IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
______________________________________
No. 98-60084
(Summary Calendar)
______________________________________
NORTHFIELD INSURANCE COMPANY,
Plaintiff-Appellee,
versus
JOHN DALE ADAMS, doing business as
Rockets Secrets Cabaret; ET AL
Defendants
CHADRICK J. BROWN
Defendant-Appellant
______________________________________________________________
Appeal from the United States District Court
For the Southern District of Mississippi
(97-CV-127)
______________________________________________________________
September 8, 1998
Before JOLLY, SMITH and WIENER, Circuit Judges.
Per Curiam*
In this declaratory judgment action, Defendant-Appellant Chadrick J. Brown appeals the
rulings of the district court denying his motion to dismiss and granting summary judgment in favor
of Plaintiff-Appellee Northfield Insurance Company (“Northfield”). Concluding that the district court
did not abuse its discretion in retaining jurisdiction over Northfield’s action and did not err in holding
that, as a matter of law, Brown’s claims are excluded from coverage under Northfield’s policy, we
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published
and is not precedent except under the limited circumstances set forth in 5th cir. R. 47.5.4.
affirm.
I
FACTS AND PROCEEDINGS
This act ion arises out of an altercation that allegedly occurred on the premises of Rockets
Secrets Cabaret (the “Cabaret”) in Jackson, Mississippi. Chadrick Brown and Roderick Johnson filed
separate suits in Mississippi state court against their alleged assailant, Cabaret employee Gary Havens,
and Cabaret owner John Dale Adams, seeking damages for injuries sustained in the fracas. According
to allegations made by Brown and Johnson in their co mplaints, Havens “intentionally, willfully,
unlawfully, wantonly, recklessly, grossly negligently, and/or negligently and with excessive force,
attacked [plaintiffs] causing serious bodily harm to [plaintiffs],” and “intentionally, willfully,
unlawfully, wantonly, recklessly, forcibly, grossly negligently, and/or negligently and unreasonably
threatened [plaintiffs] with severe bodily harm.” Brown and Johnson further charged that Adams was
vicariously liable for the acts of his employee and that Adams was himself guilty of “intentional,
willful, unlawful, wanton, reckless, grossly negligent, and/or negligent acts and/or omissions.”
At the time that Brown and Johnson sustained their injuries, the Cabaret carried a commercial
liability policy issued by Northfield Insurance Company, putatively insuring Adams as owner and
Havens as an employee. Upon receiving notice of the state court actions, Adams and Havens made
demand on Northfield for defense and indemnity in connection with those lawsuits. Northfield agreed
to provide a defense subject to its reservation of rights on the issue of coverage.
During the pendency of the state court actions, Northfield filed the instant suit in federal
district court seeking a declaration that, by virtue of the language in its policy, Brown’s and Johnson’s
2
claims are not within the scope of coverage and that, consequently, Northfield is not obligated to
provide a legal defense for Havens and Adams or indemnify them against these claims. Northfield
named as defendants its two insureds, Havens and Adams, as well as state court tort claimants Brown
and Johnson. All dist rict court defendants are citizens of Mississippi, Northfield is a citizen of
Minnesota, and the amount in controversy exceeds $75,000.00 exclusive of interest and costs. Thus,
subject matter jurisdiction in the district court rests on diversity of citizenship.
In response to Northfield’s complaint, Brown and Johnson filed motions to dismiss, arguing
that because each has a case pending in state court involving the same facts as Northfield’s action,
the district court should exercise its discretion to abstain from hearing the declaratory judgment suit.
The district court denied the motions.
Thereafter, Northfield filed a motion for summary judgment, maintaining that the various
claims asserted in Brown’s and Johnson’s state court suits against Havens and Adams are excluded
from coverage by its policy. Northfield submitted summary judgment evidence that its policy
contained an exclusion for property damage and bodily injury arising out of assault and battery. The
exclusion reads as follows:
This insurance does not apply to “bodily injury,” “property damage,”
“personal injury,” “advertising injury,” or medical expense arising out of
assault and battery or out of any act or omission in connection with the
prevention or suppression of such acts, whether caused by or at the
instigation of the insured, his employees, patrons or any other person.
The only defendant to respond to Northfield’s summary judgment motion was Brown. After
considering the motion, together with Brown’s response, the district court granted summary
judgment in favor of Northfield. Brown timely filed a notice of appeal.
3
II
ANALYSIS
A. Standard of Review
We review a district court’s exercise of discretion in a Declaratory Judgment Act case under
the abuse of discretion standard.1 We review a grant of summary judgment de novo, applying the
same standard as the District Court.2
B. Applicable Law
1. Discretionary Jurisdiction
The Declaratory Judgment Act provides that “[i]n a case of actual controversy within its
jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of
any interested party seeking such declaration.”3 Although this statute vests the federal courts with
power and co mpetence to issue a declaration of rights, a district court has discretion whether to
exercise this power in any particular case or to abstain.4 The district court’s discretion in this matter
is broad, but not unfettered.5 Unless the district court “addresses and balances the purposes of the
Declaratory Judgment Act and the factors relevant to the abstention doctrine on the record, it abuses
its discretion.”6
1
See Wilton v. Seven Falls Co., 515 U.S. 277, 289 (1995).
2
See Knight v. United States Fidelity & Guar. Ins. Co., 65 F.3d 34, 36 (5th Cir. 1995), cert. denied,
517 U.S. 1134 (1996).
3
28 U.S.C.A. § 2201(a).
4
See Wilton, 515 U.S. at 286.
5
See Travelers Ins. Co. v. Louisiana Farm Bureau Fed’n, 996 F.2d 774 (5th Cir. 1993).
6
Id.
4
Two principal criteria that, if found to be present, weigh in favor of a district court’s decision
to entertain a declaratory judgment action are that the judgment will (1) serve a useful purpose in
clarifying and settling the legal relations in issue, and (2) terminate and afford relief from the
uncertainty, insecurity, and controversy giving rise to the proceeding.7 In addition to these criteria,
a district court’s discretion must be guided by factors relevant to abstention, including (1) whether
there is a pending state action in which all of the matters in controversy may be fully litigated, (2)
whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant, (3) whether the
plaintiff engaged in forum shopping in bringing the suit, (4) whether there exist possible inequities in
allowing the declaratory plaintiff to gain precedence in time or to change forums, (5) whether the
federal court is a convenient forum for the parties and witnesses, (6) whether retaining the lawsuit
in federal court would serve the purposes of judicial economy, and (7) whether the federal court is
being called on to construe a state judicial decree involving the same parties and entered by the court
before whom the parallel state suit between the same parties is pending.8
In the instant case, the district court denied Brown’s motion to dismiss and retained
jurisdiction on the grounds that (1) Northfield had no t been named as a party in the pending state
court actions, and (2) the issue of coverage was not being litigated there. Consequently, the court
concluded, the state court actions would not provide satisfactory means for the resolution of
Northfield’s claim.
Citing a plethora of cases in which federal district courts elected to dismiss declaratory actions
despite the fact that the issues or the parties were not the same as those in pending state suits, Brown
7
See Allstate Ins. Co. v Mercier, 913 F.2d 273, 277 (6th Cir. 1990).
8
See St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590-91 (5th Cir. 1994).
5
contends that the district court should have abst ained from exercising its jurisdiction in this case.
Brown argues that the district court abused its discretion in failing to dismiss this suit given that
Northfield could have intervened in the state court action and sought declaratory relief there. In
addition, as the liability of Havens and Adams has yet to be determined, argues Brown, judicial
comity and economy militate in favor of resolving that issue before adjudicating the question of
coverage.
There is no per se rule against a federal court’s entertaining a declaratory judgment action to
determine an insurer’s liability when a tort action is pending against its insured in a state court.9
Although the cases cited by Brown are instructive as to the merits of dismissal in a variety of factual
situations, they are not dispositive of the outcome in this particular case. Northfield is not a party to
the pending state actions and the issue of insurance coverage has not been raised in that court. As
Brown points out, his state action will be going to trial in a matter of months. Consequently, for
Northfield to intervene at this time would surely delay those proceedings. There is no evidence to
suggest that Northfield filed its suit as a preemptive strike to obtain res judicata advantage or to shop
for a mo re favo rable forum. Neither is there any indication that Northfield’s suit is an attempt to
thwart some advantage Brown gained by filing first in state court Reso lution of the declaratory
.
judgment action in federal court provides an efficient method of determining Northfield’s policy
obligations. Given these considerations, we cannot say that the district court abused its discretion
in choosing to retain jurisdiction over Northfield’s declaratory judgment action.
2. Summary Judgment
Summary judgment is appropriate when, after viewing the evidence in the light most favorable
9
See Mercier, 913 F.2d at 277.
6
to the nonmoving party, the record reflects that no genuine issue o f material fact exists, and the
moving party is entitled to judgment as a matter of law.10 Once the movant carries his burden, “the
nonmovant must go beyond the pleadings and designate specific facts showing that there is a genuine
issue for trial.”11
Brown contends that the district court erred in granting summary judgment in favor of
Northfield because two material facts are genuinely in dispute. First, Brown submits that the policy
issued by Northfield to Adams does not contain an assault and battery exclusion. Brown argues that
the district court made an impermissible credibility determination when it relied on a notarized
Certification of Insurance presented by Northfield’s vice-president as evidence that the attached
policy, which included the exclusion, was the same policy that had been issued to Adams. This
argument is wholly without merit. In response to Northfield’s motion, none of the defendants came
forward with evidence to substantiate the assertion that the exclusion was not present in the policy
issued to Adams. Brown clearly failed to sustain his burden under the summary judgment rubric, and
the district court was correct in proceeding under the assumption that the policy contained the
exclusion.
Second, Brown contends that even if the exclusion were included in the policy, his injuries
are nevertheless covered. In support of this argument, Brown notes that his complaint alleges that
Havens’s actions were either intentional or negligent. As he has not alleged unequivocally that
Havens’s conduct was intentional, argues Brown, there is a genuine and material factual dispute as
to whether his injuries were the result of an assault and battery or merely negligence. Brown further
10
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); Fed. R. Civ. P. 56(c).
11
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
7
submits that, because he did not “voluntarily enter into the affray,” his injuries were accidental and
therefore outside t he sco pe of Northfield’s exclusion. These arguments are specious and must
therefore fail.
Even though in his state court pleading Brown characterized Havens’s actions as “intentional,
willful, unlawful, wanton, reckless, grossly negligent, and/or negligent,” Brown has failed to present
any evidence to support his alternative assertion that his claims involve negligence or unintentional
acts by Havens. In his sworn statement to the police, Brown averred that Havens committed the
offense of simple assault “by hitting him in the mouth with a blount [sic] object” thereby fracturing
his jaw and breaking his teeth. Given Brown’s pleading and affidavit, there is no question that his
claim against Havens is based on an intentional act. Furthermore, as the exclusion encompasses not
only assault and battery but also “any act or omission in connection with the prevention and
suppression” of assault and battery, Brown’s claim against Adams —— relating, among other things,
to his alleged negligent hiring, retention and training of Havens —— is also excluded from coverage.
Northfield’s policy provides coverage for “sums that the insured becomes legally obligated
to pay as damages because of ‘bodily injury’ or ‘property damage’.” The coverages section of the
policy states in pertinent part that the insurance “applies to ‘bodily injury’ and ‘property damage’ only
if: (1) The ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’ that takes place in the
‘coverage territory;’ . . . .” The term “occurrence” is defined as “an accident, including continuous
or repeated exposure t o substantially the same general harmful conditions.” Brown argues that,
because he was injured through “external force, not of his choice or provocation,” his injuries were
the result of an accident and are therefore covered. Northfield’s policy specifically excludes bodily
injury arising out of specified occurrences (or accidents), one of which is “assault and battery.”
8
Therefore, regardless of whether Brown provoked this particular attack, his claims against Havens
and Adams for his resulting injuries are excluded from coverage under the policy.
III
CONCLUSION
The district court did not abuse its discretion in denying Brown’s motion to dismiss, given that
court’s reasonable explanation for retaining jurisdiction over Northfield’s claim under the Declaratory
Judgment Act. As for summary judgment, the court correctly concluded that, by virtue of the express
exclusion in Northfield’s policy, Brown’s injuries were not within the scope of coverage.
Accordingly, the rulings of the district court are, in all respects,
AFFIRMED.
9