Petition for Writ of Certiorari — Hartford Insurance Co. of the Midwest v. Huth

(y) Supreme Court, U.S.

FILES

—" 988 DEC 2 0 2002

In The

Supreme Court of the GAnited States

S

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HARTFORD INSURANCE COMPANY OF

THE MIDWEST, an Indiana corporation,

Petitioner,

Vs.

CATT MICHELE HUTH, an individual,

Respondent.

) r

v

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

&

Vv

PETITION FOR WRIT OF CERTIORARI

¢

STEVEN PLITT

Counsel of Record

SHUGHART THOMSON KILROY

GOODWIN RavpP, P.C.

3636 North Central Ave.,

Suite 1200

Phoenix, AZ 85012

Telephone: (602) 650-2000

Facsimile: (602) 264-7033

Attorney for Petitioner

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831 |

QUESTIONS PRESENTED

1. Should the abstention doctrine be expanded,

contrary to decisions of other Circuits as well as an earlier

decision of the Ninth Circuit itself, to allow a party to

circumvent federal court jurisdiction over a first-filed

federal declaratory judgment action by filing a parallel

state court declaratory judgment case and then using the

factors set forth in Brillhart v. Excess Insurance Co. of

America, 316 U.S. 491 (1942), to obtain both a stay of the

federal case and a remand of the state case, even where

the state case was otherwise fully removable under 28

U.S.C. § 1441?

2. Should the Court address the question it left

unanswered in Wilton v. Seven Falls Co., 515 U.S. 277

(1995), concerning the discretion a federal district court

has to abstain from considering a federal declaratory

judgment action when there is no parallel, concurrent

state action?

ii

PARTIES

The caption of this case contains the names of all

parties. Petitioner Hartford Insurance Company of the

Midwest is a wholly-owned subsidiary of Hartford Fire

Insurance Co., which in turn is a wholly-owned subsidiary

of Hartford -Financial Services Group, Inc., a publicly-

traded company.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED............ccccccccssssessessesseeees i

ia shin csdesesvninntndisvactovssanecsosens ii

Pr TID oi. aoc ccs cicssesscwsnccccscescessess. iv

PETITION FOR WRIT OF CERTIORARI................ 1

I swnnhspdbotnavpnoniens 1

STATEMENT OF JURISDICTION..............cccccesee0ee 1

STATUTORY PROVISIONS INVOLVED...............4:. 2

STATEMENT OF THE CASE..............c.cccccccccoocccessess 3

. REASONS FOR GRANTING THE PETITION ......... 5

The Decision Below Expands The Abstention

Doctrine To Allow A Remand Of An Action That

Had Been Properly Removed To Federal Court

Under Diversity Jurisdiction, And In So Doing

Has Heightened An Existing Conflict Among The

cia ea pacinabbenebioureivaneves 5

iv

TABLE OF AUTHORITIES

Page

CASES:

Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co., 139

BOE 41D Cathe Cle, 1GDD ans ccciseienississnistibiiecninsiteananrsiicinicisinia 13

Allstate Ins. Co. v. Longwell, 735 F.Supp. 1187

I Se ein vsinnincsscincatsnnSiapiiesienniedahantateeapaevasanan 9,11

Allstate Ins. Co. v. Seelye, 198 F. Supp. 2d 629 (W.D. :

POs DT vscisitcnnesnivsicicebtndnisichiiahemnintnabiaannaiaikaiamotin 13

Board of County Comm’rs of the County of Marchall

v. Continental Western Ins. Co., 184 F. Supp. 2d

SAR Cars By i iitisceictlasverectned Setinicaieniatatintncdionenrines 13

Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491

RID ack sic cnatnciecsnscddacedsncslahiasetiinhoasniecaninonos 10, 11, 12, 13

Buchner v. F-_D.I.C., 981 F.2d 816 (5th Cir. 1998)............... 6

Burnette v. Godshall, 828 F. Supp. 1439 (N.D. Cal

WOES wiv sisiecisininteicricccaskcanttitihinihabiabiciiasissaibacbigebiileiaatanekues 6

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988)......6, 10

Colorado River Water Conservation Dist. v. United _

Beaban,, SO6 Ee, BRO CIID vanevscstevscnevecssacenessntsvane 7, 12,14

Davis v. Joyner, 240 F. Supp. 689 (E.D.N.C. 1964)............ 6

Dittmer v. County of Suffolk, 146 F.3d 113 (2d Cir.

ctsduincintshishnidinssnncintjinceipinimaaiiaaishesslshuiaiientidndant 8, 11, 12

Exxon Corp. v. St. Paul Fire & Marine Ins. Co., 129

en Fe Ce SB inten sensicnisewbviiconcduovindanesinbiinbdianaaten 12

Federal Reserve Bank of Atlanta v. Thomas, 220

Fk TE CAR GE BD tisiscssciininescovtniivgnesienssabeniinastnle 12

Vv

TABLE OF AUTHORITIES — Continued :

Page

Golden Eagle Ins. Co. v. Travelers Cos., 103 F.3d

750 (9th Cir. 1996), overruled in part on other

grounds by Government Employees Ins. Co. uv.

Dizol, 133 F.3d 1220 (9th Cir. 1998) ...................eseeeeeeees 13

Huth v. Hartford Ins. Co. of the Midwest, 298 F.3d

RD ee I Ne indents Saheb ccttiehathctevisatentiotarninsiene 1, 5

International Bhd. of Elec. Workers Local 1357 v.

American Int'l Adjustment Co., Inc., 955 F. Supp.

1218 (D. Haw. 1997), aff’d, 142 F.3d 443 (9th Cir.

PIE iiakiicsiensngoeadanablenicebebailainilalibeimdanidetaheiaiiiiieautsabes 9,11

Jaffee v. Society of New York Hosp., 1997 WL

Ee URIs Bis, SUES seriideenriahsitasteinmsnteptenek tubbnsntiveastuaninl 12

Jamison v. Wiley, 14 F.3d 222 (4th Cir. 1994).................... 6 ’

Jefferson Ins. Co. of New York v. Lopez, 2000 WL

ek Fe Cas SAN: OD snissscsseisnndsnragcanebctebsiansisesasine 12

Kirkbride v. Continental Cas. Co., 933 F.2d 729 (9th

OI ee ekevtaisisinsesennatcnscizizacennnenssentsceibiccsibidiabdatiesaeine 8,11, 12

Michigan Tech Fund v. Century Natl Bank of

Broward, 680 F.2d 736 (11th Cir. 1982)....................0006 12

Myles Lumber Co. v. CNA Fin. Corp., 233 F.3d 821

CR I iiss ihitacecesheisceiptiitiansetibicaesictbialcitnlelibittaies 9

Piekarski v. Home Owners Sav. Bank, 743 F. Supp.

Fe Re MPO iiisicerdnichisinaddinsvidsctdenianibiinieckdeitbaiesis 9,11

Quackenbush v. Allstate Ins. Co., 517 U.S. 706

RI dankcstAstirenatsineiscbadumeissiubimnianechasneesiadngttaenenaniiwennons 10

Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S.

Se PU sara nec siivesecccncchna eas cesahinatsnsielsbialsadiaasiadnniaii 5,6

vi

TABLE OF AUTHORITIES — Continued

Page

Williams v. Green Bay & W.R. Co., 326 U.S. 549

CRG)... nasicesosicecscbessishedbeisiegiegebesecnedtihinaniolpveniicaiimiielninies 10

Wilton v. Seven Falls Co., 515 U.S. 277

Ca Pinsscossisnrivecncioestinnnissaianiciauiincaiiadinns 10, 11, 12, 13, 14

CONSTITUTIONAL AND STATUTORY PROVISIONS:

BEB SB cenistrvealns niente Oe iaencieninincnneiins 1

BOTS: Fai vitiivinsiscntasebiiiicentibiecemheteiidasssiisiitiiividens 3

BF ae Fe eititaticsscibisceentincnaiccidcignesnniidintiaacmninue 2,7

BB TE TIG.. BRIE insrirschiiccisiantucnsaivhet vias dinanianenciaeiantiaas 4

BB TERE, Be ircchsscaititeesscriscceneniahissonhvitniidnsibchiian 3, 5,6

BB TEAL, Be itd nein crane ttte econ ctaiainebitiaatearates 2

PBR TS. § UITIBE cere ecccsunssesivndsicraveninscvtgnncieninweaciitbiaoes 2, 11

1

PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully prays that a writ of certiorari

issue to review the judgment and opinion of the United

States Court of Appeals for the Ninth Circuit entered

July 30, 2002.

4

vv

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Ninth Circuit (App. 1) that gives rise to this petition is

published as Huth v. Hartford Insurance Co. of the Mid-

west, 298 F.3d 800 (9th Cir. 2002), and is reprinted at

Appendix 1. The District Court’s opinion staying the

federal declaratory judgment action and simuitaneously

remanding the state court declaratory judgment action

(App. 8) is not otherwise published. The Ninth Circuit’s

order denying rehearing and rehearing en banc (App. 15)

is not otherwise published.

, 4

vy

STATEMENT OF JURISDICTION

The judgment of the United States Court of Appeals

for the Ninth Circuit sought to be reviewed was entered on

July 30, 2002. Petitioner filed a timely Petition for Rehear-

ing and Rehearing En Banc on August 12, 2002, which

was denied on September 25, 2002. App. 15. The Court’s

jurisdiction is invoked under 28 U.S.C. § 1254(1).

+

2

STATUTORY PROVISIONS INVOLVED

The relevant provision of the Federal Declaratory

Judgment Act, 28 U.S.C. § 2201(a), provides in part:

(a) In a case of actual controversy within its ju-

risdiction ... any court of the United States,

upon the filing of an appropriate pleading,

may declare the rights and other legal rela-

tions of any interested party seeking such

declaration, whether or not further relief is

or could be sought. Any such declaration

shall have the force and effect of a final

judgment or decree and shall be reviewable

as such.

The relevant provision of the Arizona Declaratory

Judgment Act, A.R.S. § 12-1831, provides in part:

Courts of record within their respective jurisdic-

tions shall have the power to declare rights,

status and other legal relations whether or not

further relief is or could be claimed. No action or

proceeding shall be open to objection on the

ground that a declaratory judgment or decree is

prayed for. The declaration may be either af-

firmative or negative in form and effect; and such

declarations shall have the force and effect of a

final judgment or decree.

28 U.S.C. § 1441(a) provides in relevant part:

(a) Except as otherwise expressly provided by

Act of Congress, any civil action brought in

a State court of which the district courts of

the United States have original jurisdiction,

may be removed by the defendant or the de-

fendants, to the district court of the United

States for the district and division embrac-

ing the place where such action is pending.

3

28 U.S.C. § 1447(c) provides in relevant part:

(c) A motion to remand the case on the basis of

any defect other than lack of subject matter

jurisdiction must be made within 30 days

after the filing of the notice of removal un-

der section 1446(a). If at any time before fi-

nal judgment it appears that the district

court lacks subject matter jurisdiction, the

case shall be remanded.

+

STATEMENT OF THE CASE

Petitioner Hartford filed a federal declaratory judg-

ment action on October 31, 2000, in the United States

District Court for the District of Arizona. App. 16. Hartford

alleged that the federal district court had subject matter

jurisdiction under 28 U.S.C. § 1332 because defendant

Huth was a resident of Arizona, Hartford was an Indiana

corporation with its principal place of business in Indiana,

and the amount in controversy exceeded $75,000. App. 17.

Hartford asked the district court to declare that Catt Huth

was not entitled to underinsured motorist insurance

coverage benefits under a Hartford liability policy issued

to Gail Huth (Catt Huth’s mother) and Mary Sommers

because Catt Huth was not a resident of her mother’s

household. App. 18.

On October 31, 2000, the same day the federal de-

claratory judgment action was filed, Catt Huth’s counsel

accepted service of process. On November 8, 2000 (more

than a week later), Huth filed her own declaratory judg-

ment complaint in the Superior Court of Arizona for

Maricopa County. App. 20. This state declaratory judg-

ment was identical in al! material respects to Hartford’s

3

—

federal case, and presented the identical issue, asking for

a declaration that Catt Huth was entitled to uninsured

motorist insurance coverage benefits because she was a

resident of her mother’s household. App. 22.

Hartford removed Huth’s state court action to the

United States District Court for the District of Arizona

within the 30-day time limitation of 28 U.S.C. § 1446(b).

Removal of the Arizona declaratory judgment action was

based on diversity jurisdiction. Although Huth did not

request a specific amount of damages in her state declara-

tory judgment action, she has demanded the immediate

payment of Hartford’s first layer of coverage of $250,000

and is seeking additional coverage beyond that amount.

After Hartford’s removal of the Arizona declaratory

judgment action to federal district court, Huth filed a

motion to remand. She did not contend that removal was

improper because the removal procedures were defective.

She instead argued that removal was improper solely

because the action was an insurance coverage dispute

involving only state law issues. Huth also filed a motion to

either dismiss or stay the federal declaratory judgment

action based on this same premise. Hartford opposed these

motions because removal was based on diversity jurisdic-

tion and because there was no pending state court action

after that removal was effected.

By order entered April 5, 2001 (App. 8), the District

Court granted Huth’s motion to remand the Arizona

declaratory judgment action and also stayed the federal

declaratory judgment action pending resolution of the

remanded action in state court. App. 14.

Hartford appealed from the order remanding the

Arizona declaratory judgment action. In a published

5

decision issued on July 30, 2002, the Ninth Circuit af-

firmed the District Court’s order. Huth v. Hartford Ins. Co.

of the Midwest, 298 F.3d 800 (9th Cir. 2002). App. 1.

On August 12, 2002, Appellant Hartford filed a Peti-

tion for Rehearing En Banc in the Ninth Circuit, which

that court denied on September 25, 2002. App. 15.

7

v

REASONS FOR GRANTING THE PETITION

The Decision Below Expands The Abstention Doc-

trine To Allow A Remand Of An Action That Had

Been Properly Removed To Federal Court Under

Diversity Jurisdiction, And In So Doing Has Height-

ened An Existing Conflict Among The Circuits.

This petition concerns two identical cases — a federal

declaratory judgment action filed by petitioner Hartford,

and a reactive state declaratory judgment action filed one

week later by Huth. Because Huth’s Arizona state court

action involved complete diversity of citizenship, and the

amount in controversy was met, Hartford properly re-

moved it to federal court. But the federal district court, in

a maneuver sanctioned by the Ninth Circuit, first re-

manded the state court action on abstention grounds, and

then abstained from considering Hartford’s federal case on

the basis that the claim was better resolved in the “pend-

ing” state action.

Once a case is removed, only limited circumstances

will support a remand. Under 28 U.S.C. § 1447(c), only a

lack of subject matter jurisdiction or a defect in removal

procedures will typically suffice. See Thermtron Prods.,

Inc. v. Hermansdorfer, 423 U.S. 336, 345 (1976) (noting

that district court exceeded its authority “in remanding on

a 6

grounds not permitted by the controlling statute [28

U.S.C. § 1447(c)]”; see also Jamison v. Wiley, 14 F.3d 222,

239 (4th Cir. 1994) (holding that under 28 U.S.C.

§ 1447(c), remand of properly-removed case permitted only

where defect in removal procedure or lack of federal

subject matter jurisdiction present); Buchner v. F-D.I.C.,

981 F.2d 816, 819 (5th Cir. 1993). Therefore, “if jurisdiction

exists and was properly invoked, the Court has no discre-

tion to remand.” Burnette v. Godshall, 828 F. Supp. 1439,

1444 (N.D. Cal.. 1993); see also Davis v. Joyner, 240

F. Supp. 689, 690 (E.D.N.C. 1964) (observing that “where

Congress has provided both a state and a federal forum,

and has further provided for actions first brought in the

state court to be removed to the federal court, no discre-

tionary power exists to remand the case to state court”)

(quoting Vann v. Jackson, 165 F.Supp. 377 (E.D.N.C.

1959)).” :

Neither lack of subject matter jurisdiction nor a defect

in removal procedures was present here. There was

complete diversity of citizenship, and Huth never chal-

lenged the removal procedure. Her sole argument was

instead that the federal court should abstain because the

issue was better left to the state courts to resolve.

* This Court recognized in Carnegie-Mellon University v. Cohill,

484 U.S. 343 (1988), that a remand for discretionary reasons not set

forth in 28 U.S.C. § 1447(c) may at times be proper, although it

expressly noted that the District Court in Thermtron should not have

remanded because it “had no authority to decline to hear the removed

case. The Court had diversity jurisdiction over the case, which is not

discretionary.” 484 U.S. at 356. The Court has not addressed the issue,

also raised by the present case, of whether abstention is one of the

limited discretionary grounds for remand permitted by Cohill.

Se

This Court noted in Colorado River Water Conserva-

tion District v. United States, 424 U.S. 800 (1976), that

abstention from the exercise of federal jurisdiction should

be the exception, not the rule, and termed it “an extraor-

dinary and narrow exception to the duty of a District

Court to adjudicate a controversy properly-before it.” Id. at

813 (quoting County of Allegheny v. Frank Mashuda Co.,

360 U.S. 185 (1959)). The Court also noted the “virtually

unflagging duty” to exercise federal jurisdiction when-it

exists. Id. Although the Court in Colorado River ulti-

mately allowed abstention, it did so only because of “ex-

ceptional circumstances,” one of which was that a pending

state court action offered a more appropriate forum for

resolution of the dispute. Id. at 819 (listing factors weigh-

ing against concurrent federal proceedings). In the present

case, in contrast, there was no parallel state proceeding,

only the properly-removed Arizona action that was before

the District Court. The Ninth Circuit nevertheless held

that, even though the later-filed Arizona declaratory

judgment action had been properly removed to federal

court, and even though diversity jurisdiction was present,

the District Court was nevertheless free to treat it as a

“pending” state action by first remanding it, and then

abstaining in favor of it.”

* In this respect, the Ninth Circuit appears to be encouraging an

extreme form of forum shopping. Here, respondent Huth filed a state

court action identical in every material respect to Hartford’s first-filed

suit. And even though that state court suit was fully removable under

28 U.S.C. § 1441, the net result here is that the properly-removed

action has been remanded, and Hartford's first-filed action has been

stayed under the abstention doctrine.

8

The Ninth Circuit's decision below significantly

expands the abstention doctrine in a manner contrary to

decisions of at least two other Circuits, an earlier decision

from the Ninth Circuit itself, as well as decisions of this

Court. If it is allowed to stand, it could enable parties to

~avoid federal jurisdiction in virtually any declaratory

judgment case merely by filing a parallel state court case -

even a fully-removable one — and then arguing that the

federal court should remand the state case on abstention

grounds before also abstaining in the federal one.

The decision below conflicts directly with an earlier

Ninth Circuit decision, which held that a state action that

has been properly removed to federal court is not a pend-

ing state action for purposes of abstention. In Kirkbride v.

Continental Casualty Co., 933 F.2d 729 (9th Cir. 1991), the

state case had been removed in its entirety to federal

court. After the federal district court remanded the de-

claratory judgment action to state court based on the

abstention doctrine, the Ninth Circuit reversed. The court

observed that “[tJhe [abstention] doctrine is ‘available only

in situations involving the contemporaneous exercise of

concurrent jurisdictions, either by the federal courts or by

the state and federal courts.’” Id. at 734 (emphasis origi-

nal). The court held that the abstention doctrine was not

applicable because the entire case had been removed -to

federal court and thus “there was no concurrent or pend-

ing state court proceeding when” the motion for remand

was filed. Jd.

Other courts agree, including both the Second and

Fourth Circuits. See Dittmer v. County of Suffolk, 146 F.3d

113, 117-18 (2d Cir. 1998) (recognizing that abstention

could only be applied where there was the contemporane-

ous exercise of concurrent jurisdiction, which would not

iia |

9

include situation where case had been removed to federal

court); Myles Lumber Co. v. CNA Fin. Corp., 233 F.3d 821,

824-25 (4th Cir. 2000) (applying the abstention doctrine to

a state declaratory judgment action that had been prop-

erly removed to federal court and holding that because the

state action had been removed, there was no pending state

court action and this factor, along with others, dictated

against abstention). See also Piekarski v. Home Owners

Savings Bank, 743 F. Supp. 38, 42 (D.D.C. 1990) (finding

abstention doctrine was inapplicable because there was

only “one case, which originally was in state court, but now

has been properly removed to federal court”) (emphasis

original); International Bhd. of Elec. Workers Local 1357 v.

American Int'l Adjustment Co., Inc., 955 F.Supp. 1218,

1219 n.1 (D. Haw. 1997), aff’d, 142 F.3d 443 (9th Cir.

1998) (observing that there was no pending state action

where state action had been properly removed); Allstate

Ins. Co. v. Longwell, 735 F. Supp. 1187, 1191-92 (S.D.NY.

1990) (addressing facts almost identical to the present

case, and noting that “doctrines of abstention ... are

predicated on the existence of pending state litigation on

parallel issues, and, thus, are inapposite since there is no

longer anything pending in the state courts — both law-

suits are now here.”).

These cases suggest that the Ninth Circuit’s holding

below also conflicts with earlier decisions of this Court.

Simply stated, a state action that has been removed is no

longer a pending state case. Only by stretching the absten-

tion doctrine beyond recognition can abstention be used to

justify a remand of a properly-removed case. The effect of

the Ninth Circuit’s decision below is that jurisdiction in

removed cases based on diversity becomes discretionary —

even though a case is properly removed to federal court, it

10

nevertheless can be remanded on abstention grounds, and

then serve as a “pending” state action to support absten- _

tion in an otherwise proper federal action. But this Court

has already squarely rejected the notion that diversity

jurisdiction can be so easily ignored. See Cohill, 484 US.

at 356 (stating that diversity jurisdiction is “not discre-

tionary,” thereby precluding remand); see also Williams uv.

Green Bay & W.R. Co., 326 U.S. 549, 553-54 (1946) (hold-

ing that “t]he diversity jurisdiction was not conferred for

the benefit of the federal courts or to serve their conven-

ience. Its purpose was generally to afford to suitors an

opportunity in such cases, at their option, to assert their

rights in the federal rather than in the state courts’ ”).

Admittedly, a federal court has more discretion to

abstain when the action before it is based on the Federal

Declaratory Judgment Act. See, eg., Quackenbush uv.

Allstate Ins. Co., 517 U.S. 706, 716-19 (1996). But this

Court has never sanctioned abstention when no parallel

state court action exists. In fact, in Wilton v. Seven Falls

Co., 515 U.S. 277 (1995), the Court left open the exact

issue now raised, stating “[w]e do not attempt at this time

to delineate the outer boundaries of that discretion [to

abstain in declaratory judgment actions] in other cases, for

example, cases raising issues of federal law or cases in

which there are no parallel state proceedings.” Wilton, 515

U.S. at 290 (emphasis added). The Court’s earlier decision

in Brillhart v. Excess Insurance Co. of America, 316 U.S.

491 (1942), the decision on which the Ninth Circuit relied

below, had also discussed the extent of a federal district

11

court’s discretion to abstain in declaratory judgment

actions in favor of a pending state court action.’

It is one thing to abstain from hearing a federal

declaratory judgment action when an existing, non-

removable state court action is pending in which the issue

can be fully resolved, especially if the issue is solely one of

state law. It is quite another, however, to abstain where, as

here, there is no pending state court action at all. The

issue of a court’s discretion to abstain in the latter circum-

stance was expressly left open by the Court in — and

the Court should address it now.‘

As noted, a number of jurisdictions, as well as the

Ninth Circuit itself in an earlier opinion, have agreed that

there is no pending state proceeding once a state case has

been properly removed to federal court. See Kirkbride, 933

F.2d at 734; Dittmer, 146 F.3d at 117-18; International

Bhd. of Electrical Workers Local 1357, 955 F. Supp. at

1219 n.1; Piekarski v. Home Owners Savings Bank, 743

F. Supp. at 42; Longwell, 735 F. Supp. at 1192. These same

courts, as well as others, have further recognized that

* Brillhart abstention also applies only to the Federal Declaratory

Judgment Act, and should have no application to the removed state

court action here, which was based on the Arizona Declaratory Judg-

ment Act, where jurisdiction is mandatory rather than discretionary.

See A.R.S. § 12-1831; see also Kirkbride, 933 F.2d at 734-35 (specifically

rejecting the argument that a district court’s abstention was supported

by the “broader discretion afforded to trial courts to decline to exercise -

jurisdiction under the [Federal] Declaratory Judgment Act,” because

the case before it was a state decloratory judgment action removed to

federal court).

* The present case, of course, goes still further in using the

abstention doctrine in an effort to improperly create a pending state

court action in the first place.

12

Brillhart abstention is simply unavailable where there is

no parallel state proceeding. See Kirkbride, 933 F.2d at

734-35 (rejecting abstention because federal declaratory

judgment action not filed during pendency of state action);

Dittmer, 146 F.3d at 117-18 (Colorado River abstention

unavailable without parallel, concurrent state court

action); Jefferson Ins. Co. of New York v. Lopez, 2000 WL

33179290 (E.D. Cal. 2000) (holding that where there are

no parallel state proceedings, the Brillhart abstention

doctrine does not apply) (citing Maryland Cas. Co. v.

Knight, 96 F.3d 1284 (9th Cir. 1996)); Jaffee v. Society of

New York Hosp., 1997 WL 685347 (S.D.N.Y. 1997) (refus-

ing to apply the Brillhart abstention doctrine where there

are no parallel state proceedings); Michigan Tech Fund v.

Century Nat'l Bank of Broward, 680 F.2d 736, 742-43 (11th

Cir. 1982) (holding that the district court abused its

discretion in dismissing a federal declaratory judgment

action based on diversity jurisdiction where there was no

parallel case pending in the state court); Federal Reserve

Bank of Atlanta v. Thomas, 220 F.3d 1235, 1247 (11th Cir.

2000) (stating that “[i]t is an abuse of discretion, however, —

to dismiss a declaratory judgment action in favor of a state

court proceeding that does not exist”); Exxon Corp. v. St.

Paul Fire & Marine Ins. Co., 129 F.3d 781, 785 (5th Cir.

1997) (holding that the district court’s determination not

to stay the proceedings in federal court was well within its

discretion based on the fact that there were no parallel

state court proceedings). These cases are consistent with

the Court’s observation that under Brillhart “district

courts have substantial latitude in deciding whether to

stay or to dismiss a declaratory judgment suit in light of

pending state proceedings.” Wilton, 515 U.S. at 286 (em-

phasis added).

Se nee

13

- Still other courts have agreed with the Ninth Circuit’s

analysis below, and have suggested that federal courts

have ample discretion to abstain even in the absence of a

parallel state action. See, e.g., Aetna Cas. & Sur. Co. v.

Ind-Com Elec. Co., 1389 F.3d 419, 423 (4th Cir. 1998)

(holding that no parallel state action necessary to support

abstention in federal declaratory judgment action); Golden

Eagle Ins. Co. v. Travelers Cos., 103 F.3d 750, 754 (9th Cir.

1996) (citing Wilton and stating that “nothing in the

Declaratory Judgment Act requires a parallel state pro-

ceeding” to justify abstention), overruled in part on other

grounds by Government Employees Ins. Co. v. Dizol, 133

F.3d 1220 (9th Cir. 1998); Allstate Ins. Co. v. Seelye, 198

F. Supp. 2d 629, 632 (W.D. Pa. 2002) (holding that absence

of parallel state court proceeding is not determinative in

deciding whether to abstain from hearing federal declara-

tory judgment action); Board of County Comm’rs of the

County of Marchall v. Continental Western Ins. Co., 184

F. Supp. 2d 1117 (D. Kan. 2001) (acknowledging question

left open in Wilton, and applying the discretionary Brill-

hart standard to determine whether abstention proper

where no parallel state action existed). The varying

standards used in these cases only underscore the need to

delineate the proper standard of discretion for abstention

decisions when there are no parallel state proceedings.

This case squarely presents the issue of what, if any,

discretion a federal court has to abstain in a declaratory

judgment action when there is no pending state court case.

It is an issue, left open in Wilton, that has produced consid-

erable confusion in the lower courts. Where no parallel state

case exists, to what extent does a federal court have juris-

diction to abstain? Should a court reviewing an abstention

decision apply the discretionary standard of Brillhart, or

14

the “exceptional circumstances” test of Colorado River,

when there is no pending state case?

The decision below expands the abstention doctrine to

thwart otherwise proper federal jurisdiction. It also

purports to answer the question left open by the Court in

Wilton, and in so doing, it conflicts with decisions from at

least two other Circuits, an earlier Ninth Circuit decision,

as well as decisions of this Court. The Court should grant

certiorari to clarify the law on this important aspect of

federal jurisdiction.

>

v

CONCLUSION

The Petition for Writ of Certiorari should be granted.

Alternatively, the Court should grant certiorari and

summarily reverse.

Respectfully submitted,

STEVEN PLITT

Counsel of Record

SHUGHART THOMSON KILROY

GOODWIN Ravp, P.C.

3636 North Central Ave.,

Suite 1200

Phoenix, AZ 85012

Telephone: (602) 650-2000

Facsimile: (602) 264-7033

Attorney for Petitioner

App. 1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CaTT MICHELE HUTH, an

individual,

Plaintiff-Appellee, ga pt

% CV-00-02345-MHM

THE HARTFORD INSURANCE OPINION

COMPANY OF THE MIDWEST, an

Indiana corporation,

Defendant-Appellant.

Appeal from the United States District Court

for the District of Arizona

Mary H. Murguia, District Judge, Presiding

Argued and Submitted

June 13, 2002 — San Francisco, California

Filed July 30, 2002

Before Donald P. Lay,’ David R. Thompson and

Richard C. Tallman, Circuit Judges.

Opinion by Judge Lay

COUNSEL

Steven Plitt and Daniel Maldonado, Sanders & Parks

Phoenix, Arizona, for the defendant-appellant.

* The Honorable Donald P. Lay, Senior United States Circuit Judge

for the Eighth Circuit, sitting by designation.

App. 2

G. David Gage, Gage & Mathers, Phoenix, Arizona, for the

plaintiff-appellee.

OPINION

LAY, Circuit Judge:

On October 31, 2000, Hartford Insurance Company

filed a federal declaratory judgment action seeking a

declaration that Catt Michele Huth is not entitled to

underinsured motorist benefits under her mother’s policy

because she was not a resident of her mother’s household

at the time of her automobile accident. On November 8,

2000, Huth filed a similar declaratory judgment action in

Arizona state court claiming she is entitled to benefits.

Hartford removed the state action to federal district court

on the basis of diversity jurisdiction. 28 U.S.C. § 1332

(2002). The two cases were then consolidated.

Huth filed a motion to remand the removed state

court action and to stay Hartford’s federal action. She

urged the district court to decline jurisdiction under the

Federal Declaratory Judgment Act, 28 U.S.C. § 2201(a)

(2002). The district court granted Huth’s motion. Hartford

timely appealed.

Analysis

Appellate Jurisdiction

As a general rule, “[aJn order remanding a case to the

State court from which it was removed is not reviewable

on appeal or otherwise.... ” 28 U.S.C. § 1447(d) (2002).

Huth, however, does not challenge subject matter jurisdic-

tion or the validity of the removal procedures. Appellate

App. 3

review of the remand order, therefore, is appropriate. See

Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-12

(1996) (“‘{Section] 1447(d) must be read in pari materia

with § 1447(c), so that only remands based on grounds

specified in § 1447(c) are immune from review under

§ 1447(a).... ’”) (citation omitted). The district court’s

order is effectively a “final order;” it places Hartford “out

of [federal] court” and has the effect of “surrender[ing]

jurisdiction of a federal suit to 4 state court.” Snodgrass v.

Provident Life & Accident Ins. Co., 147 F.3d 1163, 1166

(9th Cir. 1998). We hold we have jurisdiction under 28

U.S.C. § 1291. See Quackenbush, 517 U.S. at 711-12.

Section 2201 Jurisdiction

The exercise of jurisdiction under the Federal De-

claratory Judgment Act, 28 U.S.C. § 2201(a), is committed

to the sound discretion of the federal district courts. See,

e.g., Wilton v. Seven Falls Co., 515 U.S. 277, 282-83 (1995);

Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494-95

(1942); Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220,

1223 (9th Cir. 1998) (en banc). Even if the district court

has subject matter jurisdiction, it is not required to exer-

cise its authority to hear the case. See Dizol, 133 F.3d at

1223.

A. No Pending State Action

Hartford argues the absence of a pending state action

precludes a district court from declining discretionary

jurisdiction. It urges that a district court declining juris-

diction in the absence of a pending state proceeding

ignores the purpose of granting district courts discretion.

Cf. Town of Lockport, N.Y. v. Citizens for Cmty. Action at

App. 4

the Local Level, Inc., 430 U.S. 259, 264 n.8 (1977)

(“[Plrinciples of comity ... do not require that a federal

court abandon jurisdiction it has properly acquired simply

because a similar suit is later filed in a state court.”).

However, as we discuss, there are other balancing factors

the district court must weigh. This inquiry is for the

district court in the first instance. See-Wilton, 515 U.S. at

289 (“We believe it is more consistent with the statute to

vest district courts with discretion in the first instance,

because facts bearing on the usefulness of the declaratory

judgment remedy, and the fitness of the case for resolu-

tion, are peculiarly within their grasp.”). It falls to the

appellate courts only to determine whether a district court

abused its discretion under the circumstances of the given

case. Id.

Hartford also notes that we have stated that “there is

no presumption in favor of abstention in declaratory

actions generally, nor in insurance coverage cases specifi-

cally.” Dizol, 133 F.3d at 1225. From this statement,

Hartford argues the district court must retain jurisdiction

when there is no pending state action.

As the district court noted, however, the Dizol court

explicitly limited its holding. It held only that a district

court need not decide sua sponte whether jurisdiction

under § 2201(a) should be declined, and that the appellate

court need not decide sua sponte whether the district court

abused its discretion in exercising discretionary jurisdic-

tion. Id. at 1227. Moreover, the Dizol court qualified its

language by noting that “when other [non-discretionary]

claims are joined with an action for declaratory relief... ,

the district court should not, as a general rule, remand or

decline to entertain the claim for declaratory relief... [in

order] to avoid piecemeal litigation.” Jd. at 1225. The court

App. 5

observed the general rule of discretion: “But these are

considerations for the district court, which is in the best

position to assess how judicial economy, comity and feder-

alism are affected in a given case.” Jd. at 1226.

Equally important is the fact that Hartford’s favored

language does not support its proposition. The fact that

there is no presumption in favor of declining jurisdiction

does not prove there is a presumption in favor of retaining

jurisdiction. The simpler reading is that the language

_ merely affirms the well-accepted rule that the decision

whether to exercise jurisdiction over a declaratory action

lies in the sound discretion of the district court.

B. Abuse of Discretion

Brillhart sets forth the primary factors for considera-

tion. A district court should avoid needless determination

of state law issues; it should discourage litigants from

filing declaratory actions as a means of forum shopping;

and it should avoid duplicative litigation. Dizol, 133 F.3d

at 1225. These factors, however, are not necessarily

exhaustive. See Am. States Ins. Co. v. Kearns, 15 F.3d 142,

145 (9th Cir. 1994) (Garth, J., concurring).

The district court’s discretion is not unfettered. “[A]

District Court cannot decline to entertain such an action

as a matter of whim or personal disinclination.” Dizol, 133

F.3d at 1223 (quoting Public Affairs Assocs. v. Rickover,

369 U.S. 111, 112 (1962)). Likewise, “if a party properly

raises the issue in the district court, the district court

must make a sufficient record of its reasoning to enable

appropriate appellate review.” Jd. at 1225. In its Order, the

district court stated its reasoning under each Brillhart

factor in satisfaction of the requirement that the court

App. 6

make a record of its reasoning sufficient to allow review.

The only question is whether the district court’s rationale

satisfies Brillhart.

The district court held that “avoiding duplicative

litigation” favored neither party; we agree. The case will

be disposed of entirely either in state or federal court,

depending upon the outcome of this appeal. Absent a

presumption either in favor of or against the district

court’s exercise of discretionary jurisdiction, the district

court did not abuse its discretion by determining this

factor was a wash.

The district court also found that “avoiding forum

shopping” favored neither party, noting Huth merely

preferred state resolution while Hartford preferred federal

resolution. Again, we agree. Admittedly, Hartford filed

first, and in Dizol we noted, “federal courts should gener-

ally decline to entertain reactive declaratory actions.” Jd.

Yet, there is no question that both parties seek declaratory

relief, and the fact that Hartford won the race to the

courthouse by several days does not place it in a preferred

position. In Wilton, the Court suggested that the order of

filing is legally insignificant when it ruled in favor of a

state action filed several weeks after a federal action.

Wilton, 515 U.S. at 279-80, 290. In light of these considera-

tions, we cannot hold the district court abused its discre-

tion in its analysis of this factor.

Finally, the district court noted that both the federal

and state actions involve the same purely state law issue.

It held that state court would be the preferable forum.

Hartford argues the district court erred because no “excep-

tional circumstances” justify abstention. “Exceptional

App. 7

circumstances,” however, is not the standard for discre-

tionary jurisdiction under 28 U.S.C. § 2201. Wilton, 515

U.S. at 286-88 (distinguishing Colorado River Water

Conservation Dist. v. United States, 424 U.S. 800, 810-20

(1976)). Admittedly, there is no great need for state court

resolution of an open question of state law in this case.

Yet, without a presumption in favor of retaining jurisdic- '

tion, we cannot find that the district court abused its

discretion by declining jurisdiction.

Judgment AFFIRMED.

App. 8

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

HARTFORD INSURANCE ._) No. CIV 00-2067-PHX-MHM

COMPANY OF THE ) No. CIV 00-2345-PHX-MHM

MIDWEST, ORDER

Plaintiff, ) (Filed Apr. 05, 2001)

VS.

CATT MICHELE HUTH,

Defendant.

CATT MICHELE HUTH,

Plaintiff,

Vs.

HARTFORD INSURANCE

COMPANY OF THE

MIDWEST,

Defendant.

Nome Nee eee eee ee a Se”

On October 31, 2000, Hartford Insurance Company of

the Midwest (“Hartford”) filed a federal declaratory judg-

ment suit (the “Hartford action”) against Catt Michele

Huth (“Huth”). On November 8, 2000, Huth filed a parallel

‘declaratory action against Hartford in state court (the

“Huth action”); Hartford removed. The cases have been

consolidated by agreement before this court.

Huth now moves to dismiss, stay, or remand the

Hartford action and to remand the Huth action. The court

heard oral argument on March 27, 2001. Having carefully

considered the parties’ argument, the court now grants

Huth’s motions.

=

App. 9

I. Background

In November 1999, Hutch sustained injuries in an

automobile accident. She submitted a claim for underin-

sured motorist benefits under her mother’s insurance

policy with Hartford. The sole question raised in both

declaratory judgment actions is whether Huth was a

resident of her mother’s household such that she would be

a qualified insured under her mother’s policy. The parties

agree that Arizona law will answer this question.

II. Discussion

The Hartford action rests upon diversity jurisdiction

and the Federal Declaratory Judgment Act (“FDJA”).

Removal of the Huth action was predicated upon diversity.

Huth emphasizes that jurisdiction under the FDJA is

discretionary and that Ninth Circuit policy favors state

court resolution of declaratory judgment actions regarding

insurance coverage disputes. She therefore advocates

remand of the Huth action and dismissal or staying of the

Hartford action. Hartford counters that diversity alone

justifies federal resolution and, further, that there is not a

Ninth Circuit presumption in favor of abstention in

insurance coverage cases.

Under the FDJA, federal courts may declare an

interested party’s legal rights. See 28 U.S.C. § 2201(a). A

court has discretion to decline jurisdiction. See Wilton v.

Seven Falls Co., 515 U.S. 277, 288 (1995) (“By the Declara-

tory Judgment Act, Congress sought to place a remedial

arrow in the district court’s quiver; it created an opportu-

nity, rather than a duty, to grant a new form of relief to

qualifying litigants.”). In determining whether to decline

or maintain jurisdiction, the court should consider its

App. 10

ability (1) to avoid needless determination of state law

issues, (2) to discourage litigants from filing declaratory

actions as a means of forum shopping, and (3) to avoid

duplicative litigation. See Chamberlain v. Allstate Ins. Co.,

931 F.2d 1361, 1367 (9th Cir. 1991) (citing Brillhart v.

Excess Ins. Co., 316 U.S. 491 (1942)).’

Huth cites several Ninth Circuit cases for the proposi-

tion that federal courts should decline jurisdiction over

insurance coverage disputes that raise only state law

issues: Budget Rent-A-Car v. DeCoite, 113 F.3d 1132, 1134

(9th Cir. 1997); Employers Reinsurance Corp. v. Karussos,

65 F.3d 796, 799 (9th Cir. 1995); American Nat'l Fire Ins.

Co. v. Hungerford, 53 F.3d 1012, 1019 (9th Cir. 1995).

Hartford argues these cases have “been effectively over-

ruled” and rests on contrasting language in Government

Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir.

1998) (en banc), whether the court wrote:

... there is no presumption in favor of absten-

tion in declaratory actions generally, nor in in-

surance coverage cases specifically. “We know of

no authority for the proposition that an insurer

is barred from invoking diversity jurisdiction to

* The Ninth Circuit has suggested numerous other potential

considerations. For example, “whether the declaratory action will settle

all aspects of the controversy; whether the declaratory action will serve

a useful purpose in clarifying the legal relations at issue; whether the

declaratory action is being sought merely for the purposes of procedural

fencing or to obtain a ‘Tes judicata’ advantage; or whether the use of a

declaratory action will result in entanglement between the federal and

state court systems. In addition, the district court might also consider

the convenience of the parties, and the availability and relative

convenience of other remedies.” American States Ins. Co. v. Kearns, 15

F.3d 142, 145 (9th Cir. 1994) (J. Garth, concurring).

App. 11

bring a declaratory judgment action against an

insured on an issue of coverage.”

Id. (quoting Aetna Cas. & Sur. Co. v. Merritt, 974 F.2d

1196, 1199 (9th Cir. 1992)).

Hartford argues that Dizol overrules DeCoite, Karus-

sos, and Hungerford in their entivety. This Court dis-

agrees. Dizol focused on whether courts must sua sponte

discuss retention or refusal of jurisdiction under the

FDJA. Id. at 1222-25. In an en banc decision, the court

found no such obligation. Id. at 1224-25. The court went on

to state that when a party properly questions jurisdiction,

courts should discuss the issue in accordance with the

Brillhart factors.’ Id. at 1225-27. In conclusion, the court

only overruled those portions of DeCoite, Karussos, Hun-

gerford, and other cases, which made “suggestions to the

contrary.” Id. at 1227.

This Court, however, must still address the Dizol-

language that appears to deny the existence of any pre-

sumption in favor of abstention in insurance coverage

cases. The statements arise during the Dizol Court’s

discussion of the Brillhart factors. The Dizol Court clari-

fied that “there is no presumption in favor of abstention in

declaratory actions generally, nor insurance coverage

cases specifically.” Jd. at 1225. In fact, the Dizol Court

noted that courts ordinarily should not decline jurisdiction

where an independent basis for federal diversity jurisdic-

tion exists, such as bad faith, breach of contract or fiduci-

ary duty, recission, or claims for monetary relief. Dizol,

183 F.3d at 1225. It concluded that the district court

* See, supra, footnote 1 and accompanying test.

App. 12

should evaluate these considerations in a Brillhart analy-

sis. While the Dizol Court clarified that there is no pre-

sumption in favor of abstention in insurance coverage

cases, it reiterated that “[t]he Brillhart factors remain the

philosophic touchstone for the district court” and that

district courts are “in the best position to assess how

judicial economy, comity and federalism are affected in a

given case.” Id. at 1225, 1226.

While there may not be a presumption of abstention in

insurance coverage declaratory action, this Court finds

abstention is still appropriate under the Brillhart analysis.

A. State Law Issues

The parties agree that state law will answer the sole

question raised in both declaratory judgment actions. The

only dispute in both actions is Ms. Huth’s residence at the

time of collision. This is a fact intensive question governed

by Arizona law. Furthermore, there are no additional

claims attached to either declaratory judgment action that

would require this matter to proceed in federal court. Each

action raises one issue (the same issue), resting exclu-

sively on state law. |

B. Forum Shopping

This factor weighs in neither party's favor. Hartford

desires federal resolution, Huth seeks state resolution.

Both seek the forum perceived as more advantageous.”

* Hartford asks the court to place great weight on the fact that

Huth filed her state court action after notice of Hartford's federal suit.

(Continued on following page)

App. 13

C. Duplicative Litigation

This factor also weighs in neither party’s favor. If this

Court remands the Huth action, the relevant issue could

be decided in state court and a federal action would be

unnecessary. Similarly, if this Court declines to remand,

all issues would be consolidated in federal court.

III. Conclusion

It is within this Court’s discretion to decline jurisdic-

tion of actions arising under the FDJA. The parties agree

that both declaratory judgment actions rest exclusively on

state law and that no other claims are joined with the

actions. Both cases are in the early stages of the judicial

process and declining jurisdiction at this point will not

result in a waste of time or resources for the parties or the

courts. The state court action‘ involves the same parties as

the federal action, and the state court can resolve all the

issues raised in the federal action. As the only dispute in

the case is a question of Arizona law and because there is

no additional basis for federal jurisdiction, this Court finds

that state court is the more appropriate forum. Accord-

ingly,

The court notes that timing is legally insignificant given Wilton, in

which the court upheld staying a federal action in favor of the state

action which was filed one month later. 515 U.S. at 280.

* Hartford argues there is no state court action as it has been

removed to federal court. The Court does not find this argument

persuasive. Clearly CIV-00-2345 began in state court. Once this court

decides to remand the action the case will proceed in state court rather

than federal court. Hartford can not avoid the Court’s jurisdictional

discretion under the FDJA by removing a state court action and then

arguing no state court action exists.

App. 14

IT IS ORDERED denying Huth’s motion to dismiss

(doc. 6 in 00-2607), but granting Huth’s motion to stay

(doc. 6 in 00-2067); and

IT IS FURTHER ORDERED granting Huth’s

motion to remand (doc. 2 in 00-2345).

IT IS FINALLY ORDERED directing the Clerk of

the Court to remand case 00-2345 to the Superior Court of

Maricopa County.

DATED this 3rd day of April, 2001.

/s/ Mary H. Murguia

Mary H. Murguia

United States District Judge

I hereby attest and certify on 4-5-

01 that the foregoing document is

a full, true and correct copy of the

original on file in my office and in

my custody.

CLERK U. S. DISTRICT COURT

DISTRICT OF ARIZONA

By /s/ [Tllegible] Deputy

App. 15

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CATT MICHELE HUTH, an | No. 01-16294

individual, D.C. No.

Plaintiff-Appellee, CV-00-02345-MHM

v. ORDER

HARTFORD INSURANCE | (Filed Sep. 25, 2002)

COMPANY OF THE

MIDWEST, an Indiana

corporation,

Defendant-Appellant.

Before: LAY, THOMPSON and TALLMAN, Circuit

Judges.

The panel has voted to deny the petition for panel

rehearing and to deny the petition for rehearing en banc.

The full court has been advised of the petition for

rehearing en banc and no judge has requested a vote on

whether to rehear the matter en banc. Fed. R. App. P. 35.

The petition for panel rehearing and the petition for

rehearing en banc are denied.

" The Honorable Donald P. Lay, Senior United States Circuit

Judge for the Eighth Circuit, sitting by designation.

App. 16

Steven Plitt, Esq. (State Bar No. 007481)

Brian E. Cieniawski, Esq. (State Bar No. 013185)

Daniel Maldonado, Esq. (State Bar No. 018483)

SANDERS & PARKS, P.C.

3030 North Third Street, Suite 1300

Phoenix, AZ 85012-3099

Telephone: (602) 532-5600

Facsimile: (602) 532-5700

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Hartford Insurance Company, No. CV ’00 2067 PHX MS

of the Midwest, a Indiana COMPLAINT FOR

corporation, _| DECLARATORY

Plaintiff, JUDGMENT RELIEF

= AND DEMAND FOR

JURY TRIAL

Catt Michele Huth, an ’

‘ndivteal (Filed Oct. 31, 2000)

Defendant.

Plaintiff Hartford Insurance Company of the Midwest

(“Hartford”) alleges as follows:

I.

This action is brought pursuant to 28 U.S.C. §2201 et

seqg., the Federal Declaratory Judgment Act, and demand

for jury trial is hereby made.

App. 17

II.

Plaintiff Hartford is a Indiana corporation with its

principal place of business in the state of Indiana.

Ill.

Defendant Catt Michelle Huth, upon information and

belief, is a resident of the County of Coconino, State of

Arizona.

IV.

This Court has jurisdiction over the parties and

subject matter of this litigation pursuant to 28 U.S.C.

§1332, because there is diversity of citizenship and more

than $75,000 in controversy.

V.

Hartford issued an insurance policy for Mary Som-

mers and Gail Huth bearing policy number 55

PAE461320. The Hartford policy provided insurance

coverage subject to applicable conditions and limitations.

VI.

On or about November 27, 1999 Defendant Catt

Michele Huth was involved in a motor vehicle accident at

the intersection of 83rd Avenue and Olive Avenue, in the

city of Peoria, Maricopa County, State of Arizona. As a

result of the motor vehicle accident, Defendant Huth

sustained bodily injury for which she has made a claim

upon Hartford for underinsured motorist coverage benefits

under the Hartford policy (Policy No. 55 PAE461320)

issued to Gail Huth. Defendant Huth has alleged that she

is a resident of her mother’s household and, therefore, is a

qualified insured for underinsured motorist coverage

under the Hartford policy (Policy No. 55 PAE461320).

App. 18

Vil.

Defendant Huth was not a resident of Gail Huth’s

household at the time of the. accident and, therefore, does

not qualify for underinsured motorist coverage benefits

under Hartford’s policy (Policy No. 55 PAE461320).

VIII.

Hartford is entitled to a judgment against Defendant

Huth declaring that there is no coverage under the Hart-

ford policy for the automobile accident which occurred on

November 27, 1999 and the resulting injuries.

IX.

A justiciable controversy exists as to whether or not

Hartford’s policy provides underinsured motorist coverage

benefits for Defendant Huth and Hartford does hereby

request this Court to exercise its jurisdiction under 28

U.S.C. §2201 et. seg., the Federal Declaratory Judgments

Act, to adjudicate and declare Hartford’s obligations under

the Hartford policy.

X.

This action arises out of contract, entitling Hartford to

an award of reasonable attorney’s fees pursuant to A.R.S.

§ 12-341.01.

XI.

Hartford does hereby demand that this matter be

resolved by jury trial.

WHEREFORE, Plaintiff Hartford Insurance Com-

pany of the Midwest prays for judgment against Defen-

dant Catt Michelle Huth adjudicating and declaring:

App. 19

(1) That there is no coverage under Hartford’s policy

issued to Gail Huth (Policy No. 55 PAE461320);

(2) For attorney’s fees incurred herein pursuant to

A.R.S. § 12-341.01;

(3) For an award of costs incurred herein; and

(4) For such other and further relief as this Court

deems just under the premises.

DATED this 31st day of October, 2000..

SANDERS & PARKS, P.C.

By: /s/ Steven Plitt

Steven Plitt

Brian E. Cieniawski

Daniel Maldonado 5

3030 N. Third Street,

Suite 1300

Phoenix, AZ 85012-3099

Attorneys for

Plaintiff Hartford

ORIGINAL and ONE COPY

filed with the Clerk this 31st day

of October, 2000

... and a COPY mailed to:

Martin H. Mathers, Esq.

GAGE & MATHERS, LTD.

2 North Central, Suite 1125

Phoenix, AZ 85004-2353

Attorneys for Defendant Huth

/s/ Stacey Shirer

App. 20

G. David Gage, Esq., #1584

GAGE & MATHERS, LTD.

One Renaissance Square, Suite 1125

Two North Central Avenue —

Phoenix, AZ 85004-2353

(602) 258-2102 FAX (602) 258-8287

Attorneys for Plaintiff

SUPERIOR COURT OF ARIZONA

COUNTY OF MARICOPA

CATT MICHELE HUTH, an ) No. CV2000-020189

Individual, ) COMPLAINT FOR

Plaintiff, DECLARATORY

<s ) JUDGMENT RELIEF

AND DEMAND FOR

HARTFORD INSURANCE ) JURY TRIAL

ANY )

awier ps aio as ) (Other Civil-Declaratory

corporation, ) Judgment)

)

Defendant. )

Plaintiff Catt Michele Huth, an individual, alleges as

follows:

I.

This action is brought pursuant to A.R.S. § 12-1831 et.

seq., the Arizona Uniform Declaratory Judgments Act, and

demand for jury trial is hereby made.

IT.

Defendant Hartford Insurance Company of the Mid-

west is an Indiana corporation with its principal place of

business in the State of Indiana.

App. 21

Ill.

Plaintiff Cat Michele Huth is a resident of the county

of Maricopa, State of Arizona.

IV.

This Court has jurisdiction over the parties and

subject matter of this litigation because this action for

declaratory judgment pertains to whether there is cover-

age under an insurance policy issued under the laws of the

State of Arizona by Defendant relative to Plaintiff, a

resident of Maricopa County, who is an insured under the

policy in question, relative to a Maricopa County, ne,

motor vehicle accident.

V.

Hartford issued an insurance policy for Mary Som-

mers and Gail Huth bearing policy number 55

PAE461320. The Hartford policy provided insurance

coverage subject to applicable conditions and limitations.

VI.

On or about November 27, 1999 Plaintiff Catt Michele

Huth was involved in a motor vehicle accident at the

intersection of 83rd Avenue and Olive Avenue, in the city

of Peoria, Maricopa County, State of Arizona. As a result

of the motor vehicle accident, Plaintiff Catt Michele Huth

sustained bodily injury for which she has made a claim

upon Hartford for underinsured motorist coverage benefits

under the Hartford policy (Policy No. 55 PAE461320)

issued to Gail Huth. Plaintiff Catt Michele Huth was then

a resident of her mother’s (Gail Huth’s) household, and,

therefore, is a qualified insured for underinsured motorist

coverage under the Hartford policy (Policy No. 55

PAE461320).

App. 22

VIL.

Plaintiff Catt Michele Huth was a resident of Gail

Huth’s household at the time of the accident and, therefore,

does qualify for underinsured motorist coverage benefits

under Hartford’s policy (Policy No. 55 PAE461320).

VII.

Plaintiff Catt Michele Huth is entitled to a judgment

against Defendant Hartford declaring that she is covered

for underinsured coverage under the Hartford policy for

the automobile accident which occurred on November 27,

1999 and the resulting injuries.

IX.

A justiciable controversy exists as to whether or not

Hartford’s policy provides underinsured motorist coverage

benefits for Plaintiff Catt Michele Huth who does hereby

request this Court to exercise its jurisdiction under A.R.S.

§ 12-1831, et seg., the Arizona Uniform Declaratory Judg-

merits Act to adjudicate and declare the rights and obliga-

tions of the parties under the Hartford policy.

X.

This action arises out of contract, entitling Plaintiff

Catt Michele Huth to an award of reasonable attorney’s

fees pursuant to A.R.S. § 12-341.01.

XI.

Plaintiff Catt Michele Huth does hereby demand that

this matter be resolved by jury trial.

WHEREFORE, Plaintiff Catt Michele Huth prays for

judgment against Defendant Hartford adjudicating and

declaring:

App. 23

(1) That the underinsured coverage under Defendant

Hartford’s policy extends to and covers Plaintiff Catt

Michele Huth (Policy No. 55 PAE461320);

(2) For attorney’s fees incurred herein pursuant to

A.R.S. § 12-341.01;

(3) For an award of costs incurred herein; and

(4) For such other and further relief as this Court

deems just under the premises.

DATED November 8th, 2000.

GAGE & MATHERS, LTD.

By /s/ G. David Gage

G. DAVID GAGE

2 North Central, Suite 1125

Phoenix, AZ 85004-2353

Attorneys for Plaintiff

Catt Michele Huth