United States District Court, D. South Carolina, Beaufort Division
ORDER AND OPINION
Richard M. Gergel United States District Court.
matter is before the Court on Defendant Solomon Victor
Walker's Motion to Reconsider or Amend (Dkt. No. 14). For
the reasons set forth below, the Court grants the Motion.
Lyndon Southern Insurance Company filed this action on
November 8, 2018, seeking a declaration that it has no duty
to defend or indemnify Walker in the Underlying Action or to
satisfy the default judgment. (Dkt. No. 1 at 6.) This action
arises out of a car accident on March 18, 2016, (the
"accident") between Defendant Walker and Oranne
Brunson. On February 15, 2019, the Court denied Defendant
Walker's Motion to Dismiss. (Dkt. No. 13.) Defendant
Walker now moves for reconsideration. (Dkt. No. 14.)
with this Order, the Court issued an order remanding the
related tort case, 9:18-cv-3399-RMG, to state court, finding
that the South Carolina defendants were not fraudulently
joined. In light of that decision, the Court now reconsiders
its prior order on Defendant's Motion to Dismiss.
59(e) of the Federal Rules of Civil Procedure governs motions
to alter or amend a judgment; however, the rule does not
provide a legal standard for such motions. The Fourth Circuit
has articulated "three grounds for amending an earlier
judgment: (1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not
available at trial; or (3) to correct a clear error of law or
prevent manifest injustice." Pac. Ins. Co. v. Am.
Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.
1998) citing EEOC v. Lockheed Martin Corp., 116 F.3d
110, 112 (4th Cir. 1997); Hutchinson v. Staton, 994
F.2d 1076, 1081 (4th Cir. 1993). "Rule 59(e) motions may
not be used, however, to raise arguments which could have
been raised prior to the issuance of the judgment, nor may
they be used to argue a case under a novel legal theory that
the party had the ability to address in the first
instance." Id. at 403 (internal citations
omitted). Rule 59(e) provides an "extraordinary remedy
that should be used sparingly." Id. (internal
citation omitted). The decision to alter or amend a judgment
is reviewed for an abuse of discretion. Id. at 402.
that the Court has remanded Walker's tort action against
Lyndon Southern to state court, the Court finds it is
appropriate to decline to exercise jurisdiction under the
abstention doctrine set forth in Nautilus Ins. Co. v.
Winchester Homes, Inc., 15 F.3d 371 (4th Cir. 1994). In
Nautilus, the Fourth Circuit ruled that a district
court's discretion to decline to hear a declaratory
judgment action should be guided by:
(i) the strength of the state's interest in having the
issues raised in the federal declaratory action decided in
the state courts; (ii) whether the issues raised in the
federal action can more efficiently be resolved in the court
in which the state action is pending; [ ] (iii) whether
permitting the federal action to go forward would result in
unnecessary 'entanglement' between the federal and
state court systems, because of the presence of
'overlapping issues of fact or law, '...[and (iv)]
whether the declaratory judgment action is being used merely
as a device for 'procedural fencing.'
Id. at 377 (citations omitted). All four
Nautilus factors indicate the Court should abstain
in this case. The Court therefore does not reach the
additional "criteria outlined in Quarles, which
focus on the general utility of the declaratory relief
sought." Id. at 376. The Court assumes, without
finding, that the declaratory relief sought would "serve
a useful purpose" for the litigants. See Aetna Cas.
& Sur. Co. v. Quarks, 92 F.2d 321, 325 (4th Cir.
1937). But, nonetheless, considerations of federalism,
efficiency, and comity are sufficiently compelling to justify
refusal to exercise jurisdiction over this case.
South Carolina has a strong interest in having many of the
issues raised in this action decided in state court. Motor
vehicle liability insurance is an area of state regulation,
in which the federal government has little interest. See
Prentiss v. Allstate Ins. Co., 87 F.Supp.2d 514, 524
(W.D. N.C. 1999) (finding that automobile insurance
regulation is "a complex state regulatory scheme"
and that "there is no federal interest in the regulation
of automobile insurance, an area in which Congress has
deferred to the states").
the issues raised in this action can more efficiently be
resolved in state court. The default judgment and now tort
actions are both pending in state court, and it would be more
efficient for the declaratory judgment action, which relies
on the same facts and similar issues of law, to be decided
concurrently with those other two actions.
permitting the case to go forward would create unnecessary
entanglement between the federal and state courts since the
issues of fact in this declaratory judgment action "are
already being litigated by the same parties in ...