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State Farm Fire & Casualty Co. v. Kirk

United States District Court, W.D. Virginia, Harrison Burg Division

April 21, 2014

STATE FARM FIRE & CASUALTY CO., Plaintiff,
v.
CYNTHIA L. KIRK, et al., Defendants.

MEMORANDUM OPINION

MICHAEL F. URBANSKI, District Judge.

This matter is before the court on a portion of defendant Cynthia L. Kirk's ("Kirk") original motion to dismiss and on Kirk's motion to dismiss the amendment complaint. Dkt. Nos. 8 & 49, respectively. For the reasons stated herein, the court will DENY both motions.

Kirk has a homeowner's insurance policy with plaintiff State Farm Fire and Casualty Company ("State Farm"). In this declaratory judgment action, State Farm seeks to establish that it has no duty under the policy to defend or indemnify Kirk as to certain tort claims made by Samuel Moore-Sobel, a minor suing by his next friend and mother in state court.[1] State Farm is currently providing coverage to Kirk under a reservation of rights. In its original complaint, State Farm alleged that Kirk failed to comply with the notice requirements of the policy and that, to the extent the incident was "expected or intended, " the policy excluded coverage. Dkt. No. 1.

In her first motion to dismiss, Kirk argued that the court lacked jurisdiction and, in the alternative, that the court should abstain from hearing this declaratory judgment action pursuant to the factors set forth by the Fourth Circuit in Nautilus Ins. Co. v. Winchester Homes, Inc. , 15 F.3d 371 (4th Cir. 1994). Those four abstention factors are:

(i) the strength of the state's interest in having the issues raised in the federal declaratory action decided in the state courts;
(ii) whether the issues raised in the federal action can more efficiently be resolved in the court in which the state action is pending;
(iii) whether permitting the federal action to go forward would result in unnecessary "entanglement" between the federal and state court systems, because of the presence of "overlapping issues of fact or law"; and
(iv) whether the declaratory judgment action is being used merely as a device for "procedural fencing"-that is, "to provide another forum in a race for res judicata" or "to achieve a federal hearing in a case otherwise not removable."

Id. at 377. Focusing on the third factor, Kirk argued that there were two reasons which warranted abstention: (1) the issue of notice and (2) the issue of whether the incident was "expected or intended." The court held a hearing on the motion on March 6, 2014. The court denied Kirk's motion to dismiss in part and took it under advisement in part. Dkt. No. 40. Specifically, the court rejected Kirk's first two arguments as to jurisdiction and notice, [2] and took under advisement Kirk's argument that abstention is proper because determining whether the incident was "expected or intended" would result in entanglement with the state court determination of the willful and wanton negligence count alleged in the underlying tort action.

On March 20, 2014, State Farm filed an amended complaint. Dkt. No. 42. In its amended complaint, State Farm again asserts that Kirk failed to comply with the notice requirements of the policy, but drops its assertion that, to the extent the incident was "expected or intended, " the policy excludes coverage. On April 10, 2014, Kirk filed a motion to dismiss to the amended complaint in which she simply adopted and incorporated her arguments, points and authorities set forth in her original motion to dismiss. Dkt. No. 49.

Because State Farm no longer asserts that, to the extent the incident was "expected or intended, " the policy excludes coverage, the remaining portion of Kirk's original motion to dismiss is properly denied as moot. Furthermore, as Kirk raises no new arguments in her motion to dismiss the amended complaint, that motion is properly denied. Accordingly, an appropriate Order will be entered this day denying the remainder of Kirk's motions to dismiss.

The clerk is directed to send a copy of this Memorandum Opinion to all counsel of record.


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