Smith v. Metropolitan Property and Liability Ins. Co., 1142

Decision Date10 July 1980
Docket NumberD,No. 1142,1142
Citation629 F.2d 757
PartiesEarl G. SMITH, Administrator of the Estate of Gary Dean Smith, Deceased, Plaintiff-Appellant, v. METROPOLITAN PROPERTY AND LIABILITY INSURANCE COMPANY, Defendant-Appellee. ocket 80-7131.
CourtU.S. Court of Appeals — Second Circuit

L. Douglas Shrader, Bridgeport, Conn. (Zeldes, Needle & Cooper, Frank J. Silvestri, Jr., Bridgeport, Conn., of counsel), for plaintiff-appellant.

Snow Gene Munford, Hartford, Conn., of counsel, for defendant-appellee.

Before LUMBARD, MANSFIELD and MULLIGAN, Circuit Judges.

MULLIGAN, Circuit Judge:

The only question raised in this appeal is whether the district court properly abstained in a diversity action. The complaint requested a declaration of the validity under Connecticut law of an exclusionary clause in an automobile insurance policy. The United States District Court for the District of Connecticut, Ellen Bree Burns, Judge, approved and adopted a ruling of a United States Magistrate Arthur H. Latimer that abstention was appropriate under Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058 (1959), in that the suit presented "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar." 1 Colorado River Water Conservation District v. United States, 424 U.S. 800, 814, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976). We affirm.

The appellant, Earl G. Smith, is a citizen of Connecticut and the administrator of the estate of his son, Gary D. Smith, who was fatally injured when his motorcycle collided with an automobile operated by an uninsured motorist. Gary Smith was allegedly insured under a policy issued to his father by the appellee, Metropolitan Property and Liability Insurance Co. ("Metropolitan"), a Delaware corporation with its principal place of business outside Connecticut.

The appellant filed a claim on his son's behalf under the uninsured motorist provisions of the policy. Metropolitan rejected the claim on the ground that the motorcycle which Gary Smith was operating at the time of the accident, although owned by him, was not listed in the schedule of "insured highway vehicles" which formed part of the policy. 2 Metropolitan argued that coverage was therefore barred by an exclusionary clause providing in pertinent part that:

This policy does not apply:

Under the Protection Against Uninsured Motorists Coverage

(e) to bodily injury to an insured while occupying a highway vehicle (other than an insured highway vehicle) owned by the named insured or by any relative resident in the same household as the named insured. . . . (emphasis added)

Upon rejection of his claim, the appellant commenced an action against Metropolitan in the District Court for the District of Connecticut. Jurisdiction was based on diversity of citizenship. The complaint sought a declaratory judgment that the exclusionary clause of the policy contravened Connecticut public policy and was therefore void. 3

Both parties filed motions for summary judgment, which were referred to Magistrate Latimer, who denied the motions and ruled that abstention was appropriate. This ruling was approved and adopted in the opinion of Judge Burns.


Although the jurisdiction which Congress has bestowed on the federal courts may at one time have been thought to be strictly mandatory, see, e. g., Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404, 5 L.Ed. 257 (1821); Bacon v. Rutland Railroad Co., 232 U.S. 134, 137, 34 S.Ct. 283, 284, 58 L.Ed. 538 (1914); Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 228, 29 S.Ct. 67, 70, 53 L.Ed. 150 (1908), it is now well established that we may refrain from deciding questions of state law otherwise within our jurisdiction, where the controversy falls within one of several categories thought to be inimical to harmonious federalism. See, e. g., Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943) (a state administrative apparatus would be disrupted); Louisiana Power & Light Co. v. City of Thibodaux, supra (where a difficult question of state law of substantial import is presented). See also Railroad Comm. of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941) (where federal constitutional issues might be mooted by a determination of a difficult question of state law); see generally ALI, Study of the Division of Jurisdiction Between State and Federal Courts (1969).

In deciding to abstain under Thibodaux, the district court exercised "fair and well-considered discretion." Thibodaux, supra, 360 U.S. at 30, 79 S.Ct. at 1073; see also Lehman Bros. v. Schein, 416 U.S. 386, 390-91, 94 S.Ct. 1741, 1743-44, 40 L.Ed.2d 215 (1974) (use of state certification procedure is discretionary). In addition, a district court has discretion to withhold declaratory relief, such as is requested here, in order to avoid "needless obstruction of the domestic policies of the states." Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 298, 63 S.Ct. 1070, 1073, 87 L.Ed. 1407 (1943); Beacon Const. Co. v. Matco Elec. Co., 521 F.2d 392 (2d Cir. 1975). The propriety of the district court's decision to withhold such relief is further reinforced by the fact that appellant has recourse to arbitration. Paragraph 22 of the policy provides that disputes as to coverage or amount of payment shall be settled by arbitration upon written election of the insured. On the oral argument appellant indicated that the issue of damages would be submitted to arbitration. Given that both the extent of coverage and the amount of damages are arbitrable, the arbitration proceeding is a fully adequate alternative remedy which would be substantially duplicative of any proceeding in this court.

Although the availability of alternative remedies is not a bar to declaratory relief, Fed.R.Civ.P. 57, the district court may in its discretion refuse declaratory relief if the alternative remedy is more appropriate. Bituminous Coal Operators' Ass'n v. International Union, U.M.W., 585 F.2d 586, 594-95 (3d Cir. 1978); 6A J. Moore P 57.08(3) (2d ed. 1976). This is not a case in which declaratory relief is particularly appropriate. See, e. g., Luckenbach S.S. Co. v. United States, 312 F.2d 545, 548 (2d Cir. 1963) (seeking declaration of non-liability as to admiralty claim asserted by defendant but on which defendant had failed to bring suit); Mine Safety Appliance co. v. Energetics Science, Inc., 416 F.Supp. 530 (S.D.N.Y. 1976) (seeking declaration of invalidity of defendant's patent and concomitant non-infringement). See also Ungar v. Dunkin' Donuts, 68 F.R.D. 65, 145 (E.D. Pa. 1975), rev'd on other grounds, 531 F.2d 1211 (3d Cir.), cert. denied, 429 U.S. 823, 97 S.Ct. 74, 50 L.Ed.2d 84 (1976) (dictum) (purpose of declaratory judgment is to avoid multiplicity and circuity of actions). A unified arbitration of the entire dispute would not only conserve judicial resources but would also avoid potentially abrasive intrusion into an area of state sovereignty. See Necchi S.p.A. v. Necchi Sewing Machines Sales Corp., 348 F.2d 693, 696 (2d Cir. 1965), cert. denied, 383 U.S. 909, 86 S.Ct. 892, 15 L.Ed.2d 664 (1966) (because issues raised by plaintiff in his request for a declaratory judgment could also be determined in an arbitration proceeding, it was within the discretion of the district court to dismiss "the parallel and duplicative action seeking declaratory judgment."); accord, Aeronaves de Mexico, S.A. v. Triangle Aviation Services, Inc., 389 F.Supp. 1388 (S.D.N.Y. 1974).


We turn now to a consideration of whether the conditions for Thibodaux abstention were satisfied here. Both the branches unclear state law and broad impact on state policy must be satisfied; neither is alone sufficient. Meredith v. Winter Haven, 320 U.S. 228, 236-38, 64 S.Ct. 7, 11-12, 88 L.Ed. 9 (1943); compare Thibodaux, supra, with County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 79 S.Ct. 1060, 3 L.Ed.2d 1163 (1959).

The district court was amply justified in concluding that the state law uncertainty as to the validity of the clause excluding coverage for uninsured vehicles was considerable. We need not be concerned here with weighting degrees of uncertainty, compare Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971) with Bellotti v. Baird, 428 U.S. 132, 147-48, 96 S.Ct. 2857, 2866, 49 L.Ed.2d 844 (1976); no edification whatever is available on this question, either from the Connecticut courts, see, e. g., Safeco Ins. Cos. v. Vetre, 174 Conn. 329, 387 A.2d 539 (1978); Rosnick v. Aetna Casualty & Surety Co., 172 Conn. 416, 374 A.2d 1076 (1977); Pecker v. Aetna Casualty & Surety Co., 171 Conn. 443, 370 A.2d 1006 (1976); Roy v. Centennial Insurance Co., 171 Conn. 463, 370 A.2d 1011 (1976); Citrano v. Berkshire Mut. Ins. Co., 171 Conn. 248, 368 A.2d 54 (1976); Weingarten v. Allstate Ins. Co., 169 Conn. 502, 363 A.2d 1055 (1975); Griffith v. Security Ins. Co. of Hartford, 167 Conn. 450, 356 A.2d 94 (1975), or from the language of the uninsured motorist statute and its associated regulations. 4 The courts of other states are in conflict. Compare Bankes v. State Farm Mut. Auto. Ins. Co., 216 Pa.Super. 162, 264 A.2d 197 (1970) and Beek v. Ohio Casualty Ins. Co., 135 N.J.Super. 1, 342 A.2d 547 (1975), aff'd, 73 N.J. 185, 373 A.2d 654 (1977) with Employers' Fire Ins. Co. v. Baker, 383 A.2d 1005 (R.I. 1978) and Rodriquez v. Maryland Indem. Ins. Co., 24 Ariz.App. 392, 539 P.2d 196 (1975). In other words, we have "no real idea" how the Connecticut courts would decide this question. First Nat'l Bank v. Reed, 306 F.2d 481, 487 (2d Cir. 1962). 5

The second branch of Thibodaux is also satisfied here. In Colorado River, supra, 424 U.S. at 814, 96 S.Ct. at 1244, the court made it plain that Thibodaux abstention was not limited to the area of eminent domain law which happened to be involved in the earlier...

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