United States District Court, D. Idaho
W. Molloy, District Judge United States District Court
case presents the question of when a coverage claim by an
excess insurer is ripe for review under the Declaratory
Judgment Act. Ultimately, this action is not yet ripe and is
therefore dismissed without prejudice.
February 23, 2017, Defendant Laura Lautenschlager was riding
as a passenger on Defendant Dean Lautenschlager's 2006
Harley Davidson motorcycle when the motorcycle was involved
in a collision with a Chevrolet minivan. The motorcycle was
insured in Dean's name with Progressive for liability
coverage in the amount of $500, 000.00 and underinsured
motorist coverage in the amount of $500, 000.00. (Doc. 10-2
at ¶¶ 7-12; Doc. 10-4.) Laura was injured in the
accident, (id. at ¶ 3), and sued Dean and the
other driver, (see Doc. 10-2 at ¶¶ 4-12).
She settled with the van driver's insurer for policy
limits of $15, 000, (id. at ¶ 6), but her case
against Dean (i.e., Progressive) is still pending in Arizona,
(Doc. 10-2 at ¶¶ 8, 12).
addition to the Progressive policy, Laura and Dean held
insurance policies with Safeco Insurance Company and the
plaintiff, Grange Insurance Association. The Grange policy
provided underinsured motorist coverage for four vehicles-not
including the motorcycle-in the amount of $500, 000.00.
(See Doc. 14-1.) The Safeco policy provided
underinsured motorist coverage for an additional two
vehicles-also not the motorcycle-with the same amount of
coverage as the Grange policy. (See Doc. 10-5.) On
February 13, 2019, Laura opened a claim with Grange advising
she "may possibly have an underinsured/ uninsured claim
in the future." (Doc. 10-6.) On February 19, 2019, Grange
denied coverage for underinsured motorist benefits on the
basis that the Grange policy excludes injuries based on
"any motor vehicle owned by that 'insured' which
is not insured for this coverage under the policy."
(See Doc. 11-2.) On February 23, 2019, Grange sent
an additional letter denying medical payments coverage based
on a policy exclusion for injuries sustained "while
'occupying' any motorized vehicle having fewer than
four wheels." (Doc. 11-4 at 3.) On March 20, 2019, Laura
responded, insisting that Grange's denial of underinsured
coverage was not consistent with Arizona law. (Doc. 10-8.)
Grange then filed this case. (Doc. 1.)
seeks dismissal of this action under Rule 12(b)(1) of the
Federal Rules of Civil Procedure on the ground that it is not
ripe because Grange has "failed to establish that there
is a substantial, reasonable or practical likelihood that the
dispute will trigger the excess policy." (Doc. 10-1
(internal quotation marks omitted).) Dean joins the motion.
to the Declaratory Judgment Act, "In a case of actual
controversy within its jurisdiction . . . any court of the
United States .. . may declare the rights and other legal
relations of any interested party seeking such declaration .
. . ." 28 U.S.C. § 2201(a). For an "actual
controversy" to exist, a case must be ripe for review
under Article III of the United States Constitution. Am.
States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir.
1994). "A claim is not ripe for judicial resolution
'if it rests upon contingent future events that may not
occur as anticipated, or indeed may not occur at
all.'" Wolfson v. Brammer, 616 F.3d 1045,
1064 (9th Cir. 2010) (quoting Texas v. United
States, 523 U.S. 296, 300 (1998)). Courts therefore
consider both constitutional and prudential issues in
assessing whether a claim is ripe. Portman v. Cty. of
Santa Clara, 995 F.2d 898, 902 (9th Cir. 1993).
"The constitutional component focuses on whether there
is sufficient injury, and thus is closely tied to the
standing requirement; the prudential component, on the other
hand, focuses on whether there is an adequate record upon
which to base effective review." Id. at 902-03
(internal citation omitted). "The party asserting
federal jurisdiction bears the burden of proving the case is
properly in federal court." In re Ford Motor
Co./Citibank (S.D.), N.A., 264 F.3d 952, 957 (9th Cir.
for declaratory judgment in the insurance context frequently
involve contingencies--such as whether the insured will be
found liable in the underlying tort action or the size of the
potential damage award." Seattle Times Co. v.
Nat'l Surety Corp., 2016 WL 3033498, at *3 (W.D.
Wash. May 27, 2016). "Courts nevertheless exercise their
discretion to hear such disputes given the concreteness of
the issues raised and the unequivocal nature of the dispute
between the parties." Id.; see also Associated
Indent. Corp. v. Fair child Indus., Inc., 961 F.2d 32,
35 (2d Cir. 1992) ("[L]itigation over insurance coverage
has become the paradigm for asserting jurisdiction despite
future contingencies that will determine whether a
controversy ever actually becomes real.") (internal
quotation marks omitted). Thus, courts have identified two
competing interests relevant to a ripeness determination in
the insurance context, "namely (1) the Declaratory
Judgment Act's purpose of enabling the early and
comprehensive resolution of disputes and (2) considerations
of judicial economy and restraint." Seattle Times
Co., at *3. "Liability typically attaches under
excess policies only after the primary coverage is
exhausted." Id. at *2 (internal quotation marks
omitted). "Although there is no hard and fast rule,
courts generally find that a claim against an excess insurer
is ripe for adjudication if there is a substantial,
reasonable, and/or practical likelihood that the dispute will
trigger the excess policies." Fed. Deposit Ins. Co.
v. Arch Ins. Co., 2017 WL 5461360, at *3 (W.D. Wash.
Nov. 13, 2017) (collecting cases).
it is undisputed that the primary policy issued by
Progressive has not yet been exhausted. The dispositive
question then is "whether the likelihood that the excess
polic[y] will be triggered is sufficient to confer
jurisdiction with respect to the request for a coverage
declaration." Id. at *4. That standard is not
met here. According to Laura, it is possible that she may not
exhaust the Progressive coverage of $500, 000, (see
Doc. 10-3), and nothing in the present record indicates the
value of Laura's injuries. This is unlike the situation
in both Century Indemnity Company v. Marine Group,
LLC, 848 F.Supp.2d 1229, 1235-37 (D. Or. 2012), and
E.R. Squibb & Sons, Inc. v. Lloyd's &
Cos., 241 F.3d 154, 177-78 (2d Cir. 2001), where the
magnitude of the potential claims was known. While injuries
sustained in a motorcycle accident could easily exceed the
$500, 000 Progressive policy, the complete dearth of
information regarding Laura's injuries make it impossible
to determine whether that is likely here. The fact that Laura
provided Grange with notice of a potential claim is
insufficient, by itself, to satisfy the ripeness standard.
on the foregoing, IT IS ORDERED that the defendants'
motions to dismiss (Docs. 10, 11) are GRANTED. This action is
DISMISSED WITHOUT PREJUDICE. The Clerk is directed to enter
judgment consistent with this Order and close the case file.