United Fin. Cas. Co. v. Rocha
| Docket Number | 2:22-cv-00737-MLG-GBW |
| Decision Date | 21 July 2023 |
| Parties | UNITED FINANCIAL CASUALTY COMPANY, Plaintiff, v. JEREMIAH GABRIEL ROCHA, HECTOR ROCHA, individually and d/b/a ROCHA'S SEPTIC SERVICE, OSCAR RODRIGUEZ, GENESIS ACEVES-LOPEZ, individually and as next friend of A.R., a minor, and JOLEEN K. YOUNGERS, as Personal Representative of the wrongful death estate of JAZMIN RODRIGUEZ, Defendants. |
| Court | U.S. District Court — District of New Mexico |
This matter comes before the Court on Defendants' Oscar Rodriguez, Genesis Aceves-Lopez, individually and as next friend of A.R., a minor, and Joleen K. Youngers', as Personal Representative of the wrongful death estate of Jazmin Rodriguez, (collectively referred to hereafter as the “Rodriguez Defendants”) Motion to Dismiss, or Alternatively, Abstain from Exercising Jurisdiction. Doc. 11. Having reviewed the Parties' filings, relevant legal authority, and having heard oral argument presented at a hearing on this matter, the Court will grant the motion.
The facts of this case are tragic. On the morning of September 29, 2020, Genesis Aceves-Lopez, A.R., and Jazmin Rodriguez were in a vehicle traveling eastbound on Interstate 10 in Dona Ana County, New Mexico. Docs. 1-2 at 3-4; 17 at 1-2. At the same time, Jeremiah Rocha was operating a commercial vehicle in the scope of his employment with Rocha's Septic Service. Doc 1-2 at 4. He was also traveling eastbound on Interstate 10 and was situated behind Aceves-Lopez, A.R., and Rodriguez as they began to exit the roadway. Doc. 20 at 11.[1]For reasons that are apparently in dispute,[2] Jeremiah Rocha was unable to timely bring his vehicle to a stop and rear-ended Aceves-Lopez, A.R and Rodriguez. Jazmin Rodriguez was killed in the collision. Doc. 20 at 12. The other passengers suffered significant physical injuries. Id.
Aceves-Lopez filed suit in state court for her injuries, and she also asserted damages on behalf of her son A.R. Youngers, who is the court appointed personal representative of Jazmin Rodriguez's wrongful death estate, seeks damages flowing from Jazmin Rodriguez's suffering and loss of life. Id. at 20. The initial pleading named Jeremiah and Gabriel Rocha as defendants along with Gabriel Rocha's proprietary business, Rocha's Septic Service. Doc. 1-2 at 2. The complaint asserts various claims for damages arising from the collision, including wrongful death and personal injury damages. See generally id. The original complaint did not name United Financial Casualty Company (“UFCC”), who is the commercial vehicle insurance carrier for Rocha's Septic Service. Doc. 20 at 10 ¶ 9.
Approximately ten months after the underlying state court litigation began UFCC initiated these proceedings for declaratory injunctive relief. See generally Doc. 1. This suit names all the parties from the state court litigation and also Oscar Rodriguez.[3]Id. at 1-2. UFCC seeks a binding decision that the limits of available insurance coverage available to the state court plaintiffs is capped at $50,000, which is the amount of liability coverage Hector Rocha apparently purchased to insure his commercial vehicle. Id. at 7-8. The state court plaintiffs-Aceves-Lopez and Youngers-contend that more coverage is available. In their view, both federal and state regulations required Hector Rocha to carry at least $750,000 in commercial liability coverage. They assert that that UFCC failed to apprise him of this obligation, and that therefore, the applicable policy should be “reformed” to expand coverage from $50,000 to “meet the minimum financial responsibility requirements set forth” in N.M.A.C. 18.3.3.10(E)-i.e., $750,000. Doc. 20 at 19. The state court plaintiffs argue that the decision of whether to effectuate this contractual rewriting is best left to “the underlying state court suit to avoid duplicative efforts and possibly inconsistent outcomes.” Id.
After these proceedings were initiated, the state court plaintiffs amended their pleading to include a claim for injunctive relief that is duplicative of the issues UFCC seeks to address in this forum. Doc. 20 at 18-19. Thereafter, UFCC sought an entry of default against Jeremiah Rocha and Hector Rocha after they did not answer UFCC's complaint for declaratory relief.[4] Doc 25. Aceves-Lopez, Youngers, and Oscar Rodriguez filed an objection to the entry of default against the Rochas. Doc. 27. UFCC responded noting that it had only moved for entry of default and had not sought default judgment.[5]Doc. 30.
Against this factual and procedural background, the Court must determine whether to exercise jurisdiction and determine the limits available to the Rodriguez Defendants under the appliable UFCC commercial policy. For the reasons explained below, the Court concludes that the matter is better left addressed in the ongoing state court litigation and UFCC's complaint for declaratory relief should be dismissed.
OPINION“The Declaratory Judgment Act [(‘DJA or the Act')] provides the courts with jurisdiction over declaratory judgment actions when there is a justiciable case or controversy.” Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, 620 F.3d 1287, 1300 (Fed. Cir. 2010). “The general purpose of [the DJA] is to provide an immediate forum for the adjudication of rights and obligations in actual controversy where such controversy may be settled in its entirety and with expediency and economy.” Duggins v. Hunt, 323 F.2d 746, 748 (10th Cir. 1963). However, “[t]he statute creates a remedy only; it does not create a basis of jurisdiction, and does not authorize the rendering of advisory opinions.” Cutaiar v. Marshall, 590 F.2d 523, 527 (3d Cir. 1979). Accordingly, the party seeking a declaratory judgment must demonstrate that it has met the predicate case-or-controversy requirements of Article III standing. Surefoot LC v. Sure Foot Corp., 531 F.3d 1236, 1241 (10th Cir. 2008) (citing MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007)). To meet this obligation the plaintiff must satisfy three criteria:
First, the plaintiff must have suffered an injury in fact-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of .... Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
McCombs v. Delta Grp. Elecs., Inc., Case No. 1:22-CV-00662-MLG-KK, 2023 U.S. Dist. LEXIS 100632, at *6 (D.N.M. June 9, 2023) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). The party seeking declaratory relief shoulders the burden of establishing the existence of these elements. W. Watersheds Project v. Interior Bd. of Land Appeals, 62 F.4th 1293, 1296 (10th Cir. 2023); McCombs, 2023 U.S. Dist. LEXIS 100632, at *6-7. “The facts supporting jurisdiction must be affirmatively alleged, and if challenged,” the plaintiff must “persuad[e] this court by a preponderance of the evidence that the court has jurisdiction.” United States v. Bustillos, 31 F.3d 931, 933 (10th Cir. 1994).
Courts addressing the question presented, including those in this district, have typically ruled that a party has standing under the DJA when seeking to resolve a coverage dispute. United Fire & Cas. Co. v. Caskey Drywall N.M., LLC, Case No. 1:17-cv-01108 KG/JHR, 2018 U.S. Dist. LEXIS 117982, at *8-12 (D.N.M. July 16, 2018) (); see also Am. Ins. Co. v. Evercare Co., 430 Fed.Appx. 795, 799 (11th Cir. 2011) ( ); Gov't Emps. Ins. Co. v. Dizol, 133 F.3d 1220, 1222 n.2 (9th Cir. 1998) (“[W]e have consistently held that a dispute between an insurer and its insureds over the duties imposed by an insurance contract satisfies Article III's case and controversy requirement.”). This decisional authority recognizes that insurance litigation frequently involves a real, and often imminent, threat of harm to the parties. The DJA provides a means for these “controversies to be settled before they ripen into violations of law or a breach of contractual duty.” 10B Charles Alan Wright, Arthur Miller & Mary Kay Kane, Federal Practice and Procedure § 2751, at 429 (4th ed. 2016).
Here the core dispute is between UFCC and the Rodriguez Defendants regarding the impact of state and federal regulations on the insurance policy held by Rocha's Septic Service. Doc. 1 at 8. UFCC contends that the benefits conferred by that policy are limited to $50,000 and exclude punitive damages. Id. By contrast, the Rodriguez Defendants seek reformation of that insurance contract to conform with state and federal regulations, which they assert mandate a minimum of $750,000 in coverage. Doc. 20 at 18-19; N.M.A.C. 18.3.3.10(E) (). Thus, as UFCC's complaint alleges, the company will suffer financial harm if the substantive legal claims are not resolved in the company's favor. Moreover, there is an obvious controversy underlying this action-i.e., whether the operative...
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