Thursday, September 2, 2010

Add Another Case to the String Cite of Federal Court Cases Declining Jurisdiction on Insurance Coverage Questions

My partner, Timothy E. Foley, Esquire prevailed on a Motion to Dismiss for an insured defendant in the Federal Middle District Court Case of Founders Ins. Co. v. Garofalo, No. 03:10-CV-1114 (M.D.Pa. Aug. 30, 2010, Conaboy, J.) in which Judge Conaboy was convinced by a long string cite of similar decisions to decline to exercise his discretionary jurisdiction over an insurance coverage question posed by the Plaintiff carrier.

The underlying case involved a fatal car accident. The tortfeasor driver was allegedly intoxicated and the underlying suit was against that driver and the bar that allegedly served alcohol to the driver. The tortfeasor driver also happened to be the president of the corporation that owned the bar (i.e. he allegedly served himself). The carrier at issue, Founders Insurance Company, covered both the defendant driver and the corporation that owned the bar.

In this Federal Court declaratory judgment action, the carrier sought a judicial declaration that it need not provide a defense or coverage under the circumstances presented. The insureds filed a motion to dismiss.

Without reaching the merits of the declaratory judgment action, Judge Conaboy relied upon a string cite of cases presented by Attorney Tim Foley all standing for the proposition that the Federal Court had the discretion to decline to hear such cases as the Complaint did not involve any federal question and dealt strictly with contract interpretation under well settled Pennsylvania law. In the face of this overwhelming precedent, Judge Conaboy declined to take jurisdiction over the case and granted the motion to dismiss.

This decision adds another notch to the string cite of cases in this regard and furthers the notion that the Federal Courts are not interested in addressing these issues where they do not have to. An analysis of the other similar cases, and their impact on Post-Koken cases can be seen in my Pennsylvania Law Weekly article "Here Comes Hurricane Koken" 31 PLW 1165 (Oct. 27, 2008), which can b read by clicking on this link: http://www.jdsupra.com/post/documentViewer.aspx?fid=ef090f48-d1fa-4e1c-8569-3538ec1fd556.

Anyone desiring a copy of the case of Founders Ins. Co. v. Garofalo may contact me at dancummins@comcast.net

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