United States District Court, E.D. North Carolina, Eastern Division
cause comes before the Court on plaintiffs motion for summary
judgment. The appropriate response and reply have been filed,
and a hearing was held on the motion before the undersigned
on January 4, 2018, at Raleigh, North Carolina. In this
posture, the matter is ripe for ruling and, for the reasons
that follow, this action is dismissed without prejudice.
filed this action seeking a declaratory judgment under 28
U.S.C. § 2201(a) that it its Policy No. 06509223-6
issued to B&J Contracting affords no liability'
coverage for injuries or damages arising out of an accident
which occurred on August 29, 2014, and which resulted in the
death of John Parmley. On August 29, 2014, Mr. Parmley and
Everette Barrow drove two vehicles for B&J Seafood from
New Bern, North Carolina to Newport News, Virginia carrying
crew and equipment for B&J Seafood destined for boats in
Newport News. [DE 38] Fulcher Aff. ¶ 7. On the way to
Newport News, Mr. Parmley drove a 2005 International
"rollback" truck (rollback ' Defendant Estate
of Parmley has argued in opposition to summary judgment that
plaintiffs uninsured/underinsured motorist coverage
provisions provide coverage, but the only issue raised in the
complaint is whether liability coverage has been triggered.
truck) and Mr. Barrow drove a 2014 Chevrolet Silverado pickup
truck (pickup or pickup truck). [DE 40-1] Barrow Dep. at 12.
Mr. Parmley dropped off some equipment in Chesapeake,
Virginia, he met Mr. Barrow in Newport News where they picked
up some equipment and put it on the rollback truck.
Id. at 12-13. That equipment included a scallop
dredge, which was loaded onto the rollback truck using a
crane. Id. at 13. Once the dredge was loaded on the
rollback truck, Mr. Barrow began to drive the rollback truck
back to New Bern and Mr. Parmley began to drive the pickup
back to New Bern. Id. at 49-50. As he was departing,
Mr. Barrow drove over a bump and felt a shift in the load on
the rollback truck. He stopped and waved to Mr. Parmley,
telling him they needed to check the load. Mr. Parmley got
out of the pickup and walked to the rear left side of the
rollback truck while Mr. Barrow walked to the right side to
ensure the straps which held the scallop dredge were intact.
Finding the straps to be intact, Mr. Barrow walked back
around the truck and told Mr. Parmley that he thought the
dredge was loose; as Mr. Barrow arrived beside Mr. Parmley,
the scallop dredge came down, striking Mr. Parmley.
Id. at 37.
time of the accident, the rollback truck was insured under a
motor vehicle liability policy issued by Perm National Mutual
Casualty Insurance Company, Fulcher Aff. ¶ 9; Perm
National's policy is not at issue in this case. The
pickup was listed under plaintiffs policy which is at issue
in this case. Plaintiffs policy issued to B&J Contracting
provides liability coverage for injury or damage
"arising out of the ownership, maintenance or use of
[the] insured auto, " and contains exclusions for bodily
injury to an employee of the insured arising out of or within
the course of that employee's employment or where the
employee was performing duties related to the conduct of any
insured's business. [DE 40-2] at 14 and 17 of 69.
Plaintiffs policy also contains an exclusion for any
obligation for which an insured may be held liable under
workers' compensation. Id. at 17. B&J
Seafood is listed as an additional insured on the policy.
Id. at 67.
filed this action On October 2, 2015. [DE 1]. On August 30,
2016, the matter was stayed on a motion by the plaintiff. [DE
25]. In support of its motion to stay, plaintiff argued that
Through this declaratory action, Progressive Southeastern
asserts coverage defenses which include policy exclusions of
liability coverage of any damages recoverable under any
workers compensation law, and which further exclude coverage
for injury to any employee of an insured under its policy.
The factual issues dispositive of these coverage issues are
now before the N.C. Industrial Commission for adjudication. .
. . Should the Industrial Commission rule that Mr. Parmley
was acting in the course and scope of his employment at the
time of the accident resulting in his death, that ruling
would be dispositive of his wrongful death claims previously
pending against Mr. Barrow and B&J Seafood, Inc., because
where workers compensation benefits apply, those benefits are
the exclusive remedy available to an employee against his
employer or a co-employee. That in turn would be dispositive
of the issues in this action, because there would be no
liability in tort for which Progressive Southeastern's
liability policy could feasibly afford coverage, and because
it would directly implicate the coverage exclusion within
Progressive Southeastern's policy for any damages covered
by any workers compensation law. . . . Simultaneously, there
is no prejudice to the Estate of Mr. Parmley for this Court
to enter the requested stay of proceedings. As noted, such a
stay would prevent all parties, including the Estate, from
litigating the relevant issues relating to Mr. Parmley's
employment in more than one forum at the same time.
[DE 24] at 2-5. The stay in this matter was lifted after the
B&J Seafood defendants filed a notice that the proceeding
in the North Carolina Industrial Commission had been
dismissed. [DE 27, 28]. The North Carolina Industrial
Commission held that it did not have jurisdiction over the
matter where there had been no claim for workers compensation
benefits by the Estate of John Parmley or his widow, and
noted that Mr. Parmley's estate did not contest the
determination of the workers' compensation carrier that
workers compensation benefits should be denied on the basis
was not an employee of B&J Seafood Company. [DE 27-1].
case then proceeded through discovery, after which the
instant motion was filed.
district court may in its discretion decline to exercise
jurisdiction over a declaratory judgment action as no
mandatory obligation to declare the litigant's rights is
imposed by the Declaratory Judgment Act. Aetna Cas. &
Sur. Co. v. Ind-Com Elec. Co., 139 F.3d 419, 421 (4th
Cir. 1998). A court's discretion in declining to exercise
jurisdiction over a declaratory judgment action is not
unfettered and it may only do so for good reason. Aetna
Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th
Cir. 1937). Guiding a court's discretion in determining
whether to exercise jurisdiction over a declaratory judgment
action is whether "(1)  the judgment will serve a
useful purpose in clarifying and settling the legal relations
in issue, and (2)  it will terminate and afford relief from
the uncertainty, insecurity, and controversy giving rise to
the proceeding." Id. at 325. Where, as here,
there is an ongoing proceeding in the state court, issues of
federalism, efficiency, and comity should also be considered.
Mitcheson v. Harris, 955 F.2d 235, 237-40 (4th Cir.
1992); see also Nautilus Ins. Co. v. Winchester Homes,
Inc., 15 F.3d 371, 377 (4th Cir. 1994), overruled on
other grounds by Wilton v. Seven Falls Co., 515 U.S. 277
Court in its discretion finds that good cause exists to
decline to exercise jurisdiction over this declaratory
judgment action. As of the date of the hearing before the
imdersigned, pending in at least one superior court of North
Carolina is a wrongful death tort action brought by Mr.
Parmley's estate. See [DE 38-3]. As noted by
plaintiff in its motion to stay, whether Mr. Parmley was an
employee of B&J Seafood is potentially dispositive of
both this case and the estate's wrongful death action.
Because the issue of Mr. Parmley's status as an employee
of B&J Seafood or some related entity is currently and
necessarily being litigated in the state courts, this Court,
in the exercise of its discretion, declines to entertain the
issue here. In arriving at this conclusion, the Court is
avoiding "charg[ing] headlong into the middle of a
controversy already the subject of state court
litigation" and thereby risking '"[g]ratuitous
interference with the orderly and comprehensive disposition
of [the] state court litigation.'"
Mitcheson, 955 F.2d at 239 (quoting Brillhart v.
Excess Ins. Co.,316 U.S. 491, 495, 62 S.Ct. 1173, 1176
(1942)). The Court has also considered the res judicata
effect of a ruling on Mr. Parmley's employment status by
this Court, and has further considered whether this action
constitutes procedural fencing, or, in other words, is
"a case in which a party has raced to federal court in
an effort to get certain issues that are already pending
before the state courts resolved ...