United States District Court, N.D. Oklahoma
(1) SENTRY INSURANCE A MUTUAL COMPANY, a Wisconsin Corporation, Plaintiff,
(2) JOSEPH A. MCCORMICK, Special Administrator of the ESTATE OF CRYSTAL LOPEZ, Defendant, and (3) MICHAEL ALLEN MCELWRATH; (4) DANA STARR LANDING, Administrator of the ESTATE OF GEORGE VERNON LANDING, JR.; (5) DYLAN BURK; (6) ROBERT PREBLE; (7) INVENTIV COMMERCIAL SERVICE, L.L.C.; (8) INVENTIV HEALTH, INC.; and (9) INVENTIV HEALTH CLINICAL SRS, LLC., Interested Parties/ Defendants.
OPINION AND ORDER
the Court are (1) Defendant Joseph A. McCormick's Motion
to Dismiss or to Stay Proceedings (Doc. No. 16) and (2)
Interested Party/Defendant Michael Allen McElwrath's
Motion to Dismiss (Doc. No. 17). After consideration of the
briefs, and for the reasons stated below, the Motions to
Dismiss are GRANTED.
Sentry Insurance A Mutual Company (“Sentry”)
filed this declaratory judgment action in this Court against
the Special Administrator of the Estate of Crystal Lopez,
Joseph A. McCormick (“McCormick”). Sentry lists
seven additional parties as “Interested
Parties/Defendants, ” including Michael Allen McElwrath
(“McElwrath”). Sentry seeks a declaratory
judgment pursuant to 28 U.S.C. §§ 2201-2202 and
Federal Rule of Civil Procedure 57 regarding the existence of
coverage and its duty to pay damages arising out of an
to the Complaint, on July 31, 2015, Crystal Lopez
(“Lopez”), an employee of inVentiv Commercial
Services, LLC (“inVentiv”), was driving a car
owned by inVentiv. (Doc. No. 2, ¶¶ 12-14). Sentry
was the insurance carrier for inVentiv at the time.
(Id. ¶ 13). Prior to the accident, Lopez had
consumed alcoholic drinks and was on a weight loss medication
that warned against mixing it with alcohol. (Id.
¶ 17). As Lopez drove the wrong way on the Will Rogers
Turnpike, she collided head-on with a truck driven by George
Landing, Jr. (“Landing”), killing both of them.
(Id. ¶ 12). Another vehicle occupied by
McElwrath, Dylan Burk, and Robert Preble was also involved in
the accident, and all three were injured as a result.
use of the vehicle in question was subject to a Fleet
Management Policy, which prohibited Lopez from driving the
vehicle while her ability or alertness was impaired,
including by intoxication from alcohol or drugs.
(Id. ¶¶ 14-15). Lopez had agreed to be
bound by the Fleet Management Policy when inVentiv provided
her with the subject vehicle. (Id. ¶ 16). By
driving while intoxicated, Lopez allegedly violated
inVentiv's policy and was not a permissive user of the
vehicle. (Id. ¶ 21).
the accident, McElwrath filed a Petition in Tulsa County
District Court against the Estate of Crystal Lopez seeking
damages for injuries arising out of the accident,
McElwrath v. McCormick, Special Administrator of the
Estate of Crystal Lopez; inVentiv Health Clinical SRS, LLC;
and inVentiv Commercial Services, LLC., Case No.
CJ-2015-3328 (the “McElwrath Lawsuit”).
(Id. ¶ 22). McElwrath asserts claims of gross
negligence and punitive damages against the Estate of Crystal
Lopez, and a respondeat superior claim against
inVentiv. (Id.). The Estate of George Landing, Jr.
has also filed a Petition in Tulsa County District Court
against the Estate of Crystal Lopez and others seeking
damages for Landing's wrongful death, Landing v.
Inventiv Commercial Services, LLC, InVentiv Health, Inc.,
Aeterna Zentaris, Inc., and the Estate of Crystal Lopez,
Case No. CJ-2015-4675 (the “Landing Lawsuit”).
(Id. ¶ 24). The Estate of George Landing, Jr.
asserts claims for negligence and punitive damages against
the Estate of Crystal Lopez, and alleges inVentiv and
inVentiv Health, Inc. knew or should have known that Lopez
would likely drive her vehicle while intoxicated but failed
to take reasonable action to prevent that risk.
(Id.). Sentry is providing a defense to Lopez and
the inVentiv entities in both the McElwrath and Landing
Lawsuits, under a reservation of rights. (Id.
¶¶ 23, 25). McElwrath, Burk, and Preble have also
filed workers' compensation claims as a result of the
accident, and inVentiv's workers' compensation
insurer sent a notice of subrogation to Sentry for any
payments made to those individuals. (Id. ¶ 26).
declaratory judgment action, Sentry contends it has no duty
to indemnify for the damages claimed against Crystal Lopez in
either of the state court lawsuits, because Lopez violated
inVentiv's policy against operating a vehicle while
intoxicated, inVentiv had no knowledge that Lopez drove the
company car while intoxicated, and Lopez was not acting
within the scope of permission or authorization from inVentiv
at the time of the accident. Sentry alleges it did not assume
the risk of covering injuries resulting from an inVentiv
employee violating company policy. Sentry seeks a judicial
declaration “of the rights, duties and obligations of
Sentry concerning its duties, if any, to indemnify in
relation to the various claims asserted against Lopez.”
(Doc. No. 2, ¶ 37).
McCormick has now moved to dismiss Sentry's declaratory
judgment action, asking the Court either to decline to
exercise jurisdiction or to dismiss for lack of subject
matter jurisdiction. (Doc. No. 16). In the alternative,
McCormick asks the Court to stay proceedings in this case
until pertinent issues in the Tulsa County cases have been
resolved. Interested Party/Defendant McElwrath also has moved
to dismiss, joining McCormick's arguments and separately
arguing Sentry fails to raise a viable claim with respect to
McElwrath. (Doc. No. 17). The motions are now fully briefed
and ripe for review.
contends the Court should decline to exercise its
jurisdiction over Sentry's declaratory judgment
action. McCormick argues this case presents
the same material issue of facts that are currently before
the Tulsa County District Court in the Landing and McElwrath
Lawsuits: Was Crystal Lopez operating the subject inVentiv
vehicle with inVentiv's permission and within the course
and scope of her employment by inVentiv? McCormick argues
Sentry has created a duplicate, parallel proceeding in the
form of this later-filed declaratory judgment action, which
locks the Court in a “judicial race to judgment.”
(Doc. No. 16, at 6). Sentry disagrees with McCormick's
position and asks the Court to retain jurisdiction over this
Standard of Review
Declaratory Judgment Act “confers upon courts the
power, but not the duty, to hear claims for declaratory
judgment.” Mid-Continent Cas. Co. v. Vill. at Deer
Creek Homeowners Ass'n, 685 F.3d 977, 980 (10th Cir.
2012) (citing Wilton v. Seven Falls Co., 515 U.S.
277, 286-87 (1995)); Pub. Affairs Assoc., Inc. v.
Rickover, 369 U.S. 111, 112 (1962)). Therefore, whether
to entertain a declaratory judgment action is a matter
committed to the trial court's sound discretion.
Kunkel v. Cont'l Cas. Co., 866 F.2d 1269, 1274
(10th Cir. 1989) (citing Alabama State Fed'n of Labor
v. McAdory, 325 U.S. 450, 462 (1945)). When a parallel
case is pending in state court, “[o]rdinarily it would
be uneconomical as well as vexatious for a federal court to
proceed in a declaratory judgment suit where another suit is
pending in state court presenting the same issues, not
governed by federal law, between the same parties.”
Brillhart v. Excess Ins. Co. of America, 316 U.S.
491, 495 (1942).
deciding whether to hear a declaratory judgment action, the
court should weigh the following factors: (1) whether a
declaratory action would settle the controversy; (2) whether
it would serve a useful purpose in clarifying the legal
relations at issue; (3) whether the declaratory remedy is
being used merely for the purpose of “procedural
fencing” or “to provide an arena for a race to
res judicata”; (4) whether use of a
declaratory action would increase friction between our
federal and state courts and improperly encroach upon state
jurisdiction; and (5) whether there is an alternative remedy
which is better or more effective. St. Paul Fire &
Marine Ins. Co. v. Runyon, 53 F.3d 1167, 1169 (10th Cir.
1995) (citing State Farm Fire & Cas. Co. v.
Mhoon, 31 F.3d 979, 983 (10th Cir. 1994)). The Court
will refer to these five factors as the “Mhoon