Court of Appeals of Missouri, Western District, Division Four

May 17, 2022, Opinion Filed

WD84645

Reporter

2022 Mo. App. LEXIS 300 *; 2022 WL 1548013

THOMAS YUNCKER AND CHRISTOPHER GUTIERREZ, Respondents, v. DODDS LOGISTICS, LLC AND KEITH DODDS; Respondents, ZURICH AMERICAN INSURANCE COMPANY, Appellant.

Notice: NOT FINAL UNTIL EXPIRATION OF THE REHEARING PERIOD.

Prior History:  [*1] Appeal from the Circuit Court of Jackson County, Missouri. Honorable Bryan Round, Judge.

Core Terms

motion to intervene, circuit court, trial court, post-judgment, intervene, window, parties, party to a suit, after-trial, insured, entry of judgment, confirming, aggrieved, residents, vacate, drive, flash, standing to appeal, arbitration award, non-party

Case Summary

Overview

HOLDINGS: [1]-The insurer had no standing to appeal the judgment because it was not a party to the suit when the judgment was entered and did not become a party to the suit when it filed a post-judgment motion to intervene. The post-judgment filing of the motion to intervene did not affect the judgment’s eligibility for appeal under Mo. Sup. Ct. R. 74.01(a) or its finality for purposes of appeal under Mo. Sup. Ct. R. 81.05(a) 30 days after the judgment’s entry.

Outcome

Appeal dismissed.

LexisNexis® Headnotes

Torts > … > Settlements > Multiple Party Settlements > Indemnity

HN1  Multiple Party Settlements, Indemnity

While Mo. Rev. Stat. § 537.065.1 does not explicitly require that insurers have the opportunity to defend a tortfeasor without reservation before a non-execution agreement is entered, Missouri courts have interpreted the statute as establishing this sequence of events.

Civil Procedure > Parties > Intervention > Intervention of Right

HN2  Intervention, Intervention of Right

Before a judgment may be entered against any tortfeasor after such tortfeasor has entered into a contract under this section, the insurer or insurers shall be provided with written notice of the execution of the contract and shall have thirty days after receipt of such notice to intervene as a matter of right in any pending lawsuit involving the claim for damages.

Civil Procedure > Parties > Intervention

Governments > Legislation > Statute of Limitations > Time Limitations

HN3  Parties, Intervention

A motion to intervene filed beyond the 30-day limitation of Mo. Rev. Stat. § 537.065.2 is untimely.

Civil Procedure > Appeals > Appellate Jurisdiction > Final Judgment Rule

HN4  Appellate Jurisdiction, Final Judgment Rule

Any party to a suit aggrieved by any judgment of any trial court in any civil cause from which an appeal is not prohibited by the constitution is permitted to take an appeal from a final judgment in the case. Mo. Rev. Stat. § 512.020.

Civil Procedure > Appeals > Appellate Jurisdiction > Final Judgment Rule

Civil Procedure > Appeals > Appellate Jurisdiction > State Court Review

HN5  Appellate Jurisdiction, Final Judgment Rule

An appeal lies from a judgment that resolves all issues as to all parties pending before the court when entered.

Civil Procedure > Appeals > Appellate Jurisdiction > Final Judgment Rule

HN6  Appellate Jurisdiction, Final Judgment Rule

Pursuant to Mo. Sup. Ct. R. 74.01(a), judgments resolving all issues then pending in a case are sometimes referred to in Missouri jurisprudence as final judgments.

Civil Procedure > Judgments > Relief From Judgments > Altering & Amending Judgments

Civil Procedure > Appeals > Appellate Jurisdiction > Lower Court Jurisdiction

HN7  Relief From Judgments, Altering & Amending Judgments

Mo. Sup. Ct. R. 75.01,which states that a trial court retains control over judgments during the 30-day period after entry of judgment and may, after giving the parties an opportunity to be heard and for good cause, vacate, reopen, correct, amend, or modify its judgment within that time. The purpose of Mo. Sup. Ct. R. 75.01 is to enable the trial court to rectify any errors in the judgment, and thus simplify or forestall any further litigation at the appellate level. Once a Rule 74.01(a)] judgment is entered, the 30-day time period under Rule 75.01 begins to run.

Civil Procedure > Appeals > Reviewability of Lower Court Decisions > Adverse Determinations

Civil Procedure > Parties > Intervention > Time Limitations

Civil Procedure > Parties > Intervention > Motions to Intervene

HN8  Reviewability of Lower Court Decisions, Adverse Determinations

When a motion to intervene is filed before the entry of a Mo. Sup. Ct. R. 74.01(a) judgment, the trial court’s interlocutory ruling on the motion is incorporated into a later-filed Mo. Sup. Ct. R. 74.01(a) judgment, such that resolution of the motion affords any person aggrieved by the ruling standing to appeal. Also, when a motion to intervene is filed before the entry of judgment, a trial court’s failure to rule on the motion disqualifies the judgment as a Rule 74.01(a) judgment, because no appeal will lie from a denominated judgment that fails to resolve all issues then pending before the court for determination.

Civil Procedure > Parties > Intervention > Motions to Intervene

Civil Procedure > Parties > Intervention > Time Limitations

HN9  Intervention, Motions to Intervene

Once a Mo. Sup. Ct. R. 74.01(a) judgment is entered, the judgment becomes final for purposes of appeal under Mo. Sup. Ct. R. 81.05(a) at the expiration of the 30-day window set forth in Mo. Sup. Ct. R. 75.01 unless the trial court takes action as authorized by Rule 75.01 to vacate or reopen the judgment, or unless an authorized after-trial motion is filed, extending the court’s jurisdiction beyond the 30-day window for the limited purpose of ruling on the authorized after-trial motion. Mo. Sup. Ct. R. 78.01 through 78.07. A motion to intervene filed after a Rule 74.01(a) judgment is entered, and thus after Rule 75.01 is triggered, is not an authorized after-trial motion, because such motions must be filed by parties to the underlying matter.

Civil Procedure > Parties > Intervention > Motions to Intervene

Civil Procedure > Parties > Intervention > Time Limitations

HN10  Intervention, Motions to Intervene

Motions filed by non-parties are not authorized after-trial motions that extend the circuit court’s jurisdiction pursuant to Mo. Sup. Ct. R. 81.05(a). A motion to intervene, therefore, is not an authorized after-trial motion.

Civil Procedure > Parties > Intervention > Motions to Intervene

Civil Procedure > Parties > Intervention > Time Limitations

Civil Procedure > … > Relief From Judgments > Grounds for Relief from Final Judgment, Order or Proceeding > Vacation of Judgments

HN11  Intervention, Motions to Intervene

Though a motion to intervene is not an authorized after-trial motion, it is nonetheless a motion that is allowed to be filed after a Mo. Sup. Ct. R. 74.01(a) judgment is entered. The mere filing of a post-judgment motion to intervene by a non-party, however, does not alter the judgment’s eligibility for appeal under Rule 74.01(a), or mean that the judgment will not automatically become final for purposes of appeal under Mo. Sup. Ct. R. 81.05(a) unless the trial court takes timely, authorized action to reopen or vacate the judgment. And, because a post-judgment motion to intervene is not an authorized after-trial motion, it must be ruled on, if at all, within the 30-day window contemplated by Mo. Sup. Ct. R. 75.01.

Civil Procedure > Appeals > Appellate Jurisdiction > Final Judgment Rule

Civil Procedure > Parties > Intervention > Time Limitations

Civil Procedure > Parties > Intervention > Motions to Intervene

HN12  Appellate Jurisdiction, Final Judgment Rule

When a post-judgment motion to intervene is not ruled on within 30 days of entry of a Mo. Sup. Ct. R. 74.01(a) judgment, the judgment becomes final for purposes of appeal under Mo. Sup. Ct. R. 81.05(a), and the movant, who is not aggrieved by the judgment, remains a non-party to the proceeding, the same status the movant had when the judgment was entered.

Civil Procedure > Appeals > Reviewability of Lower Court Decisions > Adverse Determinations

Civil Procedure > … > Justiciability > Standing > Personal Stake

HN13  Reviewability of Lower Court Decisions, Adverse Determinations

To be a party, a person must either be named as a party in the original proceedings, or be later added as a party by appropriate trial court orders. Further, the rule that only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment, is well settled.

Civil Procedure > Parties > Intervention > Motions to Intervene

Governments > Courts > Judicial Precedent

Civil Procedure > Parties > Intervention > Time Limitations

HN14  Intervention, Motions to Intervene

Missouri cases are clear that an appellate court does not interpret a failure to rule on a motion to intervene as a ruling sub silentio.

Civil Procedure > Parties > Intervention > Motions to Intervene

Civil Procedure > Parties > Intervention > Time Limitations

HN15  Intervention, Motions to Intervene

Although a post-judgment motion to intervene is allowed to be filed, Mo. Sup. Ct. R. 75.01 does not require a trial court to take any action on a motion filed by a non-party. And, the only rule that deems a trial court’s inaction on a post-judgment motion to be a denial is Mo. Sup. Ct. R. 78.06, which treats an authorized after-trial motion as overruled for all purposes if not ruled on within 90 days after the last such timely motion was filed.

Civil Procedure > Remedies > Provisional Remedies > Garnishment

Civil Procedure > Judgments > Enforcement & Execution > Garnishment

HN16  Provisional Remedies, Garnishment

The Missouri Supreme Court has stated that a tort-action judgment is not conclusive on the parties in the garnishment suit as to facts not actually litigated in the first action and to facts that were merely evidentiary or inferentially involved in the first.

Counsel: For ZURICH AMERICAN INSURANCE COMPANY, Appellant: WATTERS, RUSSELL F, Attorney for Appellant, ST LOUIS, MO; WOLF, TIMOTHY JOHN, Co-Counsel for Appellant, ST LOUIS, MO; UDE, LUCAS JAMES, Co-Counsel for Appellant, ST LOUIS, MO.

For YUNCKER, THOMAS, Respondent: BURNS, JEFFREY JOSEPH, Attorney for Respondent, KANSAS CITY, MO; DOLLAR, TIM EUGENE, Co-Counsel for Respondent, KANSAS CITY, MO; DOLLAR, LAUREN ALYSSA, Co-Counsel for Respondent, KANSAS CITY, MO.

For DODDS LOGISTICS, LLC, Respondent: SCOTT, JOSHUA DAVID, Attorney for Respondent, KANSAS CITY, MO.

For DODDS, KEITH, Respondent: SCOTT, JOSHUA DAVID, Attorney for Respondent, KANSAS CITY, MO.

For GUTIERREZ, CHRISTOPHER, Respondent: EMISON, MARK ADAM, Attorney for Respondent, LEXINGTON, MO; MANNERS, MICHAEL W, Co-Counsel for Respondent, LEXINGTON, MO; THRASHER, ALEX JOSEPH, Co-Counsel for Respondent, LEXINGTON, MO.

Judges: Before Division Four: Cynthia L. Martin, C.J., Janet Sutton, J. and Gary W. Lynch, Sp. J. Martin, C.J. and Lynch, Sp. J. concur.

Opinion by: Janet Sutton

Opinion

Zurich American Insurance Co. (Zurich) appeals a Jackson County Circuit Court judgment confirming an arbitration [*2]  award that found Mr. Keith Dodds and Dodds Logistics, LLC (Dodds Logistics) negligent in an October 2020 tractor-trailer/motor vehicle accident in Kansas and awarded damages to Mr. Thomas Yuncker and Mr. Christopher Gutierrez. Zurich contends that the circuit court erred in failing to rule on its post-judgment motion to intervene, denying or impliedly denying its motion to vacate or set aside the judgment, and entering the judgment without proper notice to Zurich under section 537.065.2.¹ Because Zurich is not a party to the suit, nor aggrieved by the judgment, we dismiss the appeal.

Driving on behalf of Dodds Logistics, Mr. Dodds fell asleep behind the wheel of a tractor-trailer in October 2020 and struck Mr. Yuncker’s vehicle as it slowed while he approached vehicles and a police car with flashing lights parked on the shoulder of a highway in Johnson County, Kansas. Mr. Yuncker was working as an Uber driver at the time, and passenger Mr. Gutierrez was in the back seat. The impact pushed Mr. Yuncker’s vehicle into a tractor-trailer at the side of the highway. Both men had to be extricated from the Uber vehicle, and both sustained serious injuries that will have lasting consequences.

Mr. Yuncker and Mr. [*3]  Gutierrez filed a petition alleging negligence and negligence per se in Jackson County Circuit Court on December 28, 2020, against Mr. Dodds and Dodds Logistics. Mr. Yuncker, Mr. Gutierrez, and Mr. Dodds are Kansas residents. Dodds Logistics is a Kansas corporation. The Dodds Respondents did not object to jurisdiction or venue, although their January 2021 answer to the petition denied a number of allegations and asserted several affirmative defenses.²

Counsel for the Dodds Respondents wrote to four insurance companies, Zurich among them, on February 5, 2021, enclosing a flash drive with information about the accident and injuries, and a more detailed letter from counsel containing the VIN numbers for vehicles involved in the crash, including an “Amazon box trailer.” The more detailed letter on the flash drive also stated that Mr. Dodds and Dodds Logistics were tendering their defense to the letter’s recipients. Noting that time was of the essence, the letter requested a response within 14 days of receipt as to whether the companies would defend and indemnify Mr. Dodds and /or Dodds Logistics. The letter further stated that the primary insurance carrier had paid the policy limits ($1 [*4]  million) to the injured parties “pursuant to a non-execution agreement[.]”³

Zurich was potentially implicated because it had issued a commercial auto insurance policy covering the Amazon trailer that Mr. Dodds was hauling when the accident happened.⁴ Two insurers responded that they had not insured the Dodds vehicle in October 2020; a third insurer did not ultimately respond, but had asked for a replacement flash drive, apparently lost in transit, which request was accommodated; Zurich acknowledges that it received the cover letter on February 10, 2021, and claims that it did not receive the flash drive but attempted to contact counsel by purportedly leaving a voicemail message.⁵ Without indicating that the flash drive was missing, the company formally responded in a February 12, 2021, letter stating that it could not “confirm a valid policy number or alleged insured entity based on the information you provided.” Zurich stated that it had, accordingly, “cancelled” the claim.⁶ Zurich also stated that it would create a new claim number if a valid policy number for an allegedly insured entity were forwarded to the company.

Mr. Dodds and Dodds Logistics entered [*5]  an arbitration agreement in early March 2021 with Mr. Yuncker and Mr. Gutierrez. An evidentiary hearing was held before an arbitrator in April 2021. The arbitrator issued an award in May 2021. While the arbitrator did not find sufficient evidence to support a punitive-damages award, compensatory damages of $13,500,197.25 were awarded to Mr. Yuncker, and $7,500,000 to Mr. Gutierrez.

Mr. Yuncker and Mr. Gutierrez filed an unopposed application in the circuit court on May 13, 2021, to confirm the arbitration award.⁷ The court entered a judgment confirming the arbitration award on May 26, 2021, and thus resolved all issues then pending before the court. Two days later, Zurich filed a motion to intervene which included a request that the court allow Zurich to file a motion to vacate and set aside the judgment.⁸ Mr. Yuncker and Mr. Gutierrez filed a response to the motion, and, on June 14, 2021, Zurich filed a pleading requesting a hearing before June 24, 2021, on the motion to intervene, but made no attempt to notice a hearing for a specific date. The court issued no ruling on the motion to intervene within the 30-day period after entry of its May 26, 2021, judgment confirming the arbitration [*6]  award. Zurich filed a notice of appeal to this Court on July 2, 2021.⁹

Legal Analysis

Zurich has raised nine points relied on. Five relate to the circuit court’s failure to rule on the motion to intervene. Three relate to the court ‘s alleged denial or implied denial of the motion to vacate and set aside the judgment. One alleges that it was error to enter a judgment when Zurich did not receive the notice required by section 537.065.2.

We cannot address these points without first considering the question of Zurich ‘s standing to bring the appeal. See Stichler v. Jesiolowski, 547 S.W.3d 789, 793 (Mo. App. W.D. 2018) (“The right to appeal . . . within the meaning of § 512.020 is jurisdictional.” (citation omitted) (footnote omitted)). HN4 “Any party to a suit aggrieved by any judgment of any trial court in any civil cause from which an appeal is not prohibited by the constitution” is permitted to take an appeal from a “[f]inal judgment in the case . . . .” § 512.020 (emphasis added). We asked the Appellant and Respondents to address whether Zurich’s post-judgment motion to intervene afforded it standing to appeal the judgment. We conclude that it did not.

The May 26, 2021, judgment qualified as a judgment under Rule 74.01(a),¹⁰ as it was “a decree” or “any order from which an appeal lies” that was “signed [*7]  by the judge and denominated ‘judgment.'” HN5 An appeal lies from a judgment that resolves all issues as to all parties pending before the court when entered. See Boley v. Knowles, 905 S.W.2d 86, 88 (Mo. banc 1995) (“An appealable judgment disposes of all issues in a case, leaving nothing for future determination.”); § 511.020 (defining a “judgment” as “the final determination of the right of the parties in the action.”).¹¹

HN7 The circuit court’s entry of a Rule 74.01(a) judgment triggered Rule 75.01, which states that a “trial court retains control over judgments during the thirty-day period after entry of judgment and may, after giving the parties an opportunity to be heard and for good cause, vacate, reopen, correct, amend, or modify its judgment within that time.” See In re Marriage of Short, 847 S.W.2d 158, 162 (Mo. App. S.D. 1993) (“The purpose of Rule 75.01 is to enable the trial court to rectify any errors in the judgment, and thus simplify or forestall any further litigation at the appellate level. Once a [Rule 74.01(a)] judgment is entered . . . the thirty-day time period under Rule 75.01 begins to run.” (citation omitted)).

Zurich was not a party to the underlying suit when the court’s judgment was entered on May 26, 2021. See State ex rel. AJKJ, Inc. v. Hellmann, 574 S.W.3d 239, 242 (Mo. banc 2019) (holding that subdivision residents who filed a motion to intervene in a deed-reformation case after judgment was entered were not parties [*8]  to the suit when judgment was entered). Plainly, when the judgment was entered, Zurich was neither a party to the suit nor aggrieved by the judgment, thus affording it no standing to appeal.

Zurich contends that, because it is permissible to file a motion to intervene within 30 days after a Rule 74.01(a) judgment is entered, it became a “party” to the suit with the right to appeal the judgment once its motion to intervene was filed. We disagree.

Zurich’s contention relies on caselaw involving motions to intervene filed before a Rule 74.01(a) judgment was entered. HN8 When a motion to intervene is filed before the entry of a Rule 74.01(a) judgment, the trial court’s interlocutory ruling on the motion is incorporated into a later-filed Rule 74.01(a) judgment, such that resolution of the motion affords any person aggrieved by the ruling standing to appeal. See State ex rel. Koster v. ConocoPhillips Co., 493 S.W.3d 397, 401-02 (Mo. banc 2016). Also, when a motion to intervene is filed before the entry of judgment, a trial court’s failure to rule on the motion disqualifies the judgment as a Rule 74.01(a) judgment, because no appeal will lie from a denominated judgment that fails to resolve all issues then pending before the court for determination.¹² See Henson v. Merob Logistics, LLC, 633 S.W.3d 838, 842-43 (Mo. App. W.D. 2021) (dismissing appeal taken from denominated judgment where trial court failed to rule [*9]  on pending motion to intervene filed before judgment was entered).

Here, Zurich’s motion to intervene was filed after the circuit court’s entry of a Rule 74.01(a) judgment that resolved all issues then pending before the court and was therefore eligible for appeal, triggering Rule 75.01. This is a distinction with a difference that renders ConocoPhillips, Henson, and other similar cases Zurich relies on of no relevance.

HN9 Once a Rule 74.01(a) judgment is entered, the judgment becomes final for purposes of appeal under Rule 81.05(a) at the expiration of the 30-day window set forth in Rule 75.01 unless the trial court takes action as authorized by Rule 75.01 to vacate or reopen the judgment, or unless an authorized after-trial motion is filed, extending the court’s jurisdiction beyond the 30-day window for the limited purpose of ruling on the authorized after-trial motion. See Rules 78.01 through 78.07. A motion to intervene filed after a Rule 74.01(a) judgment is entered, and thus after Rule 75.01 is triggered, is not an authorized after-trial motion, because such motions must be filed by parties to the underlying matter. See State ex rel. AJKJ, Inc., 574 S.W.3d at 242 (Mo. banc 2019) (HN10[] “Motions filed by non-parties are not authorized after-trial motions that extend the circuit court’s jurisdiction pursuant to Rule 81.05(a). A motion to intervene, therefore, is not an authorized [*10]  after-trial motion.”).

HN11 Though a motion to intervene is not an authorized after-trial motion, it is nonetheless a motion that is allowed to be filed after a Rule 74.01(a) judgment is entered. Id. at 242-43. The mere filing of a post-judgment motion to intervene by a non-party, however, does not alter the judgment’s eligibility for appeal under Rule 74.01(a), or mean that the judgment will not automatically become final for purposes of appeal under Rule 81.05(a) unless the trial court takes timely, authorized action to reopen or vacate the judgment. And, because a post-judgment motion to intervene is not an authorized after-trial motion, it must be ruled on, if at all, within the 30-day window contemplated by Rule 75.01. Id. at 243 (holding court’s ruling on motion to intervene was void because a motion to intervene filed “during the 30-day window in which the circuit court retained jurisdiction” was not ruled on “until after the 30[-]day[] window expired.”).

HN12 When a post-judgment motion to intervene is not ruled on within 30 days of entry of a Rule 74.01(a) judgment, the judgment becomes final for purposes of appeal under Rule 81.05(a), and the movant, who is not aggrieved by the judgment, remains a non-party to the proceeding, the same status the movant had when the judgment was entered. [*11] ¹³ This is the conclusion the Missouri Supreme Court reached in State ex rel. AJKJ, Inc., 574 S.W.3d at 241, 243-44, where residents living in a subdivision moved to intervene in a deed-reformation case after a Rule 74.01(a) judgment was entered, but while the trial court retained jurisdiction over the judgment under Rule 75.01. The Missouri Supreme Court held the following as to the circuit court’s failure to rule on the pending motion to intervene while it retained Rule 75.01 jurisdiction over the judgment:

Here, the reformation judgment became final pursuant to Rule 81.05(a)(1) . . . 30 days after the circuit court first entered judgment reforming the deed. The circuit court had no legal basis to take further action after that point. Although Residents filed their motion to intervene during the 30-day window in which the circuit court retained jurisdiction, the court did not rule on the motion to intervene until after the 30 days [sic] window expired. The circuit court . . . lacked jurisdiction to rule on Resident [s’] motion to intervene after the underlying reformation judgment became final. As a result, the court’s ruling on Residents’ motion to intervene was void.

. . . . Residents, therefore, never became parties to the reformation action. Id. at 243 (emphasis added). See also City of Montgomery v. Newson, 469 S.W.2d 54, 56 (Mo. App. 1971) (“Appellant’s [*12]  motion, although filed within the thirty-day period, was not acted on by the court within that period. Upon the expiration of the thirty-day period, the judgment became final, the court lost jurisdiction to reopen it, and no case was then pending into which [movant] could intervene. In order to intervene there must be an action pending into which to intervene.”).

The same is true here. Zurich was not a party to the suit when the circuit court entered its May 26, 2021, judgment. Zurich did not become a party to the suit by the mere filing of a post-judgment motion to intervene. And Zurich remained a non-party to the suit, unaggrieved by the judgment, when the circuit court failed to rule on the motion to intervene during the 30-day window contemplated by Rule 75.01. Accordingly, Zurich lacks statutory authority to appeal from the judgment confirming the arbitration award under section 512.020, and this appeal must be dismissed. See Henson, 633 S.W.3d at 841 (observing that right to appeal is statutory and that “[a]n appeal without statutory sanction confers no authority upon an appellate court except to enter an order dismissing the appeal.” (citation omitted)).

Zurich attempts to escape this reality by claiming in its first five points [*13]  relied on that the circuit court’s failure to rule on the pending motion to intervene during the 30-day window following entry of the May 26, 2021, judgment is, in effect, a denial of the motion.¹⁴ This argument is not persuasive for two reasons. HN14 First, our cases are clear that we do not interpret a failure to rule on a motion to intervene as a ruling sub silentio. See, e.g., Howe v. Heartland Midwest, LLC, 604 S.W.3d 774, 779 (Mo. App. W.D. 2020); see also Daniel v. Ind. Mills & Mfg., Inc., 103 S.W.3d 302, 318 (Mo. App. S.D. 2003) (refusing to review claim that trial court erred in ruling on motion where record did not show it was ruled on, court states, “Absent a finding by the trial court on an issue, the issue is not for appellate review. To undertake to review an issue not having been decided by the trial court would be akin to rendering an advisory opinion, something appellate courts are wont not to do.” (citation omitted)).

HN15 Second, and even more compelling, although a post-judgment motion to intervene is allowed to be filed, Rule 75.01 does not require a trial court to take any action on a motion filed by a non-party. And the only rule that deems a trial court’s inaction on a post-judgment motion to be a denial is Rule 78.06, which treats an authorized after-trial motion as “overruled for all purposes” if not ruled on within 90 days after the [*14]  last such timely motion was filed.

The circuit court’s failure to rule on Zurich’s motion to intervene within the 30-day window during which it had the jurisdiction to do so therefore is neither deemed a denial of the motion nor independently actionable error.¹⁵ See State ex rel. AJKJ, Inc., 574 S.W.3d at 242-43 (declaring circuit court ruling on post-judgment motion to intervene entered more than 30 days after judgment was entered to be void and declaring the movants to have no status in the case as parties).

Because Zurich has no standing to appeal from the judgment, its appeal must be dismissed. We are not troubled by Zurich’s implication that a ruling depriving it of the opportunity to appeal and/or of the opportunity to intervene in the underlying case will result in manifest injustice or a miscarriage of justice. Zurich ‘s constitutionally based claims—V and VII—have been considered and rejected in cases such as Loveland v. Austin, 626 S.W.3d 716, 728, 730-31 (Mo. App. E.D. 2021) (finding no violation of constitutional rights of due process and access to the courts in light of insurer ‘s opportunity to litigate coverage issues in a pending garnishment proceeding); see also Knight ex rel. Knight v. Knight, 609 S.W.3d 813, 820 (Mo. App. W.D. 2020) (ruling that, in context of claims of alleged constitutional violations, 2017 amendment to section 537.065.2 did not give “insurers [*15]  the right to contest the insured’s liability, and the claimant’s damages, on the merits, whatever the status of the litigation at the time of the insurer’s intervention.”). Zurich’s policy coverage issues can be litigated in the Kansas proceedings. HN16 The Missouri Supreme Court has stated that a tort-action judgment “is not conclusive on the parties in the garnishment suit as to facts not actually litigated in the first action and to facts that were merely evidentiary or . . . inferentially involved in the first.” Allen v. Bryers, 512 S.W.3d 17, 33 (Mo. banc 2016) (citation omitted).

Conclusion

Zurich was not a party to the suit when the May 26, 2021, judgment was entered and did not become a party to the suit when it filed a post-judgment motion to intervene. The post-judgment filing of the motion to intervene did not affect the judgment ‘s eligibility for appeal under Rule 74.01(a) or its finality for purposes of appeal under Rule 81.05(a) 30 days after the judgment’s entry. Because Zurich is not a party to the suit aggrieved by the judgment, it has no standing to appeal the judgment. We dismiss the appeal.

/s/ Janet Sutton

Janet Sutton, Judge

Martin, C.J. and Lynch, Sp. J. concur.

End of Document

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¹ Statutory references are to RSMo. (20 17 Supp.), unless otherwise indicated. Note that more recent amendments to section 537.065 took effect in 2021. The parties do not contend that these changes apply here.

² Mr. Thomas Yuncker, Mr. Keith Dodds, and Dodds Logistics, LLC briefly argue that Zurich American Insurance Co. (Zurich) did not engage in a choice-of-law analysis to establish that section 537.065 applies to these facts. We do not consider this matter further as it has not been briefed.

³ Mr. Yuncker and Mr. Christopher Gutierrez also referred to this non-execution agreement in the application to confirm the arbitration award. They stated that it was entered in exchange for payment of the primary insurer’s policy limit and that it required them to arbitrate their dispute “in the event no other insurance company agreed to provide an unconditional defense of [their] personal injury claims arising out of the subject crash.” This non-execution agreement has not been included in the legal file, and it is unknown when the parties signed it. On the basis of the February 5, 2021, communication with Zurich and the other insurance companies, however, the non-execution agreement was arguably entered before they were given an opportunity to defend and indemnify Mr. Dodds and Dodds Logistics. HN1 While section 537.065.1 does not explicitly require that insurers have the opportunity to defend a tortfeasor without reservation before a non-execution agreement is entered, Missouri courts have interpreted the statute as establishing this sequence of events. See Desai v. Seneca Specialty Ins. Co., 581 S.W.3d 596, 600 (Mo. banc 2019) (noting that amended statute added “a prerequisite to the execution of a valid contract that did not previously exist. Under the amended statute, a tortfeasor is able to enter into a contract only if the tortfeasor’s insurer or indemnitor ‘had [sic] the opportunity to defend the tort-feasor without reservation but refuse[d] to do so.’ Section 537.065.1, RSMo Supp. 2017.” (emphasis added)). The amended statute stated in relevant part, “Any person having an unliquidated claim for damages against a tort-feasor, on account of personal injuries, bodily injuries, or death, provided that, such tort-feasor’s insurer or indemnitor has the opportunity to defend the tort-feasor without reservation but refuses to do so, may enter into a contract with such tort-feasor . . . .” § 537.065.1 (emphasis added). While Zurich contends that the non-execution agreement was not valid because Zurich had not been given the opportunity to defend before it was entered, nothing in the record establishes that the agreement was entered before the primary insurer was given the opportunity to defend. Zurich also contends that the non-execution agreement was entered before the litigation was filed, and thus, with no case or controversy in issue, the circuit court lacked jurisdiction to consider the matter. Without the agreement in the record, we cannot conclude that it was entered before Mr. Yuncker and Mr. Gutierrez filed a petition against the tortfeasors in Jackson County Circuit Court.

⁴ Because no one has asserted that Zurich’s insured was a tortfeasor, it is unclear to this Court whether section 537.065 actually has any applicability. But that is a question for another court and another proceeding.

⁵ As part of its argument in support of the first point relied on, Zurich asserts that it was given “just 14 days to respond to the February 5, 2021, letter, . . .” and, in fact, it did so. Interestingly, this time limitation appeared only in the letter included on the flash drive.

⁶ The communications between Zurich and counsel for Mr. Dodds and Dodds Logistics are not a model of clarity. It is arguable that a letter stating that a claim is cancelled, written in response to a request that the insurer respond within 14 days by indicating whether it would provide a defense and indemnification, is the equivalent of a refusal to defend and indemnify as it did not conform to the requester’s terms by the deadline. See Woods ex rel. Woods v. Cory, 192 S.W.3d 450, 459 (Mo. App. S.D. 2006) (“Inherent in the offeror’s power as master of his offer is the power to insist that the offer may terminate upon the occurrence of a condition and that it may only be accepted in accordance with the conditions stated by it.” (citation omitted)).

⁷ The application was filed before the court in which the initial petition had been filed, so the litigation was pending when Zurich received the February 5, 2021, communication from counsel for Mr. Dodds and Dodds Logistics and remained pending until the circuit court entered the judgment confirming the arbitration award. Zurich repeatedly claims on appeal that it was never notified about the existence of the pending lawsuit and implies that this is a requirement under section 537.065. HN2 Though the company’s policy may require such notification and any alleged shortcomings in notice may presumably be addressed during declaratory-judgment/garnishment proceedings currently pending in Kansas, the statute simply requires notification about the non-execution agreement before judgment may be entered. § 537.065.2 (“Before a judgment may be entered against any tort-feasor after such tort-feasor has entered into a contract under this section, the insurer or insurers shall be provided with written notice of the execution of the contract and shall have thirty days after receipt of such notice to intervene as a matter of right in any pending lawsuit involving the claim for damages.”).

⁸ The proposed motion to vacate and set aside the judgment, attached as an exhibit to the motion to intervene, invoked the authority of Rule 55.27 and section 537.065. The motion to intervene invoked the authority of Rule 52.12 and section 537.065. Under section 537.065, Zurich would have had 30 days from the date it received notice of the non-execution agreement within which to exercise its right to intervene in the underlying litigation. § 537.065.2. The non-execution agreement did not have to be referred to as a contract under section 537.065 for the statute to apply. § 537.065.3 (“The provisions of this section shall apply to any covenant not to execute or any contract to limit recovery to specified assets, regardless of whether it is referred to as a contract under this section.”). Zurich arguably received notice on February 10, 2021, and did not file the motion to intervene until more than three months later on May 28, 2021. HN3 A motion to intervene filed beyond the 30-day limitation of section 537.065.2 is untimely. See Barnett v. Columbia Maint. Co., 632 S.W.3d 396, 402 (Mo. App. E.D. 2021).

⁹ Zurich filed a declaratory judgment action on June 7, 2021, in a Kansas district court against Mr. Dodds, Dodds Logistics, Mr. Yuncker, and Mr. Gutierrez; the latter two have counterclaimed for garnishment, and the Dodds Respondents have counterclaimed for breach of contract.

¹⁰ Rule references are to Mo.R.Civ.P. (2021), unless otherwise indicated.

¹¹ HN6 Rule 74.01(a) judgments resolving all issues then pending in a case are sometimes referred to in our jurisprudence as “final judgments.” In fact, they are merely appeal-eligible judgments that do not become “final judgments” until an appeal can actually be filed under Rule 81.05.

¹² The exception for properly certified Rule 74.01(b) judgments is inapplicable to this case.

¹³ HN13 As recently noted by this Court, “To be a party, a person must either be named as a party in the original proceedings, or be later added as a party by appropriate trial court orders.” MILA Homes, LLC v. Scott, 608 S.W.3d 658, 661 (Mo. App. W.D. 2020) (citations omitted). Further, “The rule that only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment, is well settled.” Id. (citations omitted).

¹⁴ Presumed in Zurich’s argument, although not at all developed, is that Zurich would have been entitled to pursue an appeal of the May 26, 2021, judgment had the circuit court denied its post-judgment motion to intervene during the 30-day window contemplated by Rule 75.01. The validity of that premise should not be assumed, but it is not before us and will not be addressed.

¹⁵ To conclude otherwise would afford a non-party the power to manipulate when a Rule 74.01(a) judgment becomes final for purposes of appeal under Rule 81.05(a) by, for example, filing a post – judgment motion close to the expiration of the 30-day window during which a trial court retains jurisdiction over a judgment under Rule 75.01. We are aware of no authority for the proposition that a trial court commits error by failing to rule on a motion filed after a Rule 74.01(a) judgment is entered. See Henson v. Merob Logistics, LLC, 633 S.W.3d 838, 842-43 (Mo. App. W.D. 2021) (dismissing appeal because it was taken from judgment rendered ineligible for appeal under Rule 74.01(a) in light of unruled motion to intervene filed before judgment was entered, but not based on finding that trial court committed error in failing to rule on motion).

United States Court of Appeals for the Eleventh Circuit

May 23, 2022, Filed

No. 20-11617

Reporter

2022 U.S. App. LEXIS 13851 *; __ F.4th __; 2022 WL 1616872

JAMES RIVER INSURANCE COMPANY, a foreign corporation, Plaintiff-Appellant, versus RICH BON CORP., a Florida corporation d.b.a. The Mint Lounge, MARQUELL SHELLMAN, an individual, DAINA HILBERT, as Personal Representative of the Estate of David Hilbert, Defendants-Appellees.

Prior History:  [*1] Appeal from the United States District Court for the Southern District of Florida. D.C. Docket No. 1:16-cv-20273-JEM.

Core Terms

district court, state court, insured, declaratory, guideposts, nightclub, declaratory judgment action, cases, declaratory judgment, federal court, workers’ compensation, questions, policy limit, state law, lawsuit, overlapping, federal declaratory judgment, declaratory relief, duty to defend, federal claim, proceedings, concurrent, assault, battery, declare, factors, parties, comity, courts

Case Summary

Overview

HOLDINGS: [1]-The district court, in its application of the Ameritas factors, should not have focused on one of the federal claims almost to the exclusion of the other, and in doing so it failed to properly consider the totality of the circumstances; [2]-The district court should not have grafted a discrete, parallel-proceeding factor from abstention doctrine onto the Ameritas test; [3]-The district court overlooked the significant gains in efficiency the declaratory judgment action would generate.

Outcome

Judgment vacated and remanded.

LexisNexis® Headnotes

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Appellate Review

HN1  Federal Declaratory Judgments, Appellate Review

Ordinarily, federal courts have no margin for error on questions of the appellate court’s jurisdiction. But Declaratory Judgment Act cases are different, because that statute vests courts with discretion to say whether declaratory relief is appropriate in the underlying conflict.

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Appellate Review

Civil Procedure > … > Declaratory Judgments > State Declaratory Judgments > Discretionary Jurisdiction

HN2  Standards of Review, Abuse of Discretion

When a district court dismisses a declaratory judgment action, the appellate court reviews for abuse of discretion. A district court abuses its discretion (1) when it fails to consider a relevant and significant factor; (2) when it gives significant weight to an improper factor; or (3) when it commits a clear error of judgment in weighing the proper factors. A district court also abuses its discretion when it applies the wrong legal standard.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

HN3  Discretionary Jurisdiction, Factors

When district courts decide whether to proceed with declaratory judgment actions that raise issues also disputed in state court proceedings, they are called to balance conflicting interests—to foster efficient dispute resolution while still preserving the States’ interests in resolving issues of state law in their own courts. Discerning the propriety of declaratory relief requires a circumspect sense of the whole affair.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

HN4  Discretionary Jurisdiction, Factors

On one hand, a declaratory judgment action is often quite efficient, eliminating delays and uncertainty. It may enable, for example, a prospective defendant to ask the court to declare its rights and other legal relations, including whether it is liable to a prospective plaintiff for prior or planned future acts. 28 U.S.C.S. § 2201(a).

Insurance Law > … > Obligations of Parties > Insurers > Allegations in Complaints

Insurance Law > … > Property Insurance > Obligations > Duty to Defend

Insurance Law > Liability & Performance Standards > Good Faith & Fair Dealing > Duty to Defend

HN5  Insurers, Allegations in Complaints

Declaratory actions are especially helpful for third parties—insurance companies in particular. That is because a tort suit against an insured often generates distinct issues beyond whether the insured is liable for the tort, say, whether the insurer has a duty to defend, or whether the insured’s policy covers the liability alleged in the complaint. When the policy does not cover the liability even if all the facts alleged in the complaint are true, declaratory relief enables the insurance company to avoid the tort suit completely. And even when the policy does apply, a declaratory suit allows the insurance company to resolve its liability without waiting for every individual injured party to sue the insured. Declaratory judgments thus play a valuable role in this context, clarifying insurance companies’ liability quickly and directly.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Scope of Declaratory Judgments

HN6  Discretionary Jurisdiction, Factors

After all, while the Declaratory Judgment Act enables a prospective defendant to sue in federal court, it does not prevent the party sued from initiating a concurrent state court proceeding, 28 U.S.C.S. § 2201. Nor does anything in the Act prevent a state court defendant from bringing a federal declaratory judgment suit. What’s more, when the issues and parties match, each plaintiff competes to be first to the finish, because whichever case is decided earliest will have preclusive effect on common questions in the other.

Civil Procedure > … > Declaratory Judgments > State Declaratory Judgments > Scope of Declaratory Judgments

HN7  State Declaratory Judgments, Scope of Declaratory Judgments

Of central concern in this federalism analysis are cases competing to resolve state law issues that are not foreclosed under the applicable substantive law. When a federal court decides an unresolved question of state law, issue preclusion prevents the creation of state court precedent on that issue in the companion case. That, in turn, delays the final resolution of the question as applied to future suits because state supreme courts are the ultimate authority on questions of state law. So declaratory judgments have the potential to leave important questions of state law unanswered by state authorities and impede a State’s general authority to dispose of state law issues.

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Scope of Declaratory Judgments

HN8  Federal Declaratory Judgments, Scope of Declaratory Judgments

The Declaratory Judgment Act thus is not a license to supplant state court litigation in every case. If it were, the byproducts—waste, delay, and needless competition—would mean the Act sometimes did more harm than good. As the Supreme Court cautioned in gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided. Nor can the benefits of a declaratory judgment suit be ignored—it is a remedial arrow in the district court’s quiver, fashioned by Congress to provide a new form of relief when the need arises.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Scope of Declaratory Judgments

HN9  Discretionary Jurisdiction, Factors The Declaratory Judgment Act vests district courts with discretion to dismiss declaratory suits when, in their best judgment, the costs outweigh the benefits. Its language is spare, but direct: federal courts may declare the rights and other legal relations of any interested party seeking such declaration, 28 U.S.C.S. § 2201(a). The Act thus makes an explicit textual commitment to discretion. So while federal courts normally have an unflagging obligation to exercise our jurisdiction, where declaratory judgments are concerned this imperative yields to considerations of practicality and wise judicial administration.

Civil Procedure > … > Federal & State Interrelationships > Federal Common Law > Applicability

Insurance Law > Remedies > Declaratory Judgments > Discretionary Jurisdiction

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN10  Federal Common Law, Applicability

There are guideposts for district courts to consider when deciding whether to dismiss a federal declaratory judgment action that overlaps with a state case: (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.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

Governments > Courts > Judicial Comity

Civil Procedure > … > Declaratory Judgments > State Declaratory Judgments > Scope of Declaratory Judgments

HN11  Discretionary Jurisdiction, Factors

As a whole the guideposts account for the federalism and comity concerns generated by competing cases, as well as the comparative utility of the declaratory judgment action. To be sure, courts are not restricted to this set of factors—the list is not absolute, and no single factor is controlling. Indeed, we have characterized the inquiry as a totality-of-the-circumstances analysis.

Civil Procedure > … > Declaratory Judgments > Federal Declaratory Judgments > Scope of Declaratory Judgments

HN12  Federal Declaratory Judgments, Scope of Declaratory Judgments

The existence of a parallel proceeding is not a prerequisite to a district court’s refusal to entertain an action under 28 U.S.C.S. § 2201(a), the Declaratory Judgment Act. Courts possess unique and substantial discretion under the Act.

Civil Procedure > Preliminary Considerations > Federal & State Interrelationships > Abstention

Civil Rights Law > … > Procedural Matters > Federal Versus State Law > Abstention

HN13  Federal & State Interrelationships, Abstention

Consequently, and unlike some abstention doctrines that are more prudential in nature, a parallel proceeding is not a mandatory prerequisite to applying the guideposts.

Civil Procedure > Preliminary Considerations > Federal & State Interrelationships > Abstention

HN14  Federal & State Interrelationships, Abstention

While a concurrent state proceeding is still significant under Ameritas, it is not dispositive—in either direction.

Civil Procedure > … > Federal Declaratory Judgments > Discretionary Jurisdiction > Factors

Insurance Law > Remedies > Declaratory Judgments > Discretionary Jurisdiction

HN15  Discretionary Jurisdiction, Factors

Every claim matters, because Ameritas requires a totality-of-the-circumstances analysis. And a comprehensive analysis is impossible when a court only considers half of the federal claims. Regardless of the guideposts it applies, a district court must assess the claims raised in a federal declaratory judgment action evenhandedly. That means a court cannot cherry pick for its Ameritas analysis the claims that favor dismissing—or proceeding with—a federal action. If the court only considers issues raised in both the state and federal cases, it will always underestimate the need to resolve the issues unique to the declaratory action. And if it only assesses the unique federal claims, the opposite result will follow; the court will underestimate the federalism concerns raised by the overlapping issues. Both approaches are unreasonable. Instead, to appropriately assess the degree of similarity between concurrent state and federal proceedings, a district court needs to look at the cases as a whole.

Evidence > Relevance > Relevant Evidence

HN16  Relevance, Relevant Evidence

A totality-of-the-circumstances analysis only works when a court considers all of the relevant details. To do otherwise leaves weights that should be balanced off the scales, or, if used more nefariously, would tip them in favor of a result chosen in advance.

Counsel: For JAMES RIVER INSURANCE COMPANY, Plaintiff – Appellant: Eric A. Hiller, Junaid Savani, Kennedys Law, LLP, MIAMI, FL.

For RICH BON CORP., Defendant – Appellee: Meredith Chaiken, Whitelock & Associates, PA, FORT LAUDERDALE, FL; Tracy White, Law Office of Tracy White, JUPITER, FL; Thomas U. Graner, Graner Platzek & Allison, PA, BOCA RATON, FL.

For DAINA HILBERT, Defendant – Appellee: Anthony Murphy, Jermaine Thompson, Law Office of Jermaine O’Neill Thompson, PA, OAKLAND PARK, FL.

Judges: Before BRANCH, GRANT, and BRASHER, Circuit Judges. BRASHER, Circuit Judge, Concurring.

Opinion by: GRANT

HN1 Ordinarily, federal courts have no margin for error on questions of our jurisdiction. But Declaratory Judgment Act cases are different, because that statute vests courts with discretion to say whether declaratory relief is appropriate in the underlying conflict. Here that meant deciding whether the federal suit would interfere with a pending state action.

The district court chose to dismiss the federal case, concluding that it overlapped significantly with the one in state court. But in the process the court [*2]  overstepped the bounds of its discretion because it fully assessed only one of the claims for declaratory relief, rather than both of them. We therefore vacate and remand.

I.

Late one Miami summer night at the Mint Lounge, an argument between acquaintances escalated into a shootout. A guest at the nightclub, Marquell Shellman, was shot. So was club employee David Hilbert, who tragically died from his injuries.

The nightclub was insured by James River Insurance Company under a general liability policy, which covered “bodily injury and property damage liability.” The policy contained several restrictions on that coverage. To start, it excluded both worker’s compensation liability and employee-injury liability. The policy also imposed limits on coverage for bodily injuries “arising out of, resulting from, or in connection with” assault or battery. The limit per occurrence was $25,000, and the aggregate assault-and-battery limit was $50,000.

A few months after the shooting Shellman sued the nightclub in Florida state court, alleging that it was negligent for failing to provide adequate security; a lawsuit from Hilbert’s estate was expected too. So to determine the full extent of its liability [*3]  under the policy, James River filed a federal declaratory judgment action against Mint, Shellman, and Hilbert’s estate.

The insurer raised two claims in its complaint. First, it contended that because the nightclub shooting was an assault and battery, the policy limited recovery for any and all injuries to $50,000. Second, it argued that the worker’s compensation and employee-injury exclusions barred Hilbert from recovery because he was an employee of the nightclub. The district court stayed the case pending resolution of Shellman’s state court suit. Soon after, James River settled the state suit on the nightclub’s behalf for $50,000 minus claim expenses and costs—the total amount available under the assault and battery cap.

Ten months later, Hilbert’s estate sued the nightclub in Florida state court. One wrinkle for the estate was that the Florida worker’s compensation statute generally prohibits employees from bringing tort claims against their employers. See Fla. Stat. § 440.11(1). To get around that problem, the estate argued that the nightclub’s actions triggered a statutory exception for intentional torts. It alleged that the nightclub had engaged in conduct that it “knew”—based on similar incidents [*4]  in the past—”was virtually certain to result in injury or death to the employee.” See id. § 440.11(1)(b).

Both the estate’s tort action and James River’s federal declaratory judgment action thus required a decision on whether the Florida worker’s compensation statute applied to Hilbert. The tort suit, however, did not raise any questions about the insurance policy or its assault and battery limit. In fact, Florida law barred adding James River to that suit. See id. § 627.4136.

While its state court suit proceeded, Hilbert’s estate moved the federal district court to lift its stay of the declaratory action so that it could dismiss the case altogether. The court lifted the stay, but did not immediately dismiss the case. Meanwhile, James River amended its federal complaint to ask the court to declare not only that the $50,000 assault and battery limit applied, but also that the Shellman settlement had exhausted that coverage. In response, the estate again asked the court to exercise its discretion and dismiss the case in deference to the concurrent state court suit.

The district court considered whether to exercise jurisdiction in two steps. It first asked whether the two suits were parallel enough to compare at [*5]  all, concluding they were for two reasons: the claims in both cases involved Florida’s worker’s compensation law, and the defendants in the federal suit were also parties in the state action. It then moved on to consider whether the federalism and comity concerns generated by the declaratory action outweighed the efficiency gains of resolving the claims in federal court, applying the guideposts this Court provided in Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328 (11th Cir. 2005). Relying primarily on the conflict between one of the federal claims and the state case, the district court dismissed the case. James River appeals.

II.

HN2 When a district court dismisses a declaratory judgment action, we review for abuse of discretion. Ameritas, 411 F.3d at 1330. A district court abuses its discretion (1) when it fails to consider a relevant and significant factor; (2) when it gives significant weight to an improper factor; or (3) when it “commits a clear error of judgment” in weighing the proper factors. Id. (quotation omitted). A district court also abuses its discretion when it applies “the wrong legal standard.” Id.

III.

A.

HN3 When district courts decide whether to proceed with declaratory judgment actions that raise issues also disputed in state court proceedings, they are called to [*6]  balance conflicting interests—to foster efficient dispute resolution while still preserving the States’ interests in resolving issues of state law in their own courts. Discerning “the propriety of declaratory relief” requires “a circumspect sense” of the whole affair. Wilton v. Seven Falls Co., 515 U.S. 277, 287, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995) (quotation omitted).

HN4 On one hand, a declaratory judgment action is often quite efficient, eliminating delays and uncertainty. It may enable, for example, a prospective defendant to ask the court to declare its “rights and other legal relations,” including whether it is liable to a prospective plaintiff for prior or planned future acts. 28 U.S.C. § 2201(a). Without the chance to seek a declaratory judgment, a prospective defendant would often be stuck, waiting out statutes of limitations while watching for lawsuits. See 10B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2751 (4th ed. 2021). That waiting game can impose serious costs, whether financial or personal.

HN5 Declaratory actions are especially helpful for third parties—insurance companies in particular. See, e.g., Travelers Prop. Cas. Co. of Am. v. Moore, 763 F.3d 1265, 1267 (11th Cir. 2014); Ameritas, 411 F.3d at 1329-30; Admiral Ins. Co. v. Feit Mgmt. Co., 321 F.3d 1326, 1327 (11th Cir. 2003). That is because a tort suit against an insured often generates distinct issues beyond whether the insured is liable for the tort, say, whether [*7]  the insurer has a duty to defend, or whether the insured’s policy covers the liability alleged in the complaint. See Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S. Ct. 510, 85 L. Ed. 826 (1941); Advanced Sys., Inc. v. Gotham Ins. Co., 272 So. 3d 523, 527 (Fla. Dist. Ct. App. 2019) (an insurer’s duty to defend “is not determined by the insured’s actual liability”). When the policy does not cover the liability even if all the facts alleged in the complaint are true, declaratory relief enables the insurance company to avoid the tort suit completely. Cf. National Trust Ins. Co. v. S. Heating & Cooling, Inc., 12 F.4th 1278, 1290 (11th Cir. 2021). And even when the policy does apply, a declaratory suit allows the insurance company to resolve its liability without waiting for every individual injured party to sue the insured. Declaratory judgments thus play a valuable role in this context, clarifying insurance companies’ liability quickly and directly.

On the other side of the scale are federalism and comity concerns animated by our system of dual sovereignty. Competing state and federal actions are common. See, e.g., Wilton, 515 U.S. at 280; Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 492-94, 62 S. Ct. 1173, 86 L. Ed. 1620 (1942); Ameritas, 411 F.3d at 1329-30. HN6 After all, while the Declaratory Judgment Act enables a prospective defendant to sue in federal court, it does not prevent the party sued from initiating a concurrent state court proceeding. See 28 U.S.C. § 2201. Nor does anything in the Act prevent a state court defendant from bringing a federal declaratory judgment suit.

What’s more, when the issues and parties [*8]  match, each plaintiff competes to be first to the finish, because whichever case is decided earliest will have preclusive effect on common questions in the other. See Empire Fire & Marine Ins. Co. v. J. Transp., Inc., 880 F.2d 1291, 1296 (11th Cir. 1989) (holding that declaratory judgments trigger collateral estoppel).

HN7 Of central concern in this federalism analysis are cases competing to resolve state law issues that “are not foreclosed under the applicable substantive law.” Brillhart, 316 U.S. at 495. When a federal court decides an unresolved question of state law, issue preclusion prevents the creation of state court precedent on that issue in the companion case. See, e.g., Mobil Oil Corp. v. Shevin, 354 So. 2d 372, 374 (Fla. 1977). That, in turn, delays the final resolution of the question as applied to future suits because state supreme courts are the ultimate authority on questions of state law. See Pincus v. Am. Traffic Sols., Inc., 986 F.3d 1305, 1310-11 (11th Cir. 2021). So declaratory judgments have the potential to leave important questions of state law unanswered by state authorities and impede a State’s general authority to dispose of state law issues.

These concerns and others need to be balanced with the obvious benefits of declaratory judgments. HN8 The Declaratory Judgment Act thus is not a license to supplant state court litigation in every case. If it were, the byproducts—waste, delay, and needless competition—would mean the Act sometimes [*9]  did more harm than good. As the Supreme Court cautioned in Brillhart, “[g]ratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided.” 316 U.S. at 495. Nor can the benefits of a declaratory judgment suit be ignored—it is “a remedial arrow in the district court’s quiver,” fashioned by Congress to provide “a new form of relief” when the need arises. See Wilton, 515 U.S. at 288.

That is where the Act’s unusual jurisdictional provision comes in. HN9 It vests district courts with discretion to dismiss declaratory suits when, in their best judgment, the costs outweigh the benefits. Its language is spare, but direct: federal courts “may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201(a) (emphasis added). The Act thus makes an explicit “textual commitment to discretion.” Wilton, 515 U.S. at 286. So while federal courts normally have an “unflagging obligation” to exercise our jurisdiction, where declaratory judgments are concerned this imperative “yields to considerations of practicality and wise judicial administration.” Id. at 284, 288 (quotation omitted).

Over time, precedents have developed to aid district courts in balancing the interests at stake. HN10 In Ameritas, this Court provided [*10]  non-exclusive “guideposts” for district courts to consider when deciding whether to dismiss a federal declaratory judgment action that overlaps with a state case. 411 F.3d at 1331. These factors are intentionally broad, but still offer substantive guidance:

(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 [*11]  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.

HN11 As a whole these guideposts account for the federalism and comity concerns generated by competing cases, as well as the comparative utility of the declaratory judgment action. To be sure, courts are not restricted to this set of factors—the list is not “absolute,” and no single factor is controlling. Id. Indeed, we have characterized the inquiry as a “totality-of-the-circumstances analysis.” National Trust, 12 F.4th at 1285. So whatever the district court decides to do, it must capture the breadth of the competing interests; without a complete understanding of those interests, it cannot properly balance them.

The question here is whether the court below appropriately followed this process. James River argues that the district court not only weighed the Ameritas guideposts incorrectly, but that because the state and federal cases were not truly parallel it never should have applied the guideposts in the first place.

We agree that the district court erred, but not for those [*12]  reasons. For one, the district court was wrong to assess whether the federal and state cases were “parallel” as a prerequisite to considering the Ameritas guideposts. To be fair, that was less clear before our recent decision in National Trust. But the court did err in its application of the Ameritas factors too. It should not have focused on one of the federal claims almost to the exclusion of the other—in doing so it failed to properly consider the totality of the circumstances.

B.

HN12 To begin, “the existence of a parallel proceeding is not a prerequisite to a district court’s refusal to entertain an action under § 2201(a),” the Declaratory Judgment Act. National Trust, 12 F.4th at 1284. Courts possess “unique and substantial discretion” under the Act. Wilton, 515 U.S. at 286 (contrasting this discretion with Colorado River abstention). And neither our precedents nor the Act itself give specific guidance on what constitutes a “parallel” case—whether the parties must be identical, for example, or whether the claims must overlap completely. That uncertain inquiry finds no home in the analysis.

HN13 Consequently, and unlike some abstention doctrines that are more prudential in nature, a parallel proceeding is not a mandatory prerequisite to applying the Ameritas guideposts.¹ On this point we have been explicit, albeit [*13]  after the district court’s decision here: the guideposts themselves offer sufficient consideration of the challenges relating to concurrent proceedings. National Trust, 12 F.4th at 1286. One area of consideration under Ameritas, for example, is whether the federal action would resolve the parties’ dispute; that requires discerning whether the same issues and same parties are present in both cases. Another is whether declaratory relief would create friction between the federal and the state courts; unless the cases implicate the same facts or legal questions, friction is unlikely. Because the guideposts themselves account for the interests presented by competing state and federal lawsuits, we refuse to impose a duplicative inquiry.

The district court thus erred when it forced James River to clear this extra hurdle. It should not have grafted “a discrete, parallel-proceeding factor” from abstention doctrine onto the Ameritas test. Id. at 1285. HN14 While a concurrent state proceeding is still significant under Ameritas, it is not dispositive—in either direction. Id.

C.

Once the district court moved on from its parallelism analysis, it made another serious misstep: it focused on one of the federal claims almost to the exclusion of the other. HN15 Every claim matters, [*14]  because Ameritas requires a “totality-of-the-circumstances analysis.” National Trust, 12 F.4th at 1285. And a comprehensive analysis is impossible when a court only considers half of the federal claims. Regardless of the guideposts it applies, a district court must assess the claims raised in a federal declaratory judgment action evenhandedly.

That means a court cannot cherry pick for its Ameritas analysis the claims that favor dismissing—or proceeding with—a federal action. If the court only considers issues raised in both the state and federal cases, it will always underestimate the need to resolve the issues unique to the declaratory action. And if it only assesses the unique federal claims, the opposite result will follow; the court will underestimate the federalism concerns raised by the overlapping issues. Both approaches are unreasonable. Instead, to appropriately assess “the degree of similarity between concurrent state and federal proceedings,” a district court needs to look at the cases as a whole. See id. at 1282.

Here, the district court addressed each Ameritas guidepost as it analyzed the employee exclusions claim. It noted the “close nexus” between that claim and “Florida public policy” and relied on the state court’s better position to [*15]  resolve the overlapping factual issues “given its familiarity with” the state tort suit. The policy limits claim, however, largely received the silent treatment. The court mentioned that both counts of the federal lawsuit concerned “issues of state law,” but said nothing further about the policy limits issue. That lopsided analysis was unreasonable.

For example, when discussing the fifth guidepost (potential friction between federal and state courts and improper encroachment on state jurisdiction), the district court only said that “[o]verlapping judicial effort is virtually certain to occur.” But that is not a complete analysis, at least for this lawsuit. Although the claim involving Florida’s worker’s compensation statute overlaps with the claims in the state case, the policy limits claim can only be resolved in the declaratory judgment action. See Fla. Stat. § 627.4136. That’s because the state suit is between Hilbert’s estate and the nightclub—meaning no insurance policy is directly at issue and James River cannot be added to the case. Id. Deciding whether James River has paid in full or still owes the nightclub for future liabilities thus creates no conflict with the state liability case.

Nor was that [*16]  the only omission. When the court considered the third guidepost (whether the declaratory action would clarify the legal relations at issue), it failed to account for the fact that resolving the policy limits claim could clarify the relationship between James River and the nightclub. And when discussing the fourth and sixth guideposts (whether the declaratory action was merely “procedural fencing” and whether a better alternative remedy existed), the district court again failed to mention that James River was not party to the state suit and that the policy limits claim could only be resolved through the federal declaratory action.

The district court thus overlooked the significant gains in efficiency the declaratory judgment action would generate. These guideposts as applied to the policy limits claim strongly favor allowing the declaratory judgment action to go forward. If the district court had addressed that claim, as it must on remand, it could have included these efficiency interests in the balance against the federalism and comity interests that it did consider. The failure to do so was a clear error of judgment—and therefore an abuse of discretion.

* * *

HN16 A totality-of-the-circumstances [*17]  analysis only works when a court considers all of the relevant details. To do otherwise leaves weights that should be balanced off the scales, or, if used more nefariously, would tip them in favor of a result chosen in advance. We do not suggest that any such artifice happened here. But we do think that the district court, by failing to consider the policy limits claim, missed the efficiency gains that it needed to balance against federalism and comity interests before deciding whether to proceed with the declaratory judgment action. We therefore VACATE the judgment and REMAND the case for further proceedings consistent with this opinion.

Concur by: BRASHER

Concur

Brasher, Circuit Judge, Concurring:

I concur in full in the Court’s opinion. As I said in my concurring opinion in National Trust Ins. Co. v. S. Heating & Cooling, Inc., 12 F.4th 1278 (11th Cir. 2021), insurers reasonably expect the federal courts to resolve run-of-the-mill disputes about their duties to defend and indemnify against claims made in an underlying tort action. In fact, allowing “a declaratory action by an insurer to establish nonliability under casualty insurance was one of the prime purposes of the Declaratory Judgment Act.” W. Cas. & Sur. Co. v. Teel, 391 F.2d 764, 766 (10th Cir. 1968).

In deciding whether to decline jurisdiction in a case like this one, I don’t think district courts should fixate [*18]  on whether a related action is pending because one almost always is. Whenever a liability insurer sues its insured for a declaration of its duties to defend and indemnify (or vice versa), there will be a pending or threatened related lawsuit—often in state court—between the insured and a third party. After all, if a third party had not sued or threatened to sue the insured, then the liability insurer would not be asking for a declaratory judgment about its duties to defend and indemnify against that claim. Accordingly, the mere pendency or threat of such a related action is no justification for a district court to decline to adjudicate a federal lawsuit between an insurer and its insured.

In weighing the Ameritas factors in a dispute between a liability insurer and its insured, see Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1331 (11th Cir. 2005), I suggest district courts focus on whether there is anything unique or extraordinary that differentiates their case from the mine run of liability insurance disputes. For example, one could ask: Does the State have a stronger interest in deciding this particular state-law issue in state court than it normally would in a state-law liability insurance dispute? Is there a state-specific public policy at play that [*19]  is not present in most other insurance disputes? Is there some important factual dispute in the state litigation that would be unusually dispositive in the declaratory judgment action? We answered these questions in the affirmative in National Trust, where coverage first turned on an open question of state law that had split state courts (whether carbon monoxide was a “pollutant” under the policy’s pollution exclusion) and then on a difficult fact question that was being litigated in the underlying tort action (whether the fire that harmed the third parties was burning outside of its intended location, potentially triggering a “hostile fire” exception to the pollution exclusion).

But, as the Court’s opinion suggests, there is nothing special about this case that warrants declining jurisdiction. Far from it. The district court can resolve this dispute by interpreting the terms of the insurance contract—specifically, the policy’s bodily injury limits, a worker’s compensation exclusion, and an employer liability exclusion, which are all common features of commercial insurance policies. Federal courts routinely answer questions like these. See, e.g., Endurance Am. Specialty Ins. Co. v. United Constr. Eng’g, Inc., 343 F. Supp. 3d 1274, 1280, 1287-88 (S.D. Fla. 2018), aff’d, 786 F. App’x 195 (11th Cir. 2019) (employer’s liability exclusion and worker’s [*20]  compensation exclusion); Scottsdale Ins. Co. v. GFM Operations, Inc., 789 F. Supp. 2d 1278, 1287-88 (S.D. Fla. 2011) (same). If the Ameritas factors weighed against exercising jurisdiction here, then they would justify that result in almost any liability-insurance-related declaratory judgment action. Accordingly, it was an abuse of discretion for the district court to decline to exercise jurisdiction.

End of Document

¹ Colorado River abstention, for example, first requires asking whether the cases involve “substantially the same parties and substantially the same issues.” Gold-Fogel v. Fogel, 16 F.4th 790, 800 (11th Cir. 2021) (quotation omitted). Only then may a court consider several factors to decide whether the circumstances are “exceptional” enough to justify dimissing the “federal suit due to the presence of a concurrent state proceeding for reasons of wise judicial administration.” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 818, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976).