United States District Court, D. Kansas
ATAIN SPECIALTY INSURANCE COMPANY, f/k/a USF INSURANCE COMPANY, Plaintiff,
LESLIE LYLE CAMICK, et al., Defendants.
MEMORANDUM AND ORDER
F. MELGREN UNITED STATES DISTRICT JUDGE
Atain Insurance Company, formerly known as USF Insurance
Company, brings a declaratory judgment action against three
Defendants. These include Leslie Lyle Camick; KaiTraxx LLC,
d/b/a Kom Traxx (hereinafter
“KaiTraxx”); and Evelyn A. Wattley. Camick has filed
four lawsuits against Wattley and/or KaiTraxx. Plaintiff
seeks a judicial determination that its insurance policy does
not afford coverage to Defendants Wattley or KaiTraxx for any
of the claims asserted in the underlying lawsuits against
them. In addition, Plaintiff seeks a judicial determination
that it does not or did not have any duty to defend or
indemnify Wattley or KaiTraxx in the underlying lawsuits.
Wattley and KaiTraxx have filed a Motion to Dismiss (Doc. 17)
asserting that two of the four underlying lawsuits were
already dismissed and terminated. They contend that these
lawsuits do not present an actual case or controversy between
Plaintiff and Defendants Wattley and KaiTraxx. Thus,
Defendants seek to have Plaintiff's Complaint dismissed
in part. Because the Court finds that the two lawsuits that
have ended do not present an actual case or controversy, the
Court grants Defendants' Motion to Dismiss.
Factual and Procedural Background
issued a commercial policy to Defendant KaiTraxx on May 27,
2011. The original effective dates were May 27, 2011 to May
27, 2012. On September 19, 2011, Defendant Wattley cancelled
the policy. The coverage, therefore, ended on that date.
Camick has filed four lawsuits (“the underlying
lawsuits”) against Wattley. In three of those lawsuits,
KaiTraxx was also named as a Defendant. Camick filed his
first, third, and fourth lawsuits in the United States
District Court for the District of Kansas. He filed his
second lawsuit in the United States District Court for the
District of New Jersey. The underlying facts in those lawsuits
are not relevant to the current motion before this Court so
the Court will not set them forth here.
first lawsuit,  filed in 2013, was dismissed because
Camick failed to state a claim. All post-judgment motions
related to that case, including an appeal Camick attempted to
take to the Tenth Circuit Court of Appeals in 2017 (the Tenth
Circuit dismissed because it was untimely), have been
filed his second lawsuit against Wattley and KaiTraxx in
2016. The District Court for the District of New Jersey
issued an order on May 9, 2018, dismissing the case because
it was barred by the statute of limitations. Neither
post-judgment motions nor an appeal were filed in that case.
filed his third and fourth lawsuits against Wattley in 2017.
Both of these cases were dismissed. They are currently on appeal
to the Tenth Circuit Court of Appeals.
March 29, 2018, Plaintiff filed this declaratory action
against Camick, Wattley, and KaiTraxx. Plantiff seeks a
declaratory judgment that its insurance policy issued to
KaiTraxx provides no coverage to Wattley or KaiTraxx for any
of the events and claims asserted in Camick's underlying
lawsuits. In addition, it seeks a declaration that it has no
duty to defend or indemnify Wattley in any of Camick's
lawsuits against her.
Wattley and KaiTraxx have now filed a Motion to Dismiss,
asserting that the first and second lawsuits have been
terminated on the merits and no further action can be taken.
Thus, they argue that there is no case or controversy, with
regard to these two cases, that would give this Court
jurisdiction to hear a claim for declaratory relief.
Accordingly, they seek dismissal.
Declaratory Judgment Act provides that “[i]n a case of
actual controversy within its jurisdiction . . . any court of
the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not
further relief is or could be sought.” “[A]
declaratory judgment plaintiff must present the court with a
suit based on an ‘actual controversy,' a
requirement the Supreme Court has repeatedly equated to the
requirement.” The pertinent question is “whether
the facts alleged, under all the circumstances, show that
there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality
to warrant the issuance of a declaratory
the parties do not disagree that a case or controversy exists
with regard to two of the four underlying lawsuits. Those two
cases are currently on appeal and are still active.
Defendants do ...