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Gregory Haskin Chiropractic Clinics, Inc. v. State Farm Mutual Automobile Insurance Co.

United States District Court, S.D. Florida

June 11, 2019

Gregory Haskin Chiropractic Clinics, Inc.,
v.
State Farm Mutual Automobile Insurance Company, Defendant.

          ORDER ON MOTION TO DISMISS

          ROBERT N. SCOLA, JR. UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon the Defendant's Motion to Dismiss, or alternatively, Motion to Stay. (ECF No. 23.) The Plaintiff filed a response (ECF No. 26) and the Defendant timely replied (ECF No. 29.) Upon review of the record, the relevant caselaw, and the parties' submissions, the Court grants the Plaintiff's motion. (ECF Nos. 23.)

         I. Background

         Plaintiff Gregory Haskin Chiropractic Clinics, Inc. filed its Amended Class Action Complaint against Defendant State Farm Mutual Automobile Insurance Company (“State Farm”) for declaratory judgment, injunctive relief, and breach of contract. (ECF No. 16.) The Plaintiff's allegations center around the Defendant's improper application of the Plaintiff's deductible to its medical bills under Florida's no-fault personal injury protection (“PIP”) statute, Fla. Stat. § 627.736. On December 28, 2018, the Florida Supreme Court clarified Florida law regarding the issue of the proper timing for an insurer to apply an insured's deductible to medical bills for PIP benefits. See Progressive Select Ins. C. v. Fla. Hosp. Medical Cntr., 2018 WL 6816810 (Fla. Dec. 28, 2018). Florida Hospital held that when calculating the amount of PIP benefits due, the insured's deductible is to be subtracted from the total medical charges before applying the statutory reimbursement limits in the PIP statute. (ECF No. 16 at ¶53.) Plaintiff's complaint alleges that the Defendant has been misapplying the deductible and under-paying its insureds, including Plaintiff and all those similarly situated.

         Also relevant to this Court's order is a lawsuit pending in the Eleventh Judicial Circuit Court for Miami-Dade County. On October 23, 2014, Progressive Health Services, Inc. filed its Amended Class Action Complaint against Defendant State Farm Mutual Automobile Insurance Company seeking declaratory relief and damages for breach of contract. (ECF No. 23-2.) The Plaintiff in the state court complaint and in this action seek the same declaratory relief regarding the Defendant's PIP reimbursement practices. The two complaints also seek contract damages based on State Farm's under-payment of no-fault benefits under Florida law. There is currently a motion for class certification pending in the state court action. Progressive Health Servs. Inc. v. State Farm Mutual Auto Ins. Co., No. 2011-010334-CA-01, Dkt. #13 (11th Jud. Cir. Fla. April 4, 2019).

         The Defendant now moves to dismiss the complaint on three separate grounds: (1) the Court lacks subject matter jurisdiction because the Plaintiff failed to allege the jurisdictional amount in controversy required by the Class Action Fairness Act; (2) the equitable claims should be dismissed because the Plaintiff has an adequate remedy at law; or alternatively (3) the case should be stayed pending the outcome of a related state court case. (ECF No. 23 at 6-11.) Because the Court finds that it should decline to exercise jurisdiction over this case, it will address the Defendant's last argument only.

         II. Analysis

         The Defendant argues that this case should be dismissed or stayed under Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328 (11th Cir. 2005). Under Ameritas, the Eleventh Circuit held that a federal court should decline to hear a declaratory judgment action where “another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties.” Id. at 1330. Because the state court action will determine the same legal issues against the same defendant, State Farm believes this case should be stayed or dismissed pending the outcome of the state court case. The Defendant also argues that this case should be stayed or dismissed under Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800 (1976). While the Plaintiff “concedes that the prior pending state court class action seeks virtually the same[1] relief against State Farm, ” the Plaintiff argues that this case should not be stayed under Colorado River because the “state court action is in its infancy.” (ECF No. 26 at 13.) The Plaintiff does not address Ameritas and neither party bothers to explain which test should apply, Ameritas or Colorado River, and the relationship between the two, if any.

         In Ameritas, the Eleventh Circuit explained that the “Declaratory Judgment Act is an enabling Act, which confers a discretion on courts rather than an absolute right upon the litigant. It only gives the federal courts competence to make a declaration of rights; it does not impose a duty to do so.” 411 F.3d at 1330 (internal citations and quotations omitted). Following the Supreme Court's decisions in Brillhart v. Excess Ins. Co. of Am., 316 U.S. 494 (1942) and Wilton v. Seven Falls Co., 515 U.S. 277 (1995), the Eleventh Circuit held that it would be “uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit” where there is a parallel suit pending in state court. Id. The Eleventh Circuit put forth a nine-part test “to aid district courts in balancing state and federal interests.” Id. at 1331. Under this test, the district court should consider:

(1) the strength of the state's interest in having the issues raised in the federal declaratory action decided in the state courts; (2) whether the judgment in the federal declaratory action would settle the controversy; (3) whether the federal declaratory action would serve a useful purpose in clarifying the legal relations at issue; (4) whether the declaratory remedy is being used merely for the purpose of “procedural fencing”-that is, to provide an arena for a race for res judicata or to achieve a federal hearing in a case otherwise not removable; (5) whether the use of a declaratory action would increase the friction between our federal and state courts and improperly encroach on state jurisdiction; (6) whether there is an alternative remedy that is better or more effective; (7) whether the underlying factual issues are important to an informed resolution of the case; (8) whether the state trial court is in a better position to evaluate those factual issues than is the federal court; and (9) whether there is a close nexus between the underlying factual and legal issues and state law and/or public policy, or whether federal common or statutory law dictates a resolution of the declaratory judgment action.

Id.

         Ameritas applies specifically to declaratory judgment suits. On the other hand, for lawsuits involving monetary damages, the Colorado River abstention doctrine is used to determine if a federal court should dismiss or stay an action in favor of a parallel state case. Under Colorado River, the district court should only abstain under “exceptional circumstances.” Moore v. Demopolis Waterworks and Sewer Bd., 374 F.3d 994, 997 (11th Cir. 2004). Colorado River is an “extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it.” Colorado River, 424 U.S. at 813. Under Colorado River, the district court must consider six factors:

(1) whether one of the courts has assumed jurisdiction over property, (2) the inconvenience of the federal forum, (3) the potential for piecemeal litigation, (4) the order in which the fora obtained jurisdiction, (5) whether state or federal law will be applied, and (6) ...

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