PHILADELPHIA – Defendants who filed a motion to dismiss a declaratory judgment complaint from Progressive Insurance Company have had that motion denied in federal court.
U.S. District Court for the Eastern District of Pennsylvania Judge Robert F. Kelly Sr. stated the basis for the denial of defendants Charlene and Donald F. Eichman’s motion is that the District Court had no valid reason to exercise jurisdiction over the coverage issue in their case.
“The defendants argued the action does not involve a federal question, the resolution of the dispute does not promote any federal interest and the underlying tort action for which the plaintiff seeks to avoid any obligation of defense and indemnification is pending in the Court of Common Pleas of Delaware County,” Kelly said.
Progressive’s declaratory judgment action arises from a personal watercraft accident which took place between Donald Eichman and fellow defendant Kevin M. O’Brien at Hereford Inlet in North Wildwood, N.J. on Sept. 23, 2012.
Eichman subsequently filed suit against O’Brien in the Delaware County Court of Common Pleas for his alleged negligent operation of the watercraft in causing the accident and seeking recovery of bodily injury liability coverage, under his own personal boat and watercraft policy with Progressive. Charlene Eichman also had a count in that suit for loss of consortium.
Per Progressive’s policy, it would not pay damages for bodily injury and property damage, for which “an insured person” becomes legally responsible because of an accident. Progressive asserted O’Brien was using one of the covered watercraft with Eichman’s permission, thus qualifying him as an additional “insured person” under Progressive’s policy.
Progressive claimed Eichman’s desire for financial recovery due to injuries from O’Brien’s watercraft operation was strictly excluded from coverage, as an exclusion to the policy states, “Coverage…including our duty to defend, will not apply to any insured person for bodily injury to you or a relative.”
In the instant matter, Kelly added though the Court recognized it possessed “broad discretion” to decline to entertain a declaratory judgment action, it will not grant that request in this case. He explained the Eichman defendants had actively participated in this federal suit for 10 months, spanning a period from the complaint’s original filing on April 26, 2015 to the filing of a motion to dismiss on Feb. 10.
On Jan. 27, Progressive filed its motion for summary judgment, which remains pending.
“The Eichman defendants actively participated in this federal lawsuit for 10 months. Now, with a motion for summary judgment briefed and ready for decision, they ask that we dismiss this case and tell Progressive to start over in the State Court. That would be an extremely unfair exercise of the discretion that we have in this matter,” Kelly said.
Kelly then denied the Eichmans’ motion to dismiss Progressive’s declaratory judgment action.
The plaintiff is represented by David Ronald Friedman of Forry Ullman, in King of Prussia.
The defendants are represented by James C. Haggerty and Suzanne Tighe of Haggerty Goldberg Schleifer & Kupersmith in Philadelphia, and James B. Halligan III of McNichol Byrne & Matlawski, of Media.
U.S. District Court for the Eastern District of Pennsylvania case 2:15-cv-01996
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at email@example.com