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Allstate Ins. Co. v. Das

United States District Court, E.D. Michigan, Southern Division

January 16, 2015

TRACEY DAS, DENISH DAS d/b/a DAS Transportation, JOHN PRISK, and CHAD ECCLESTON, Defendants

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[Copyrighted Material Omitted]

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For Allstate Insurance Company, Plaintiff: Donald C. Brownell, Vandeveer Garzia, Troy, MI.

For Chad Eccleston, Defendant: Steven J. Matz, Matz & Rubin, Farmington Hills, MI.

Honorable LAURIE J. MICHELSON, UNITED STATES DISTRICT JUDGE. Magistrate Judge Mona K. Majzoub.

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Plaintiff Allstate Insurance Company seeks a declaration that it owes no coverage for liability arising from an automobile accident between Defendants Chad Eccleston and John Prisk while Prisk was employed by Allstate's insureds, Defendants Tracey and Denish Das. Now before the Court are Allstate's Motion for Summary Judgment (Dkt. 36) and Motion for Default Judgment (Dkt. 38). Prisk and Tracey and Denish Das have not appeared or answered, and the clerk has entered defaults against them. ( See Dkt. 11, 12, 39.) Eccleston has answered the Complaint ( see Dkt. 8) but has not responded to the Motion for Summary Judgment. Eccleston did file a response to the Court's order for supplemental briefing on whether the Court's discretionary exercise of jurisdiction under the Declaratory Judgment Act is appropriate in this case. ( See Dkt. 41.) Allstate also filed a supplemental brief. ( See Dkt. 42.) The Court has reviewed all of the briefs and finds that oral argument will not aid in resolving the pending unopposed motions. See E.D. Mich. LR 7.1(f)(2). The Court will exercise its discretionary jurisdiction under the Declaratory Judgment Act to find that default judgment is appropriate against Defendants Prisk and Tracey and Denish Das, and summary judgment is warranted against Defendant Eccleston.


Allstate issued an automobile insurance policy to married couple Tracey and Denish Das that was in effect on March 18, 2010. ( See Mot. for Summ. J. Ex. A, Policy.) The policy covered their 2002 Pontiac Sunfire and 2003 Cadillac Deville as well as a newly purchased automobile for the first 30 days after purchase; a substitute automobile being temporarily used while the insured automobiles are serviced or repaired; and " [a] non-owned private passenger or utility auto used by [the insureds] or a resident relative with the owner's permission," so long as it is not " available for the regular use of an insured person." ( Id. at Pg ID 262, 289.) The policy excluded " damages an insured person is legally obligated to pay because of [b]odily injury or property damage arising out of the use of your insured auto while used to carry persons or property for a charge, or any auto you are driving while available for hire by the public." ( Id. at Pg ID 290.)

On March 18, 2010, Defendant Eccleston was driving a vehicle that was struck by a 2008 Ford cutaway van operated by Defendant Prisk. (Mot. for Summ. J. Ex. D, Police Report.) Prisk's van was " improperly traveling in the center lane" at " a high rate of speed." ( Id.) Prisk was cited for improper lane use and Eccleston was cited for failure to yield the right of way. ( Id.) Prisk had one passenger in the van. ( Id.)

Allstate alleges in its Complaint that Denish Das, acting through his company Das Transportation, rented the Ford cutaway van from Royal Oak Ford. (Dkt. 1, Compl. ¶ 16.) Eccleston's Answer " neither admits nor denies [this] allegation and leaves Plaintiff to its proofs for the reason

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that it lacks sufficient information or knowledge to form a belief as to its truth." (Dkt. 19, Eccleston Ans. ¶ 16.)

Allstate further alleges that Denish Das hired Prisk to operate the van on the day in question " for purposes of transporting around 14 customers of DAS Transportation to a concert at the Palace of Auburn Hills." (Compl. ¶ 19.) And Allstate alleges that at the time of the accident, Prisk was operating the van " in the scope and course of his agreement with DAS Transportation." ( Id. ¶ 20.) Eccleston admits both of these allegations. (Eccleston Ans. ¶ ¶ 19, 20.) Denish Das's rental agreement with Royal Oak Ford is attached to the Complaint. ( See Compl. Ex. B.) It names Prisk as an authorized additional driver. ( See id.) It does not mention Das Transportation. ( See id.)

Eccleston filed claims in Oakland County Circuit Court against Prisk, Royal Oak Ford (the owner of the van), and Denish Das for injuries he sustained in the accident. ( See Mot. for Summ. J. Ex. B.) Eccleston alleged that Prisk " was operating the above 2008 Ford van in the course and/or furtherance of his employment with Defendant, Denish Kumar Das d/b/a DAS Transportation." ( Id. at ¶ 8.) Summary disposition was granted in favor of the defendants on January 21, 2014. See Eccleston v. Prisk et al., No. 13-132677-NI (Oakland Cty. Cir. Ct. Jan. 21, 2014). Eccleston filed an appeal, which is fully briefed but has not been heard. See Eccleston v. Prisk et al., No. 320173 (Mich. Ct.App.).

While Eccleston's case remained pending in state court, Allstate brought this separate federal court action under the Declaratory Judgment Act, 28 U.S.C. § 2201, for a declaration that it owes no coverage for any liability relating to the automobile accident.


Before turning to Allstate's motions, the Court must address the threshold question of subject matter jurisdiction. The Declaratory Judgment Act, 28 U.S.C. § 2201, permits a court to exercise jurisdiction over a request for declaratory judgment relief. Because the Declaratory Judgment Act only " provides courts with discretion to fashion a remedy in cases where federal jurisdiction already exists," the Court must also have an independent basis for subject matter jurisdiction. See One Beacon Ins. Co. v. Chiusolo, 295 F.App'x 771, 775 (6th Cir. 2008). Based on the allegations of the complaint, the Court finds that it has jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332. ( See Compl. ¶ ¶ 1-9.) But jurisdiction under the Act is not mandatory. Bituminous Cas. Corp. v. J & L Lumber Co., 373 F.3d 807, 812 (6th Cir. 2004). The Supreme Court has emphasized that the Act " confers a discretion on the courts rather than an absolute right upon the litigant," and " there is nothing automatic or obligatory about the assumption of jurisdiction by a federal court to hear a declaratory judgment action." Wilton v. Seven Falls Co., 515 U.S. 277, 287, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) (internal quotation marks and citations omitted). The Sixth Circuit has indicated that the district court is required to address whether the exercise of jurisdiction is appropriate in each case: " The essential question is always whether a district court has taken a good look at the issue and engaged in a reasoned analysis of whether issuing a declaration would be useful and fair." W. World Ins. Co. v. Hoey, No. 13-2388, 773 F.3d 755, 2014 WL 6865300, at *2 (6th Cir. Dec. 8, 2014). With respect to indemnification issues such as that raised by Allstate here, the Sixth Circuit has repeatedly cautioned that they " are seldom helpful in resolving an ongoing action in another

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court" and " should normally be filed, if at all, in the court that has jurisdiction over the litigation which gives rise to the indemnity problem. Otherwise confusing problems of scheduling, orderly presentation of fact issues and res judicata are created." Bitumin ...

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