United States District Court, D. Kansas
MEMORANDUM AND ORDER
KATHRYN H. VRATIL United States District Judge
matter is before the Court on plaintiff’s Motion
For Further Relief Based On Declaratory Judgment Pursuant To
28 U.S.C. § 2202 (Doc. #258) filed December 2,
2016. Plaintiff seeks litigation-related fees and costs
pursuant to a settlement agreement arising from prior
proceedings in this Court. For reasons stated below, the
Court overrules plaintiff’s motion.
to 2008, BancInsure sold directors and officers liability
policies to Columbian Financial Corporation and Columbian
Bank and Trust Company (“the Bank”). In August of
2008, the Bank was declared insolvent and the Federal Deposit
Insurance Corporation was appointed receiver
(“FDIC-R”). In 2011, FDIC-R filed suit against
defendants, who are directors and officers of the Bank.
Before this occurred, BancInsure filed a declaratory judgment
suit in the District Court of Johnson County, Kansas which
the FDIC-R removed to this Court in February of 2012. In
February of 2013, FDIC-R and defendants settled their dispute
in the 2011 case and executed a written settlement agreement
(“SA”) which resolved their case but allowed
BancInsure to pursue its declaratory judgment action to
determine coverage under its directors and officers liability
policy. The SA stipulated that if the Court found no coverage
under the policy, defendants would pay BancInsure $250,000
plus $679,340, which BancInsure had advanced to defendants
for defense costs. The SA also stipulated that, in any
potential dispute regarding the agreement, the Court retained
personal jurisdiction over the parties.
February of 2014, the Court granted BancInsure’s motion
for summary judgment and found no coverage under the policy.
In April of 2014, BancInsure moved to amend the judgment to
include monetary damages for payment of defense costs. The
Court denied this motion, noting that BancInsure had not
sought damages, had not timely sought summary judgment on any
damages theory and had no right to recover such damages.
Defendants appealed the Court’s decision with respect
to coverage, and the Tenth Circuit Court of Appeals affirmed.
The United States Supreme Court denied certiorari in August
instant action, BancInsure seeks “further necessary
relief” based on the declaratory judgment. BancInsure
claims that defendants are obligated to pay
litigation-related fees and costs pursuant to the settlement
agreement in the underlying action. BancInsure relies on the
Declaratory Judgment Act, 28 U.S.C. § 2202, which
permits courts to order “[f]urther necessary or proper
relief based on a declaratory judgment.” 28 U.S.C.
§ 2202. BancInsure argues that it should be able to
enforce the SA in these proceedings and that it is necessary
for the Court to award relief based on the declaratory
I. Whether further relief on the declaratory judgment
is necessary or proper
BancInsure seeks relief under the Declaratory Judgment Act,
28 U.S.C. § 2202. Under Section 2202, a court may grant
“[f]urther necessary or proper relief based on a
declaratory judgment or decree.” Id.
BancInsure asserts that Section 2202 provides a mechanism by
which it can secure reimbursement of defense costs advanced
under the policy, pursuant to its reservation of rights.
BancInsure claims that the SA establishes its rights to
reimbursement. As defendants correctly point out, however,
what BancInsure actually seeks is enforcement of the SA, a
wholly separate contract. It is not seeking further relief on
the declaratory judgment, but instead seeking to enforce the
SA. BancInsure’s motion then is not actually a claim
for further relief on the declaratory judgment, but a claim
for breach of contract and unjust enrichment under the SA. To
pursue these claims, BancInsure must file a new action.
Whether the Court retained jurisdiction to adjudicate
disputes under the SA
defendants agreed that the District of Kansas would retain
personal jurisdiction over the parties for potential actions
arising from the SA, the Court did not retain jurisdiction to
adjudicate such disputes in this declaratory judgment action.
Personal jurisdiction over defendants is not the
same as the Court retaining jurisdiction over the case.
Because BancInsure has brought new and distinct causes of
action, and because the Court did not retain jurisdiction to
adjudicate them, the Declaratory Judgment Act does not
authorize BancInsure to pursue its claim for further relief
in this action.
IS THEREFORE ORDERED that plaintiff’s
Motion For Further Relief Based On Declaratory Judgment
Pursuant To 28 U.S.C. § 2202 ...