The opinion of the court was delivered by: Alexander Williams, Jr. United States District Judge
Pending before the Court is Defendants' Motion to Dismiss. The Court has reviewed the record and deems a hearing necessary. For the following reasons, the Court GRANTS Defendants' Motion to Dismiss.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Great American Company of New York (Plaintiff) brings this action against the following Defendants: (1) Kathryn Day; (2) Julie Allison; and (3) Case Marine Contracting, LLC (Case Marine). In 2005, Case Marine started performing work on Day and Allison's Chesapeake Bay property. Day and Allison believed that Case Marine performed the work improperly and negligently. Eventually, Day and Allison brought separate suits against Case Marine in the Circuit Court for Anne Arundel County. Case Marine failed to appear and, in February 2011, judgments against it were entered in both lawsuits.
In March 2012, Day and Allison sent Plaintiff a letter contending that Plaintiff was obligated to satisfy their judgments against Case Marine pursuant to insurance policies. Plaintiff responded by saying that the policies did not require it to satisfy the judgments.
In August 2012, Plaintiff filed a declaratory judgment action in the District of Maryland before Judge Chasanow. In this action, Plaintiff sought a judgment declaring that the policies do not obligate it to satisfy Day and Allison's judgments against Case Marine. Although summonses were issued in this action, the record reflects that service of process was never completed and that Plaintiff voluntarily dismissed the suit in December 2012.
In late August 2012, Day and Allison filed motions to implead Plaintiff as an indemnitor in the state court lawsuits. These motions were granted in late September/early October 2012. Plaintiff filed motions to dismiss or, alternatively, to quash in the state court actions. These motions were granted in part and denied in part, with the result that service was quashed and summonses reissued. Although Plaintiff has represented that service of process had not been completed at the time it filed its Opposition, public record indicates that service of process was effected in both Day and Allison's actions in mid-April 2013.
On January 23, 2013, Plaintiff filed its Complaint for Declaratory Judgment (Complaint). As with the voluntarily dismissed action before Judge Chasanow, Plaintiff generally seeks a judgment declaring that it is not liable for Day and Allison's state court judgments against Case Marine. Defendants Day and Allison moved to dismiss on February 7, 2013. Doc. No. 7.*fn1 Day and Allison argue that the Court should decline to exercise jurisdiction because of the pendency of the state court actions and the fact that Plaintiff has already been impleaded in them. For these essential reasons, Day and Allison suggest that this action amounts to forum shopping.
"'[A] federal court may properly exercise jurisdiction in a declaratory judgment proceeding when three essentials are met: (1) the complaint alleges an actual controversy between the parties of sufficient immediacy and reality to warrant issuance of a declaratory judgment; (2) the court possesses an independent basis for jurisdiction over the parties (e.g., federal question or diversity jurisdiction); and (3) the court does not abuse its discretion in its exercise of jurisdiction.'" Senior Execs. Ass'n v. United States, Civil Action No. 8:12--cv-- 02297--AW, 2013 WL 1316333, at *21 (D. Md. Mar. 27, 2013) (quoting Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir. 2004) (citations omitted)). To determine whether to proceed with a federal declaratory judgment action when a parallel state court action is pending, the Fourth Circuit has focused on four factors: "(1) whether the state has a strong interest in having the issues decided in its courts; (2) whether the state court could resolve the issues more efficiently than the federal court; (3) whether the presence of overlapping issues of fact or law might create unnecessary entanglement between the state and federal court; and (4) whether the federal action is mere procedural fencing in the sense that the action is merely the product of forum shopping. Great Am. Ins. Co. v. Gross, 468 F.3d 199, 211 (4th Cir. 2006). "This less demanding standard reflects the distinct features of the Declaratory Judgment Act and the greater discretion afforded federal courts in declaratory judgment actions." See AMEX Assur. Co. v. Giordano, Civil Action No. AW--12--cv--2640, 2013 WL 656358, at *9 (D. Md. Feb. 21, 2013) (citation omitted).
1. Whether the state has a strong interest in having the issues decided in its courts This factor does not favor Day and Allison. Both this Court and the state courts at issue are in the state of Maryland. Furthermore, were the action to remain in this Court, Maryland law would presumably apply to the interpretation of the contract. Therefore, the Court proceeds to look at the other factors.
2. Whether the state court could resolve the issues more efficiently than the federal court This factor supports declining to exercise declaratory judgment jurisdiction. Judgment
has already been entered in Day and Allison's favor in state court and Plaintiff has already been impleaded into the same actions. Presumably, the state court judges that entered judgment in Day and Allison's favor against Case Marine have developed some understanding of the case. For instance, Case Marine's actions and/or omissions in the state court cases may inform the interpretation of certain terms of the contract and, hence, whether Plaintiff is liable for indemnification. Furthermore, although this Court has ample experience in contract, tort, and insurance law, it may be the case that the state court judges tend to hear such indemnification disputes with more regularity. Accordingly, factor (2) weighs in favor of Day and Allison.
3. Whether the presence of overlapping issues of fact or law might create unnecessary entanglement between the state and federal court This factor strongly supports declining to exercise jurisdiction. The third factor is implicated where "issues of law and fact sought to be adjudicated in the federal action are already being litigated by the same parties in the related state court action." Great Am., 468 F.3d at 212. Here, the same questions that Plaintiff asks the Court to resolve and pending before state court judges, and the same parties are involved in those suits. Furthermore, the state courts exercised jurisdiction over these issues before this Court. Whereas Day and Allison's motions for impleader were granted in late ...