United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER
BRACK SENIOR U.S. DISTRICT JUDGE
Farm Bureau Property & Casualty Insurance Company (Farm
Bureau) presses this Court to decide the insurance coverage
dispute underlying this case, despite a parallel state
proceeding that involves the same coverage issue. According
to Farm Bureau, the defendants do not have standing to sue
Farm Bureau in state court, and state proceedings may be
unduly delayed by extraneous parties and issues. The
defendants counter that parties crucial to the correct
disposition of the insurance dispute are present in the state
action but absent from this one, that pressing forward may
fragment the state court litigation, and that the state court
should adjudicate the coverage dispute, which centers
entirely on state law. After considering the five
Mhoon factors articulated by the Tenth Circuit in
deciding whether to exercise jurisdiction in a case such as
this, the Court determines that the problems with pressing
forward outweigh any benefit gained in doing so, at least for
now. Accordingly, the practical and prudent move at this time
is to stay the proceedings and see how the litigation unfolds
in the state court.
Jeramiah Gouin was just 17 years old when he was trampled by
a bull and left paralyzed for life. (Doc. 1 at 2.) At the
time of his injury, Mr. Gouin was attending “Riding on
Faith Bull Riding School and Church Camp, ” a Christian
bull-riding camp run by Defendants Daniel Quartieri and
Shelly Quartieri. (Doc. 1 at 2.) The Quartieris had insurance
coverage provided by Farm Bureau. (Doc. 20 at 2.) When Farm
Bureau found out about Mr. Gouin's injury, it retained
counsel to defend the Quartieris under a reservation of
rights. (Id. at 3.) At the time, no lawsuit had been
filed against the Quartieris, and Farm Bureau urged the
parties to mediate their differences. (Id.)
later, with no mediation in sight, Farm Bureau filed a
declaratory judgment action in this Court, arguing that the
incident at the camp was not covered by the Quartieris'
insurance policy, so it should be absolved of any
responsibility to the Quartieris or Mr. Gouin arising from
the incident. (Doc. 1 at 11-13.) After Farm Bureau's
declaratory judgment action was filed, the parties scheduled
mediation. (Doc. 20 at 3.) With mediation set, Farm Bureau
agreed to slow the progress of its lawsuit, consenting to
several extensions for the defendants to answer the lawsuit.
just days before the scheduled mediation, Mr. Gouin canceled
the meeting. (Id. at 3.) Mr. Gouin then filed suit
in New Mexico's Fourth Judicial District Court, asserting
various legal theories against Riding on Faith Camp, the
Quartieris, and Farm Bureau, among others. (Doc. 20 at 3-4.)
Mr. Gouin's state claims against Farm Bureau are for
breach of contract and declaratory judgment. (Id. at
addition to facing claims from Mr. Gouin, Farm Bureau also
faces claims from the Quartieris in state court. The
Quartieris, co-defendants with Farm Bureau in the state court
action, cross-claimed against Farm Bureau for declaratory
relief. (Doc. 25 at 1.) Thus, both the Quartieris and Mr.
Gouin have claims for declaratory relief against Farm Bureau
pending in state court.
that this Court should defer to the state court action, Mr.
Gouin and the Quartieris have filed motions to dismiss or
stay the proceedings here. (Docs. 14 at 1, 15 at 1.)
statutory basis for Farm Bureau's request for relief is
the Declaratory Judgment Act, which provides that a court
with jurisdiction “may declare the rights and other
legal relations of any interested party seeking such
declaration . . . .” 28 U.S.C. § 2201. The Supreme
Court has “repeatedly characterized the Declaratory
Judgment Act as ‘an enabling Act, which confers . . .
discretion on the courts rather than an absolute right upon
the litigant.'” Wilton v. Seven Falls Co.,
515 U.S. 277, 287 (1995) (quoting Pub. Serv. Comm'n
of Utah v. Wycoff Co., 344 U.S. 237, 241 (1952)).
“Consistent with the nonobligatory nature of the
remedy, a district court is authorized, in the sound exercise
of its discretion, to stay or to dismiss an action seeking a
declaratory judgment . . . .” Id. at 288.
guide district courts in exercising their discretion over
whether to abstain from a declaratory judgment case, the
Tenth Circuit in State Farm Fire & Casualty Co. v.
Mhoon laid out five factors to consider:
(1) whether a declaratory action would settle the
(2) whether it would serve a useful purpose in clarifying the
legal relations at issue;
(3) whether the declaratory remedy is being used merely for
the purpose of “procedural fencing” or “to
provide an arena ...