First Chicago Insurance Company v. Philip Hempel, Farm Bureau Insurance Company of Michigan, and American Transportation on Time, Inc.

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 05 2012, 8:57 am
court except for the purpose of establishing
the defense of res judicata, collateral CLERK
estoppel, or the law of the case. of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEE:
Philip Hempel
MARK DINOS
Morse Bolduc & Dinos JAMES F. GROVES
Dyer, Indiana DAVID E. BALLARD
Lee, Groves & Zalas
South Bend, Indiana
ATTORNEYS FOR APPELLEE:
Farm Bureau General Insurance Company of
Michigan
ROBERT T. KEEN, JR.
ADRIENNE C. ROMARY
Carson Boxberger LLP
Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
FIRST CHICAGO INSURANCE COMPANY, )
)
Appellant, )
)
vs. ) No. 71A03-1202-PL-64
)
PHILIP HEMPEL, FARM BUREAU INSURANCE )
COMPANY OF MICHIGAN, and AMERICAN )
TRANSPORTATION ON TIME, INC., )
)
Appellees. )
APPEAL FROM THE SAINT JOSEPH SUPERIOR COURT
The Honorable Margot F. Reagan, Judge
Cause No. 71D04-1102-PL-39
December 5, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
FRIEDLANDER, Judge
First Chicago Insurance Company (First Chicago) appeals the dismissal of its
complaint for declaratory judgment against Philip Hempel, Farm Bureau General Insurance
Company of Michigan (Farm Bureau), and American Transportation on Time, Inc.
(American Transportation) (collectively referred to as Appellees), presenting the following
restated issue for review: Did the trial court err in dismissing First Chicago’s declaratory
judgment action on principles of comity?
We affirm.
The underlying facts center upon an October 11, 2010 automobile collision between
Hempel’s car and another vehicle. Hempel and the other driver were Michigan residents. At
the time of the collision, Hempel was driving a taxicab for Yellow Cab of Berrien County,
which was an assumed name of American Transportation.1 Berrien County is located in
Michigan, just across the Indiana-Michigan border from South Bend. American
Transportation is a taxicab company whose business address is on S. Mayflower Road in
South Bend, Indiana. The same South Bend address is listed as the place where American
Transportation garages its vehicles.
1
In its brief, First Chicago refers to Yellow Cab of Berrien County as a subsidiary. Our interpretation of
the relevant portion of the deposition of Kerry Clear, one of American Transportation’s co-owners, leads us to
conclude that Yellow Cab of Berrien County is not a separately created business entity, and thus not a
subsidiary. See Ind. Code Ann. § 23-1-43-16 (West, Westlaw current through 2012 Second Regular Session)
(“‘subsidiary’ of any resident domestic corporation means any other corporation of which a majority of the
outstanding voting shares entitled to be cast are owned (directly or indirectly) by the resident domestic
corporation”) (emphasis supplied). In any event, the corporate status of Yellow Cab of Berrien County has no
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As a result of the accident, Hempel and his wife filed a lawsuit in Michigan (the
Michigan lawsuit) against First Chicago, which was American Transportation’s insurer, and
Farm Bureau, which was Hempel’s personal liability insurer. In their lawsuit, the Hempels
sought personal-injury protection (PIP), no-fault benefits under Michigan law. First Chicago
filed a motion for summary judgment, contending that the Michigan court did not have
personal jurisdiction over First Chicago and that there was another lawsuit pending in an
Indiana court concerning this matter. The latter claim referred to the present declaratory
judgment action (the Indiana lawsuit), which First Chicago filed on February 10, 2011, in St.
Joseph Circuit Court against the Hempels and Farm Bureau. The Michigan court denied First
Chicago’s summary judgment motion, finding among other things that the Indiana lawsuit
was filed after the Hempels filed the Michigan lawsuit. On August 2, 2011, the Hempels
filed a motion to dismiss the Indiana lawsuit based upon comity. Farm Bureau followed with
a motion to dismiss of its own. Following oral argument, the trial court granted the Hemples’
motion to dismiss the Indiana lawsuit on October 21, 2011. This is the order that First
Chicago appeals in the present case.
The court dismissed First Chicago’s Indiana lawsuit based upon the principles of
comity, by which our courts may decline to interfere with proceedings that are pending in
another state. See Quiring v. GEICO Gen. Ins. Co., 953 N.E.2d 119 (Ind. Ct. App. 2011).
The application of these principles does not come about via constitutional mandate or
mandatory rule of law, but instead as the product of a discretionary determination based upon
a “willingness to grant a privilege, not as a matter of right, but out of deference and good
bearing upon the outcome of this case.
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will.” Id. at 128 (quoting American Econ. Ins. Co. v. Felts, 759 N.E.2d 649, 660 (Ind. Ct.
App. 2001)). We review the dismissal of a declaratory judgment action under the principles
of comity for an abuse of discretion. In re Arbitration Between Am. Gen. Fin. Servs., Inc. &
Miller, 820 N.E.2d 722 (Ind. Ct. App. 2005).
Indiana’s declaratory judgment statute provides that trial courts, within their
respective jurisdictions, “have the power to declare rights, status, and other legal relations
whether or not further relief is or could be claimed.” Ind. Code Ann. § 34-14-1-1 (West,
Westlaw current through 2012 Second Regular Session). “Any person interested under a ...
written contract, or other writings constituting a contract ... may have determined any
question of construction or validity arising under the ... contract ... and obtain a declaration of
rights, status, or other legal relations thereunder.” I.C. § 34-14-1-2 (West, Westlaw current
through 2012 Second Regular Session). I.C. § 34-14-1-1’s purpose is “to settle and to afford
relief from uncertainty and insecurity with respect to rights, status and other legal relations,”
and it “is to be liberally construed and administered.” I.C. § 34-14-1-12 (West, Westlaw
current through 2012 Second Regular Session). In applying the statute, a trial court “may
refuse to render or enter a declaratory judgment or decree where the judgment or decree, if
rendered or entered, would not terminate the uncertainty or controversy giving rise to the
proceeding.” I.C. § 34-14-1-6 (West, Westlaw current through 2012 Second Regular
Session). “In determining the propriety of declaratory relief, the test to be applied is whether
the issuance of a declaratory judgment will effectively solve the problem, whether it will
serve a useful purpose, and whether or not another remedy is more effective or efficient.”
Quiring v. GEICO Gen. Ins. Co., 953 N.E.2d at 125-26 (quoting Volkswagenwerk, A.G. v.
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Watson, 390 N.E.2d 1082, 1085 (Ind. Ct. App. 1979)).
A review of the cases cited by each side in support of their respective positions reveals
that the propriety of the application of comity in cases of this type turns upon the unique
aspects of the case. First Chicago cites, among others, In re Arbitration Between Am. Gen.
Fin. Servs., Inc. & Miller, in which an Indiana resident entered into a consumer loan
transaction with American General, which maintained its principal places of business in
Indiana. The transaction occurred in Indiana. The loan contract provided that all covered
claims must be resolved by binding arbitration at the election of the lender or the borrower.
It also provided that arbitration would take place in the county in which the borrower resides,
and that any lawsuit filed to enforce the arbitration provision must be filed in the county
where the loan agreement was signed. The Indiana resident sued American General and its
affiliates for breach of contract in a Mississippi court even though the loan transaction
occurred in Indiana. Pursuant to the terms of the loan agreement, American General filed its
petition to compel arbitration in the Vanderburgh Superior Court. The Indiana resident
submitted a motion to dismiss American General’s petition in Indiana based upon the
principles of comity. The trial court granted the motion to dismiss on the stated grounds.
This court reversed, citing “Indiana’s strong policy favoring the enforcement of arbitration
agreements,” id. at 726, and noting that the issue of arbitration was not pending in the foreign
action.
The Hempels cite Brightpoint, Inc. v. Pedersen, 930 N.E.2d 34 (Ind. Ct. App. 2010),
trans. denied, in support of their contention that the trial court was correct in dismissing First
Chicago’s petition on comity grounds. In Brightpoint, this court set forth the following
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discussion of the law of comity:
Courts in other jurisdictions likewise have concluded that where an
action concerning the same parties and the same subject matter has been
commenced in another jurisdiction capable of granting prompt and complete
justice, comity ordinarily should require staying or dismissal of a subsequent
action filed in a different jurisdiction, in the absence of special circumstances.
Factors this court has considered in addressing comity questions include
whether the first filed suit has been proceeding normally, without delay, and
whether there is a danger the parties may be subjected to multiple or
inconsistent judgments. We also believe it appropriate to look for guidance
from cases interpreting Indiana Trial Rule 12(B)(8), which expressly permits
dismissal of a lawsuit where another action already is pending in another
Indiana state court. Under that rule, a second action “should be dismissed
where the parties, subject matter, and remedies are precisely or even
substantially the same in both suits.” Vannatta v. Chandler, 810 N.E.2d 1108,
1110–11 (Ind. Ct. App. 2004).
Id. at 39-40 (quoting Jallali v. Nat’l Bd. of Osteopathic Med. Exam’rs, Inc., 902 N.E.2d 902(Ind. Ct. App. 2009), vacated on other grounds on reh’g, 908 N.E.2d 1168, trans. denied).
In Brightpoint, we affirmed a dismissal on comity grounds after concluding that the Indiana
litigation and the foreign litigation involved the same parties, substantially identical subject
matter, and substantially similar remedies. The court also noted that the trial court was
justified in concluding that the foreign action was filed first.
We believe that although Brightpoint and Quiring reached different conclusions with
respect to the validity of a dismissal of an Indiana action on comity grounds, they are not in
conflict. The differing conclusions are driven by separate and distinctly different facts. In
short, they are not inconsistent with each other and essentially represent the result of the
application of the same principles in two different scenarios. Our task is to apply those
principles to the unique facts of the present case.
To review the salient facts, the Michigan lawsuit involves a claim for damages
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following a Michigan automobile accident involving Hempel and another Michigan resident.
The parties in the Michigan lawsuit are First Chicago, Hempel, Farm Bureau, and American
Transportation. The issue in that action is whether Hempel is entitled to receive PIP
coverage from First Chicago. The Indiana lawsuit involves the same parties and the same
automobile accident. In filing the action, First Chicago sought a declaration that Hempel was
not entitled to PIP coverage under the First Chicago policy. Therefore, the issues are the
same in both actions. It appears to us that based upon these considerations, the Michigan
court is capable of granting prompt and complete justice. See Brightpoint, Inc. v. Pedersen,
930 N.E.2d 34.
We understand that First Chicago argues that the Michigan court is dispensing justice,
but doing so erroneously. In fact, First Chicago’s argument in this regard can be interpreted
as suggesting that the Michigan court is exercising what is tantamount to a proprietary
interest in this case, preferring one result to the other based upon geographical bias. See
Appellant’s Reply Brief at 8 (“First Chicago … filed a declaratory judgment action in Indiana
[seeking an] interpretation of its Indiana policy, issued to an Indiana insured under Indiana
law”; the dismissal of its Indiana complaint “has led to the absurd result of the Indiana
contract of insurance being interpreted under contrary Michigan law by a Michigan court”).
We agree with the trial court that both Michigan and Indiana courts are equally up to the task
of determining which law applies and of capably applying it. See Blackburn v. Sweeney, 659
N.E.2d 131 (Ind. 1995) (the primary goal behind the doctrine of comity is the promotion of
good will between jurisdictions and uniformity of decisions).
We decline to decide this matter on the premise that only an Indiana court will
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protect the legal interests of Indiana residents embroiled in a lawsuit with a non-Indiana
resident. Our decision is not driven by regional bias, but instead by application of the criteria
set out in Brightpoint and Quiring to the facts of this case. The same is true of the Michigan
court. The parties, subject matter, and remedies are substantially the same in both the
Michigan lawsuit and the present case. The Michigan lawsuit was filed first. Accordingly,
the trial court did not abuse its discretion in granting the Hemples’ motion to dismiss the
present lawsuit.
Judgment affirmed.
BROWN, J., and PYLE, J., concur.
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