United States District Court,

N.D. Indiana,

Fort Wayne Division.

Margarita R. KARPOV, Individually and as Administratrix of the Estate of Dimitry B. Karpov, and Michael Dylan Karpov, Plaintiffs,

v.

NET TRUCKING, INC., et al., Defendants.

Cause No. 1:06-CV-195-TLS.

 

Dec. 6, 2010.

 

OPINION AND ORDER

 

THERESA L. SPRINGMANN, District Judge.

 

This matter is before the Court on the issue of damages. On July 14, 2010, the Court received evidence at an evidentiary hearing [ECF No. 159], and on July 30, 2010, the Plaintiffs submitted a Post Hearing Brief [ECF No. 160], to which are attached evidentiary materials and video recordings of depositions [ECF No. 161].

 

BACKGROUND

 

This diversity action, which the Plaintiffs filed in November 2005, is a lawsuit pertaining to the 2005 death of Dimitry B. Karpov in a vehicle collision near Bristol, Indiana, on Interstate 80/90, a stretch of the Indiana Toll Road. In their Second Amended Complaint, the Plaintiffs made the following claims: negligent operation of a tractor trailer/wrongful death; wrongful operation of a trucking company; survivorship/pain and suffering; personal injury; familial loss of consortium; and fraudulent conveyance. This case has an extensive procedural history, which the Court has discussed in its previous Opinions and Orders [ECF Nos. 92, 117, & 148] and need not repeat here. The Court, in its February 11, 2010, Order [ECF No. 148], granted the Plaintiffs’ Motion for Sanctions and directed the Clerk to enter judgment for the Plaintiffs and against Defendant Net Trucking, which the Clerk entered [ECF No. 149] on the same day. The only issue remaining is the amount of damages due the Plaintiffs.

 

DEFAULT JUDGMENT DAMAGES STANDARD

 

Federal Rule of Procedure 55, which governs the entry of default and the entry of default judgment, creates a two-step process: “the establishment of the default, and the actual entry of a default judgment. Once the default is established, and thus liability, the plaintiff still must establish his entitlement to the relief he seeks.” In re Catt, 368 F.3d 789, 793 (7th Cir.2004); see also Lowe v. McGraw-Hill Cos., Inc., 361 F.3d 335, 339 (7th Cir.2004) (stating that there is a clear distinction “between the entry of default and the entry of a default judgment”). The first step is satisfied when the clerk enters a party’s default because it has “failed to plead or otherwise defend” and this “failure is shown by affidavit or otherwise.” Fed.R.Civ.P. 55(a). “Upon default, the well-pleaded allegations of the complaint relating to liability are taken as true.” Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir.1983). The second step-the entry of default judgment that is anticipated by subsection (b) of the Rule-may only be entered against “a defendant who has been defaulted.” Fed.R.Civ.P. 55(b). A court may also enter default judgment against a party pursuant to Rule 37 for failing to comply with a court order. Fed.R.Civ.P. 37(b)(2) (A) (“If a party … fails to obey an order to provide or permit discovery … the court where the action is pending may issue further just orders. They may include … rendering a default judgment against the disobedient party.”).

 

Rule 55(b) contemplates that, after default is entered, a party must apply to the court for a default judgment when the plaintiff’s claim is not for a sum certain or a sum that can be made certain by computation, and the court may then render default judgment. The Seventh Circuit has made the following observation regarding the determination of the amount of damages after a party has defaulted in defending against a lawsuit:

 

Even when a default judgment is warranted based on a party’s failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true. The district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.

 

In re Catt, 368 F.3d at 793 (citation marks omitted). Under Rule 55(b)(2), the court has the discretion to conduct hearings “when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.”

 

ANALYSIS

 

This Court must determine what damages are appropriate in this case. As to the wrongful death, wrongful operation, survivorship, Margarita Karpov’s personal injury, and consortium claims, the issues include: compensatory damages (including economic and non-economic damages), and punitive damages. As to the fraudulent conveyance claim, the Court has to determine what remedies are appropriate.

 

The Court places the following claims under the category of “Dmitry Karpov’s Wrongful Death”: wrongful death; wrongful operation; survivorship; and consortium.

 

A. Compensatory Damages for Dmitry Karpov’s Wrongful Death

 

The Indiana Wrongful Death Act creates a statutory cause of action to recover damages caused by the wrongful act or omission by another resulting in death. Ind.Code § 34-23-1-1. Dmitry Karpov, who was twenty-seven years old at the time of his death, is survived by his wife, Margarita, and their son, Michael. Michael was fourteen months old at the time of Dmitry’s death. Per-Se Technologies employed Dmitry as a software programmer, and at the time of his death, it paid him $60,000 per year. Dmitry was at the beginning of his career and would likely have received cost of living and merit raises during his tenure with the company. Dmitry’s remaining work life expectancy was thirty-two years, and his remaining life expectancy was fifty years. (U.S. Dep’t of Labor, Bureau of Labor Statistics, Work Life Estimates (Bulletin 2254, Feb. 1986), ECF No. 160-1; U.S. Dep’t of Health & Human Servs., United States Life Tables, 2004, 56 National Vital Statistics Reports 9 (Dec.2007), ECF No. 160-2.) According to Bureau of Labor Statistics calculations, the value of Dmitry’s pension, health insurance, and other employment benefits would equal approximately 28.87% of his base salary. (See U.S. Dep’t of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation-September 2008 (Dec.2008), ECF No. 160-3.) Therefore, Dmitry’s loss of earning capacity as a result of his death is $2,474,304.00-his salary per year times remaining work life, plus his benefits per year times his remaining work life. Under Indiana law, a defendant may provide evidence that an amount should be reduced to adjust for present value or the “projected personal maintenance expenses of the decedent[,]” but the Defendant has ceased defending in this action, and the Plaintiffs do not bear any burden related to such a reduction. TRW Vehicle Safety Sys., Inc. v. Moore, 936 N.E.2d 201, 220 (Ind.2010).

 

($60,000 * 32) + (($60,000 * .2887) * 32) = $2,474,304.00

 

In addition, Margarita and Michael suffered non-economic losses as a result of losing their husband and father, respectively. Margarita testified at the evidentiary hearing about the non-economic losses that she and Michael have suffered as a result of Dmitry’s death. She spoke about having a relationship with Dmitry since college and the difficulty of raising Michael without him. The Plaintiffs also submitted photos of Dmitry and Michael before Dmitry’s death that showed the closeness of their relationship. The Plaintiffs requested $5,000,000.00 in damages for their non-economic losses. An award of non-economic damages is not unreasonable when economic damages make up at least approximately thirty percent of the overall award. See Hagerman Constr., Inc. v. Copreland, 697 N.E.2d 948, 963 (Ind.Ct.App.1998) (discussing Indiana cases and concluding that jury verdicts containing at least approximately thirty percent economic damages were not excessive). The Court’s award of $2,474,304.00 in economic damages would make up approximately thirty-three percent of the overall award if the Court were to award the Plaintiffs $5,000,000.00 in non-economic damages. Based upon the evidence before the Court and the governing legal standards, an award of $5,000,000.00 in non-economic damages is not unreasonable in this case. The Plaintiffs have already recovered $752,647 on this wrongful death claim from Net Trucking’s insurance company, which the Court will deduct from the sum total of economic and non-economic damages. Consequently, as compensatory damages for Dmitry’s wrongful death, the Court will award the Plaintiffs $6,721,657.00.

 

$2,474,304.00 + $5,000,000.00-$752,647.00 = $6,721,657.00

 

B. Compensatory Damages for Margarita’s Personal Injury Claim

 

As a result of this accident, Margarita suffered multiple injuries, which are shown in detail in the Plaintiffs’ evidentiary submission attached to their Pre-Hearing Brief. (ECF No. 155-3.) The injuries include a closed head injury, bilateral pneumothoraces, left rib fractures, liver laceration with hematoma, pelvic hematoma, left sacral ALA fracture, left sacral iliac joint widening, left superior and inferior rami fractures, right superior and inferior rami factures, pulmonary contusion, acute blood loss, anemia, and left foot drop. (Id. at 2.) At Parkview Hospital in Fort Wayne, Indiana, Margarita underwent surgery during which doctors placed an external fixator on and inserted an ileosacral screw in her left sacroiliac joint. (Id. at 2-3.) Approximately ten days after the accident, she was transferred to The MetroHealth Medical Center in Cleveland, Ohio, where she underwent an additional surgery that included an open reduction, an internal fixation of the left sacroiliac joint, and an adjustment of the external fixation with a new pin placement. (Id. at 6-8.) For months, she was unable to bear her own weight on her legs. For six months, she underwent physical therapy. For much of that time, she was unable to lift her child, Michael, or to take care of his daily needs. Today, nearly five years after the accident, Margarita continues to have pain in her leg and residual weakness in her left foot. She is at risk for degenerative joint disease in her hip joint as well as in her lumbosacral spine. For the medical care she received, she incurred costs totaling $151,597.20 in medical bills.

 

The Plaintiffs request $500,000 in damages for Margarita’s acute injuries and $500,000 in damages for the past disability that she suffered. Margarita’s remaining life expectancy is fifty-two years. (U.S. Dep’t of Health & Human Servs., United States Life Tables, 2004, 56 National Vital Statistics Reports 9 (Dec.2007), ECF No. 160-4.) The Plaintiffs request $19,200 per year for a total of $998,400.00 for Margarita’s future pain and suffering.  Under Indiana law, the calculation of pain and suffering is not governed by fixed rules or mathematical precision. See Dee v. Becker, 636 N.E.2d 176, 178 (Ind.Ct.App.1994) (stating that “[d]amages for pain and suffering are of necessity a jury question which may not be reduced to fixed rules and mathematical precision”). Based upon the evidence before the Court and the Plaintiffs’ presentation, which stands undisputed by the Defendant, the Court finds the Plaintiffs’ request for pain and suffering reasonable. Margarita has already recovered $30,000 from Net Trucking’s insurance company. Consequently, the Court will award Plaintiff Margarita Karpov $2,119,997.20 in compensatory damages.

 

$19,200 * 52 = $998,400.00

 

$151,597.20 + $500,000 + $500,000 + $998,400-$30,000 = $2,119,997.20

 

C. Punitive Damages

 

In addition to the compensatory damages discussed above, the Plaintiffs also seek punitive damages. Under Indiana law, punitive damages may be appropriate where a plaintiff recovers compensatory damages. Crabtree ex rel. Kemp v. Estate of Crabtree, 837 N.E.2d 135, 137-38 (Ind.2005) (“Successful pursuit of a cause of action for compensatory damages is a prerequisite to an award of punitive damages.”) (citing Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 523 (Ind.1993); Sullivan v. Am. Cas. Co. of Reading, Pa., 605 N.E.2d 134, 140 (Ind.1992)). Indiana law prohibits punitive damage awards based solely on wrongful death actions, Ind.Code § 34-23-1-1, and caps punitive damage awards at three times the amount of compensatory damages, Ind.Code § 34-51-3-4(1). Additionally, “[p]unitive damages are available only if clear and convincing evidence shows that the defendant ‘acted with malice, fraud, gross negligence or oppressiveness which was not the result of a mistake of fact or law, honest error of judgment, overzealousness, mere negligence, or other human failing.’ “ Williams v. Tharp, 914 N.E.2d 756, 769 n. 6 (Ind.2009) (quoting Bud Wolf Chevrolet, Inc. v. Robertson, 519 N.E.2d 135, 137 (Ind.1988)). In Indiana, “[i]t is not a defense to an action for punitive damages that the defendant is subject to criminal prosecution for the act or omission that gave rise to the civil action.” Ind.Code § 34-24-3-3.

 

In this Opinion and Order, the Court is awarding compensatory damages to Margarita for her injuries, which allows an award of punitive damages. The Defendant’s conduct was grossly negligent, manifested an indifferent and reckless disregard for the health and safety of others, and caused a significant physical harm. Defendant Gil drove the tractor-trailer while intoxicated. See Gil v. State, No. 20A03-0611-CR-525, 2007 WL 1470150, at(Ind.Ct.App. May 22, 2007) (affirming Defendant Gil’s criminal sentence including the finding that he acted recklessly and inflicted serious bodily injury on other persons). Defendants Gil and Net Trucking altered the driving log books. Defendant Gil drove more than the allowed number of hours under the Federal Motor Carrier Safety regulations, 49 C.F.R. § 395.8, and Defendant Net Trucking knowingly allowed its drivers to engage in this practice. Considering the Defendant’s default and the evidence before the Court, the Court will grant the Plaintiffs’ request and award the maximum punitive damages allowed under Indiana law, which is $6,359,991.60. This damages award represents Margarita’s compensatory damages award, multiplied by the treble statutory factor for punitive damages. In order to determine if a punitive damages award is constitutionally excessive, the Court must consider the reprehensibility of a defendant’s conduct:

 

The punitive damages award here is not based upon the wrongful death claim.

 

“Unless later designated for publication, a not-for-publication memorandum decision shall not be regarded as precedent and shall not be cited to any court except by the parties to the case to establish res judicata, collateral estoppel, or law of the case.” Ind. Rule of Appellate Procedure 65(D).

 

$2,119,997.20 * 3 = $6,359,991.60

 

[The Court must determine whether] the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.

Catt v. Skeans, 867 N.E.2d 582, 587 (Ind.Ct.App.2007) (quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 419, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003)). The Court finds, for the reasons stated above, that the harm caused was physical, that the conduct showed a reckless disregard of the health or safety of others, and that the Defendant’s conduct of altering log books and having drivers drive more than the permissible number of hours was repeated.

 

D. Fraudulent Conveyance

 

The Plaintiffs request that the Court determine that Defendant Net Trucking fraudulently conveyed its assets to certain party Defendants who have also defaulted and have had default judgment entered against them in this matter. “A default judgment establishes, as a matter of law, that defendants are liable to plaintiff on each cause of action alleged in the complaint.” e360 Insight v. The Spamhaus Project, 500 F.3d 594, 602 (7th Cir.2007) (citing United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir.1989)). Although default judgment establishes liability, a court must be careful in crafting remedies, especially those of an equitable nature. Id. at 604.

 

The Plaintiffs’ Second Amended Complaint alleges that Defendant Net Trucking fraudulently conveyed its assets to Defendants Agata Swietoslawski, Foxline Transportation, Inc., Blue Line Equipment LLC, Net Freight System, Inc., and Net Trans. Inc. (Fraudulent Conveyance Defendants). On May 16, 2008, the Clerk entered a Clerk’s Entry of Default [ECF No. 107] against the Fraudulent Conveyance Defendants pursuant to Federal Rule of Civil Procedure 55(a). The Court issued an Order [ECF No. 117] on July 18, 2008, granting the Plaintiffs’ Motion for Default Judgment Against the Fraudulent Conveyance Defendants [ECF No. 108] on Plaintiffs’ fraudulent conveyance claim. The Court explained that the Order did not “prejudice the ability of Defendant Net Trucking, Inc., a party not in default, to contest Plaintiffs’ allegations of fraudulent conveyance as set forth in Plaintiffs’ Second Amended Complaint.” (ECF No. 117 at 2.) The evidence before the Court shows that Defendant Net Trucking fraudulently conveyed its assets to these other Defendants. For instance, Marek Swietoslawski, the President of Defendant Net Trucking, testified at his deposition that, after the August 2005 accident, he transferred the title to his house from him and his wife to only his wife, Agata Swietoslawski. According to his deposition, his wife started Net Trans, Inc., a month or two after the accident. Foxline Transportation, Inc. and Blue Line Equipment, LLC are also Agata Swietoslawski’s companies formed soon after the accident. Marek Swietoslawski owned Net Freight System Inc., which brokered business for Net Trucking. These companies took a number of customers from Net Trucking, engaged in trailer leasing practices, trailer sales, and otherwise acted as if they were new entities replacing Net Trucking. Considering Defendant Net Trucking’s default in this litigation-as a result of this Court’s Order pursuant to Federal Rule of Civil Procedure 37(b)(2)(A) (vi)-the allegations in the Second Amended Complaint, and the uncontested evidence in the record, the Court finds that Net Trucking fraudulently conveyed its assets to these other defaulting Defendants, and the Court will order set aside any conveyance of Defendant Net Trucking’s assets to the Fraudulent Conveyance Defendants.

 

CONCLUSION

 

For the foregoing reasons, the Court ORDERS that judgment be entered in favor of the Plaintiffs and against Defendant Net Trucking in the following amounts: $6,721,657.00 as compensatory damages for Dmitry Karpov’s wrongful death; $2,119,997.20 as compensatory damages for Margarita’s personal injury claim; and $6,359,991.60 in punitive damages. The Court further ORDERS, pursuant to Ind.Code § 32-18-2-17, that any asset conveyances from Defendant Net Trucking, Inc. to Defendants Agata Swietoslawski, Foxline Transportation, Inc., Blue Line Equipment LLC, Net Freight System, Inc., or Net Trans, Inc., be set aside and annulled to the extent necessary to satisfy this judgment.

 

SO ORDERED.

United States District Court, S.D. West Virginia.

UNITED FINANCIAL CASUALTY COMPANY, Plaintiff,

v.

Joshua NEWSOM, et al., Defendants.

Civil Action No. 5:10-cv-00118.

 

Nov. 30, 2010.

 

MEMORANDUM OPINION AND ORDER

 

IRENE C. BERGER, District Judge.

 

The Court has reviewed Defendant Newsom’s Motion to Dismiss, or, Alternatively, Motion to Transfer Venue to the Eastern District of Texas, Beaumont Division [Docket 6], filed April 12, 2010; Newsom’s Motion for Expedited Hearing, or, in the Alternative, Motion for Expedited Decision [Docket 10], filed April 15, 2010; Defendants FAC Trucking Company, Frances Cline and Michael Cline’s Motion to Dismiss [Docket 34], filed June 28, 2010; and Newsom’s Amended Motion to Dismiss, or, Alternatively, to Transfer Venue and Alternative Motion to Stay [Docket 47], filed September 24, 2010.

 

I. FACTUAL AND PROCEDURAL HISTORY

 

Plaintiff United Financial Casualty Company (United Financial) is an Ohio Corporation with its principal place of business in Mayfield Village, Ohio. (Docket 1 at ¶ 2). Defendant Joshua Newsom (Newsom) is a resident of Romayor, Liberty County, Texas. (Docket 1 at ¶ 3). Defendant FAC Trucking Company (FAC Trucking) is a West Virginia Corporation with its principal place of business in Gilbert, Mingo County, West Virginia. (Docket 1 at ¶ 4). Defendants Edward Cline, Woodrow Cline, W.E. Trucking, Edward Cline, Jr., Frances Cline and Michael Cline are residents of Hanover, Wyoming County, West Virginia. (Docket 1 at ¶¶ 5-10).

 

On March 16, 2009, Newsom filed an original petition in the District Court of Liberty County, Texas, seeking damages for alleged work-related injuries against FAC Trucking, Edward Cline and Woodrow Cline. (Docket 1 at ¶ 13). The following facts are set forth in his first amended petition, which was filed on March 16, 2010. The amended petition alleges that following Hurricane Ike, which hit the gulf coast of the United States and caused damage in Liberty County, Texas, in 2008, Liberty County entered into an agreement for the cleanup of certain public property with one or more of the following parties: DTS [Daniel’s Tree Service], Daniel McClaran, FAC Trucking, Edward Cline and Woodrow Cline. (Docket 6-1 at 3-4). Newsom claims that these parties worked together with the common purpose of conducting the cleanup work. (Docket 6-1 at 4).

 

Newsom was an employee of FAC Trucking on or about October 18, 2008, when he sustained injuries while working in the course and scope of his employment. (Docket 1 at ¶ 14). Specifically, Newsom alleges that on that date he was asked to load tools and equipment into a toolbox that was located behind the cab of a truck. (Docket 6-1 at 4). While on the truck bed loading the tools, he alleges that one or more of the defendants (in his petition) was operating the truck, causing it to shake back and forth. Newsom lost his balance and fell. (Docket 6-1 at 5). At that time, Edward Cline lowered a grappling crane onto the truck bed, crushing his fingers. (Docket 6-1 at 5; Docket 1 at ¶¶ 15-19). Newsom’s fingers were amputated three days later. (Docket 6-1 at 5).

 

Newsom claims that his worker’s compensation benefits claim was denied because FAC Trucking failed to obtain worker’s compensation insurance for its Texas operations. (Docket 6-1 at 5). In his amended petition, Newsom brings negligence claims against DTS, McClaran, FAC Trucking, and Edward Cline; and negligent entrustment, joint enterprise, vicarious liability and negligent hiring claims against DTS, McClaran, FAC Trucking, Edward Cline and Woodrow Cline.

 

The truck described by Newsom in his petition was owned by Woodrow Cline, Newsom’s co-worker, and/or W.E. Trucking, and insured by United Financial at the time of the incident. (Docket 1 at ¶¶ 21-23). There were two United Financial insurance policies in effect at that time. The named insureds on United Financial policy 06610631-0 (Policy 1) were Woodrow Cline and W.E. Trucking, and the “rated drivers” on Policy 1 were Woodrow Cline, Edward Cline, and Edward Cline, Jr. (Docket 1 at ¶ 23). The named insureds on United Financial policy 06611372-0 (Policy 2) were Frances Cline, Michael Cline, and FAC Trucking, and the “rated drivers” on Policy 2 were Frances Cline, Michael Cline and Teddy Catlett. (Docket 1 at ¶ 24).

 

United Financial initiated this case upon filing its Complaint for Declaratory Judgment [Docket 1] on February 4, 2010. It cites several policy provisions and exclusions in support of its position that it is not responsible for coverage for Newsom’s injury. Specifically, it states that it is not liable for coverage for the following reasons: the vehicle involved in the incident was not an “insured auto” under Policy 1; the policies exclude coverage when FAC Trucking Company might be held liable under worker’s compensation laws; the policies exclude coverage when Newsom was an employee of FAC Trucking, Edward Cline and Woodrow Cline or a fellow employee of Edward Cline and Woodrow Cline; and the vehicle involved in the accident was not an “auto” but rather “mobile equipment” as defined in the policies. (Docket 1 at 5-9). United Financial requests that this Court “(1) declare and adjudge that no liability coverage is available under United Financial Casualty Company policies 06610631-0 and 06611372-0, United Financial Casualty Company has no duty to indemnify FAC Trucking Company, Edward Cline, Woodrow Cline, W E Trucking, Edward Cline, Jr., Frances Cline and Michael Cline against the allegations set forth in Newsom’s Petition; (2) award United Financial Casualty Company its costs and fees expended herein; and (3) grant such other relief as the Court deems appropriate.” (Docket 1 at 10).

 

On July 8, 2010, Colony Insurance Company, with whom DTS is insured, instituted a declaratory judgment action in the Eastern District of Texas against DTS and Daniel McClaran seeking a declaration that it does not owe a duty to DTS to indemnify it against the claims asserted in Newsom’s underlying lawsuit. (Docket 47-2 at 8). DTS filed a counterclaim and joinder of parties on August 9, 2010, joining FAC Trucking and United Financial, among other parties, seeking in part a declaration that Newsom’s claims against DTS are covered by United Financial’s policy with FAC Trucking and that United Financial has a duty to indemnify it against those claims. (Docket 47-4 at ¶ 30).

 

II. MOTIONS PENDING

 

On April 12, 2010, Newsom filed his motion to dismiss this action or transfer venue, asserting in his supporting memorandum that this declaratory action should be dismissed for the following reasons: Texas has the strongest interest in applying Texas law to this matter; handling the common issues in a single matter will promote efficiency and prevent unnecessary entanglement between federal and state court systems; and United Financial is using this action as a device for procedural fencing. (Docket 7 at 2). Newsom asserts that, alternatively, the Court should dismiss the case or transfer venue because this Court lacks personal jurisdiction over him and the proper venue for this case is the Eastern District of Texas, Beaumont Division. (Docket 7 at 2-3). On April 15, 2010, Newsom moved to expedite the decision on his motion. On September 24, 2010, he filed his amended motion or motion to stay noting the recent declaratory action in which DTS joined United Financial. He states that the new declaratory action pending in the Eastern District of Texas features the same coverage issues as this action and that, therefore, this action should be dismissed or transferred and consolidated or, in the alternative, stayed pending the outcome of the related litigation. (Docket 47 at 1-2).

 

United Financial responded on May 4, 2010, contending that this case should not be dismissed because this action will settle the legal relations at issue and will terminate United Financial’s uncertainty as to the coverage issues giving rise to its action. (Docket 13 at 3). United Financial further contends that venue is proper because the policies were issued in West Virginia and the named insureds are West Virginia residents. (Docket 13 at 6). On October 8, 2010, United Financial responded to Newsom’s amended motion, contending that the parties in the instant case and the other declaratory action pending in the Eastern District of Texas are not identical and therefore the pending actions in Texas provide no basis for dismissal of this action. (Docket 49 at 3). United Financial further states in its response that transfer of this action is inappropriate inasmuch as there is no guarantee that the federal court in Texas would consolidate the cases and that a stay is inappropriate because the pending state court action does not involve the same parties and same issues. (Docket 49 at 8-9). Newsom replied on May 11, 2010.

 

On June 14, 2010, FAC Trucking, Frances Cline and Michael Cline filed their motion to dismiss on the grounds that no case or controversy exists between themselves and United Financial inasmuch as they have not sought a defense or indemnification for Newsom’s civil action. (Docket 32 at 3). United Financial responded on June 28, 2010, contending that a controversy exists because Newsom filed a tort claim against FAC Trucking, and United Financial, as an insurer of FAC Trucking, Frances Cline and Michael Cline, seeks adjudication on the extent of its responsibility for Newsom’s claims. (Docket 34 at 2).

 

III. GOVERNING STANDARD

 

Pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, district courts are authorized to “declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” Id. However, district courts have discretion in deciding whether or not to make such a declaration of rights. Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co., 139 F.3d 419, 421 (1998). “[T]his discretion should be liberally exercised to effectuate the purposes of the statute and thereby afford relief from uncertainty and insecurity … but it should not be exercised for the purpose of trying issues involved in cases already pending, especially where they can be tried with equal facility in such cases.” Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th Cir.1937).

 

Our Court of Appeals has held that a court should hear a declaratory judgment action when the relief sought “ ‘(1) will serve a useful purpose in clarifying and settling the legal relations in issue,’ and (2) ‘will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.’ “ IndCom Elec. Co., 139 F.3d at 423 (citing Quarles, 92 F.2d at 325). The Court must also weigh concerns of federalism, efficiency and comity when determining whether to exercise its discretion. Id. (citing Mitcheson v. Harris, 955 F.2d 235, 237-40 (4th Cir.1992).

 

As a preliminary hurdle to the exercise of declaratory judgment, three requirements must be met: (1) the complaint must allege an ‘actual controversy’ between the parties; (2) the court must possess an independent basis for jurisdiction over the parties; and (3) the court must not abuse its discretion in exercising jurisdiction. Volvo Const. Equip. North Am., Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir.2004).

 

IV. DISCUSSION

 

A. Independent Basis for Jurisdiction

 

The Court first turns to Newsom’s claim that the Court lacks personal jurisdiction over him. In support of this assertion, he states that he has no significant contacts with West Virginia, it is unfair to require him to bear the costs and burden of litigating this action outside of his home state and that venue is proper in the Eastern District of Texas because that is where the events giving rise to United Financial’s claim took place.

 

United Financial responds to Newsom’s assertions with a venue argument. It states that venue is proper here under 28 U.S.C. § 1391 because a “substantial part of the property that is the subject of the action is situated” in West Virginia. (Docket 13 at 6). Specifically, the “property” to which it refers are the insurance policies between it and the defendants. (Docket 13 at 6). United Financial requests that if the Court finds there is no personal jurisdiction over Newsom, then the case proceed against the named insureds. (Docket 13 at 6).

 

To demonstrate personal jurisdiction, a plaintiff must satisfy the state’s long-arm statute and show that the exercise of jurisdiction over the defendant will comport with due process. West Virginia’s long-arm statute is “co-extensive with the full reach of due process.” In re Celotex Corp., 124 F.3d 619, 627 (4th Cir.1997) (citing Pittsburgh Terminal Corp. v. Mid Allegheny Corp., 831 F.2d 522, 525 (4th Cir.1987)). Thus, the inquiry is simply whether the exercise of personal jurisdiction over Newsom is consistent with due process. This hurdle is met if the non-resident defendant has established such minimum contacts in the forum state that “the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ “ International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The plaintiff bears the burden of proving grounds for jurisdiction by a preponderance of the evidence. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.2003) (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993)).

 

United Financial does not specifically address Newsom’s claim for lack of personal jurisdiction. Moreover, the complaint does not present any facts that would suggest that Newsom has the necessary minimum contacts with West Virginia for this Court’s exercise of personal jurisdiction over him. Inasmuch as Newsom’s underlying injuries took place in Texas and he is not a party to the insurance policies at issue, the Court lacks personal jurisdiction over Newsom. Accordingly, this action is dismissed as to Newsom. It is unnecessary, therefore, to consider Newsom’s motions to dismiss.

 

B. Actual Controversy

 

The Court now turns to the motion of FAC Trucking, Frances Cline and Michael Cline to dismiss this action on the grounds that there is not an actual controversy present. The Declaratory Judgment Act confers jurisdiction on the court “in a case of actual controversy.” 28 U.S.C. § 2201. Generally, an insurance company’s action seeking a declaration that it has no duty to defend or indemnify an insured against a third party’s tort claim qualifies as an actual controversy. Nautilus, 15 F.3d at 375.

 

The only support which FAC Trucking, Frances Cline and Michael Cline provide for their motion is their insistence that they are not seeking a defense or indemnification under either policy referred to in United Financial’s complaint. Specifically, they state that upon receipt of United Financial’s complaint, they informed it that they were not seeking indemnification but that United Financial “would not consent to the voluntary dismissal of its Complaint for Declaratory Judgment against Frances Cline, Michael Cline and FAC Trucking and it is forcing their insureds to remain parties to this action in order to facilitate its own interests.” (Docket 32 at 3).

 

United Financial responds that the specific issues constituting a “case or controversy” are as follows:

 

whether (1) the vehicle involved in the accident was an insured vehicle as defined in each of the policies; (2) coverage is precluded by each policy’s employee, fellow employee, and/or worker’s compensation exclusions; and (3) the vehicle involved in the accident was “mobile equipment” as defined in the policy and, this, excluded from coverage in a claim for bodily injury arising from its operation.

 

(Docket 34 at 3). Also in its response, United Financial invites FAC Trucking, Frances Cline and Michael Cline to sign the Stipulation and Order of Judgment attached to the response as an exhibit. The contention is that if those parties are not seeking a defense or indemnification, then they have reason to sign the stipulation entering judgment for United Financial, rendering moot their motion to dismiss. (Docket 34 at 3). If they refuse to stipulate that the policies referred to in the complaint do not provide coverage for Newsom’s injuries and damages, United Financial maintains, then there exists an actual controversy.

 

FAC Trucking, Frances Cline and Michael Cline did not reply. The docket reflects that none of the parties have signed the stipulation granting United Financial judgment in this action. In light of the general rule cited above that a case such as this one presents an actual case or controversy and the lack of support for the motion to dismiss, other than the parties’ word that they will refrain from seeking a defense or indemnification under the United Financial policies, the Court finds dismissal on these grounds to be inappropriate.

 

V. CONCLUSION

 

The Court ORDERS as follows:

 

1. That Newsom’s Motion to Dismiss, or, Alternatively, Motion to Transfer Venue to the Eastern District of Texas, Beaumont Division [Docket 6] be GRANTED to the extent that United Financial’s complaint is dismissed against Newsom for lack of personal jurisdiction;

 

2. That Newsom’s Motion for Expedited Hearing, or, in the Alternative, Motion for Expedited Decision [Docket 10] be DENIED;

 

3. That FAC Trucking, Frances Cline and Michael Cline’s Motion to Dismiss [Docket 34] be DENIED; and

 

4. That Newsom’s Amended Motion to Dismiss, or, Alternatively, to Transfer Venue and Alternative Motion to Stay [Docket 47] be DENIED as moot.

 

The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any unrepresented party.