her citizenship. There is clearly diversity of citizenship in this action, where domicileat the time the complaint is filed is determinative, see OnePoint Solutions, 486 F.3d at 346-47, and there are no filings by any of the defendants to challenge her citizenship. Even if the defendants could successfully dispute whether diversity exists, Sizemore's federal action could be remanded to state court. Alternatively, if her federal action were dismissed by this court for lack of subject matter jurisdiction, Sizemore could file a state claim, because Iowa's "savings" or "failure of action" statute will preserve her action. See IOWA CODE § 614.10 ("If, after the commencement of an action, the plaintiff, for any cause except negligence in its prosecution, fails therein, and a new one is brought within six months thereafter, the second shall, for the purposes herein contemplated, be held a continuation of the first."). Sizemore alleges no basis for her federal claim other than diversity jurisdiction under 28 U.S.C. § 1332. Based on the information before me regarding the citizenship of the parties, this federal court properly has jurisdiction over this case.

B. The Abstention Doctrine

Producers Cooperative nevertheless urges me to apply the abstention doctrine to prevent potential conflict between the federal and state court actions, alleging that the continuation of the federal action may interfere with the parallel state court action, because both actions involve matters of state law. "The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it." County of Allegheny v. Frank Mashuda Co. , 360 U.S. 185, 188 (1959). The federal courts have a "virtually unflagging obligation . . . to exercise the jurisdiction given them," even when there is a similar state court action pending or potential for conflict between courts. Colorado River Water Conservation Dist.v. United States, 424 U.S. 800, 813-14, 816-17 (1976). The dismissal or stay of a claim under the abstention doctrine, thus, requires "exceptional circumstances where the order to the parties to repair to the State court would clearly serve an important countervailing interest." Id. at 813 (internal citations omitted).

1. Dismissal or stay

The Supreme Court distinguished between actions "at law" and actions "at equity" in the application of the abstention doctrine. Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 719-20 (1996) (affirming reversal by the Ninth Circuit Court of Appeals of the District Court's remand to state court); cf. Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) (allowing dismissal of a federal claim for damages based on forum non conveniens, rather than abstention). "Federal courts have the power to dismiss or remand cases based on abstention principles only where the relief being sought is equitable or otherwise discretionary." Quackenbush, 517 U.S. at 731. "We have permitted federal courts applying abstention principles in damages actions to enter a stay, but we have not permitted them to dismiss the action altogether." Id. at 730.

Sizemore's claim that Producers Cooperative was negligent is an action "at law" under Iowa law. See, e.g., Werthman v. Catholic Order of Foresters, 133 N.W.2d 104, 486 (Iowa 1965). Moreover, Sizemore does not seek any sort of equitable relief. Thus, only a stay of proceedings, not a dismissal, would be permitted in this action. Quackenbush, 517 U.S. at 730. Therefore, that part of Producers Cooperative's motion seeking dismissal of this federal action on "abstention" grounds will be denied.

2. Factors in the abstention analysis

As the Eighth Circuit Court of Appeals has explained,

[A] federal court may divest itself of jurisdiction by abstaining only when parallel state and federal actions exist andexceptional circumstances warrant abstention. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817-18, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976).

Six non-exhaustive factors have been developed to determine whether, in the case of parallel state and federal proceedings, exceptional circumstances warrant abstention. These six factors are:

(1) whether there is a res over which one court has established jurisdiction, (2) the inconvenience of the federal forum, (3) whether maintaining separate actions may result in piecemeal litigation, unless the relevant law would require piecemeal litigation and the federal court issue is easily severed, (4) which case has priority—not necessarily which case was filed first but a greater emphasis on the relative progress made in the cases,

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