United States District Court, D. Kansas
MEMORANDUM AND ORDER
W. LUNGSTRUM UNITED STATES DISTRICT JUDGE.
matter comes before the Court on defendants' motions to
dismiss (Doc. ## 25, 26). The Court agrees that it should, in
its discretion, decline to exercise jurisdiction in this
declaratory judgment action. Accordingly, the Court
grants the motions, and it dismisses the
CAMICO Mutual Insurance Company (“CAMICO”), a
California insurer, issued a professional liability insurance
policy to J.D. Rosen C.P.A., P.A., an accounting firm. In
December 2016, the insured and its principal, Jeffrey Rosen
(collectively “Rosen”), notified CAMICO that a
claim had been made against them by James Mirabile. Dr.
Mirabile, a physician, had been the subject of a Department
of Labor (DOL) investigation relating to two employee benefit
plans, which resulted in the entry of a consent judgment
against Dr. Mirabile in this Court in December 2016. CAMICO
declined coverage for Dr. Mirabile's claims against
Rosen. On April 4, 2017, CAMICO received a demand from Dr.
Mirabile that included a draft petition for a lawsuit against
Rosen in the Circuit Court for Jackson County, Missouri, and
CAMICO again declined coverage.
April 20, 2017, CAMICO filed the instant action against Rosen
and Dr. Mirabile (individually and as trustee of the two
employee plans). CAMICO seeks a declaratory judgment to the
effect that Dr. Mirabile's claims against Rosen are not
covered under the policy.
CAMICO declined coverage, Dr. Mirabile and Rosen agreed to
binding arbitration of the claims and further entered into a
non-execution agreement under Missouri law to limit the
exposure of Rosen's assets. The arbitration was conducted
on May 12, 2017, in Missouri. On May 26, 2017, the arbitrator
issued his decision, by which he awarded damages to Mr.
Mirabile in the total amount of $4, 852, 825. On June 27,
2017, the Jackson County Circuit Court issued an order and
judgment confirming the award against Rosen.
Mirabile and Rosen filed the instant motions to dismiss on
July 10, 2017. Those motions anticipated the filing by Dr.
Mirabile in the Missouri court a garnishment action against
Rosen and CAMICO under Missouri law, which action would be
filed once the requisite 30 days had passed since the
confirmation of the arbitration award. Rosen also stated that
it intended to assert cross-claims against CAMICO in the
Missouri action. In their reply brief, filed on August 11,
2017, defendants confirmed that the garnishment action
against CAMICO had indeed been filed in the Missouri court.
seeking dismissal, defendants argue that the Court should
exercise its discretion to decline jurisdiction over this
declaratory judgment action in light of the action against
CAMICO in the Missouri state court, in which any issues
concerning coverage under the policy would be addressed. The
federal Declaratory Judgment Act confers on district courts
“‘unique and substantial discretion' in
determining whether to declare the rights of litigants when
duplicative state proceedings exist.” See United
States v. City of Las Cruces, 289 F.3d 1170,
1179-80 (10th Cir. 2002) (quoting Wilton v. Seven Falls
Co., 515 U.S. 277, 286-87 (1995)). In Brillhart v.
Excess Insurance Co. of America, 316 U.S. 491 (1942),
the Supreme Court set forth a few relevant factors as
Where a district court is presented with a claim such as was
made here, it should ascertain whether the questions in
controversy between the parties to the federal suit, and
which are not foreclosed under the applicable substantive
law, can better be settled in the proceeding pending in the
state court. This may entail inquiry into the scope of the
pending state court proceeding and the nature of defenses
open there. The federal court may have to consider whether
the claims of all parties in interest can satisfactorily be
adjudicated in that proceeding, whether necessary parties
have been joined, whether such parties are amenable to
process in that proceeding, etc.
See Id. at 495; accord City of Las Cruces,
289 F.3d at 1186-87 (listing Brillhart factors). The
Tenth Circuit has adopted a list of five factors (the
Mhoon factors) to be evaluated:
 whether a declaratory action would settle the
controversy;  whether it would serve a useful purpose in
clarifying the legal relations at issue;  whether the
declaratory remedy is being used merely for the purpose of
procedural fencing or to provide an arena for a race to
res judicata;  whether use of declaratory action
would increase friction between our federal and state courts
and improperly encroach upon state jurisdiction; and 
whether there is an alternative remedy which is better or
City of Las Cruces, 289 F.3d at 1187 (brackets in
original) (quoting State Farm Fire & Cas.
Co. v. Mhoon, 31 F.3d 979, 983 (10th Cir. 1994)). The
parties agree that the Court should consider the
Brillhart and Mhoon factors in deciding
defendants' motions to dismiss this case.
opposing the motions, CAMICO argues that Brillhart
recommends accepting jurisdiction here because it is not
subject to personal jurisdiction in the Missouri court.
CAMICO argues that it is not subject to specific jurisdiction
in Missouri because it has not had the requisite
“minimum contacts” with that state to satisfy due
process. CAMICO notes that it insured a Kansas
resident (Rosen) who provided services for another Kansas
resident (Dr. Mirabile). CAMICO has failed to address,
however, the facts that its policy imposed on it a duty to
defend and settle covered claims; that that duty applied to
claims made anywhere in the world; that Dr. Mirabile provided
notice that it intended to assert claims against the insured
in a Missouri court; that Dr. Mirabile won an arbitration
award in Missouri; that the arbitration decision indicated
that some of the negligent acts took place in Missouri and
harmed Missouri residents; and that Dr. Mirabile subsequently
obtained a judgment against the insured in a Missouri court.
The federal circuit courts appear to be unanimous in
concluding that the minimum-contacts standard is satisfied
against an insurer with respect to coverage of legal claims
asserted in the forum state in such circumstances. See,
e.g., TH Agriculture & Nutrition, LLC v. Ace
European Group Ltd., 488 F.3d 1282, 1291 (10th Cir.
2007); McGow v. McCurry, 412 F.3d 1207, 1215 (11th
Cir. 2005); Ferrell v. West Bend Mutual Ins. Co.,
393 F.3d 786, 791 (8th Cir. 2005); Payne v.
Motorists' Mutual Ins. Cos., 4 F.3d 452, 455-56 (6th
Cir. 1993); Farmers Ins. Exch. v. Portage La Prairie
Mutual Ins. Co., 907 F.2d 911, 914 (9th Cir. 1990);
Rossman v. State Farm Mutual Auto. Ins. Co., 832
F.2d 282, 286-87 (4th Cir. 1987); Eli Lilly & Co. v.
Home Ins. Co., 794 F.2d 710, ...