DECEMBER 2014 BAD FAITH CASES: COURT WOULD NOT ABSTAIN FROM HEARING BAD FAITH CASE FOR DAMAGES MIXED WITH DECLARATORY JUDGMENT ACTION WHERE NO PARALLEL STATE COURT CASE PENDING (Western District)
In Tube City IMS Corp. v. Allianz Global Risks US Insurance Company, the insurer removed a case based on breach of contract and bad faith, or in the alternative, a claim that the insurer had to provide coverage based upon its misrepresentations about the scope of coverage. The insured sought remand on the basis of abstention.
Looking at the law governing abstention in the case of declaratory judgment actions, where there are also money damages claims, the court found no basis for abstention in such cases possible where there was no second parallel state court proceeding pending. The same logic prevented the application of Colorado River absention.
Dated of Decision: November 3, 2014, adopted, November 25, 2014