MEMORANDUM OPINION AND ORDER

VIRGINIA EMERSON HOPKINS, District Judge.

I. INTRODUCTION

This is a civil action filed by the plaintiff, Penn-Star Insurance Company ("Penn-Star") against the defendants, Eric Steven Swords, Billy Denson d/b/a Denson House & Mobile Home ("Denson"), and Chris Hayes. Penn-Star seeks a declaration of its rights under a commercial insurance policy issued to Denson. Specifically, Penn-Star seeks an order from this Court holding that it has no duty to defend or indemnify Denson and Hayes in a currently pending state court lawsuit filed against Denson and Hayes in the Circuit Court of Marshall County, Alabama. (See doc. 1 at 8-11)1; (Doc. 1 at 2).2

This case is before the Court on Denson's and Hayes's (the "Movants") Motion To Dismiss for "failure to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). The Movants' argument is two-fold. (See generally doc. 1). First, the Movants argue that "[t]he Declaratory Judgment should be dismissed and/or stayed because the relief sought requires determination of parallel factual and legal issues pending adjudication in an ongoing State Court action." (Doc. 9 at 2) (emphasis omitted). Second, the Movants argue that "[t]he Plaintiff's Duty to Indemnify under its policy of insurance is not ripe for adjudication and therefore the Court lacks subject-matter jurisdiction." (Doc. 9 at 6) (emphasis omitted). In the alternative, the Movants ask the Court to stay the proceedings. (Doc. 9 at 7). Penn-Star opposes the Motion To Dismiss the duty to defend claim but is unopposed to staying the issue of the duty to indemnify. (Doc. 12 at 2-7).

For the reasons stated herein, the motion will be GRANTED in part and DENIED in part.

II. STANDARD

Rule 12(b)(6) motions argue that a complaint has "fail[ed] to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). A complaint has to state "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 8(a)(2).

The Supreme Court gave more clarity on these standards in the Twombly and Iqbal cases. In Iqbal, the court stated that:

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting another source).

The Supreme Court went on to explain how courts should evaluate complaints. "While legal conclusions can provide the complaint's framework, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679.

Additionally, the Court must take "the allegations in the complaint as true and constru[e] them in the light most favorable to the nonmoving party." Kizzire v. Baptist Health System, Inc., 441 F.3d 1305, 1308 (11th Cir. 2006).

A motion to dismiss the complaint based on ripeness implicates Federal Rule of Civil Procedure 12(b)(1). See Little v. Strange, 796 F.Supp.2d 1314, 1318 (M.D. Ala. 2011). The standard for 12(b)(1) motions is as follows:

Id. at 1318-19 (internal citations omitted). Finally, Federal Rule of Civil Procedure 12(h)(3) states that "[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." FED. R. CIV. P. 12(h)(3).

III. RELEVANT BACKGROUND

"Penn-Starr [sic] issued a policy of commercial general liability insurance to named insureds Billy Denson and Denson House & Mobile Home Movers bearing policy number PAC7072344, with an effective period from 9/4/2014 through 9/4/2015, subject to an each occurrence limit of $1,000,000." (Doc. 1 at 4). The underlying state court action originates from a workplace accident occurring on January 28, 2015. (Doc. 1 at 3). The Complaint states:

(Doc. 1 at 3-4). Swords sued Denson and Hayes on February 19, 2016. (Doc. 1-1 at 2).

(Doc. 1 at 4). "The claim was tendered to Penn-Star for the defense of the insured(s) and/or employees and indemnity entered for any judgment entered against it." (Doc. 1 at 4).

In the present declaratory action, Penn-Star cites to numerous provisions in the commercial general liability insurance policy. (Doc. 1 at 5-8).3 Among other provisions, Penn-Star cited to the "employee injury exclusion(s)" and the "auto liability exclusion." (See doc. 1 at 5-8). The Court draws the conclusion that Penn-Star cites these lengthy provisions to argue that either, or both, of the provisions exempts them from the duty to defend, or indemnify, Denson and Hayes.

IV. ANALYSIS

The Declaratory Judgment Act is codified in 28 U.S.C. §2201(a).4 The Act "gives federal courts competence to make a declaration of rights; it does not impose a duty to do so." Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1330 (11th Cir. 2005) (citing Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494 (1942)). The Act does not give "`an absolute right upon the litigant.'" See id. (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 289-90 (1995)).

A. Whether this Court should hear the case because of the state court proceeding The Movants argue that "the relief sought requires determination of parallel factual and legal issues pending adjudication in an ongoing State Court action." (Doc. 9 at 2) (emphasis omitted). The Movants go on to argue that "the relief sought . . . is incapable of being decided before these factual/legal issues are adjudicated" and that proceeding with the case would "cause unnecessary litigation, duplicative discovery, the potential for inconsistent results and a burden on the Federal Judicial Economy." (Doc. 9 at 4-5). In response, Penn-Star argues that "[t]he duty to defend is ripe for adjudication, the resolution of which will not require discovery or factual determinations in the underlying action." (Doc. 12 at 5).

i. The Court does not need to wait on the state court proceeding to adjudicate this ripe claim of a duty to defend.

First, the Court examines whether the Court is compelled to await the result of the state court proceeding.

Under Alabama law, "[a]n insurance company's duty to defend its insured from suit is determined by the language of the insurance policy and by the allegations in the complaint filed against the insured." St. Paul Fire & Marine Ins. Co. v. Town of Gurley, Ala., 2012 WL 3637690 at *4 (N.D. Ala. Aug. 22, 2012) (quoting another source). Disputes over "whether an insurer has a duty to defend a suit against its insured is generally considered a controversy ripe for declaratory relief." Id. Often, a court is able to resolve this issue "based upon the pleading prior to resolution of the underlying lawsuit." Id. This is different from the duty to indemnify:

Id. at *3 (quoting 16 Couch on Insurance 3d § 227:21) (emphasis added by the St. Paul court). Given this black letter law, the Court can adjudicate the duty to defend claim without needing to wait on the state court.

ii. This is not a case of parallel litigation.

Second, the Court looks to see if this is a case of parallel litigation, and if it is, whether the Court ought to abstain.

Parallel litigation is "where `substantially the same parties are contemporaneously litigating substantially the same issues in more than one forum.'" James River Insurance Co. v. Ultratec Special Effects, Inc., 2017 WL 2652985 at *1 (N.D. Ala. June 20, 2017). Ameritas discussed the issue of parallel state and federal proceedings and gives factors for courts to evaluate if there is indeed parallel litigation. See Ameritas Variable Life Ins. Co., 411 F.3d at 13295, 6; see also Auto-Owners Insurance Co. v. Walker, 2012 WL 3628783 at *1-4 (N.D. Ala. Aug. 17, 2012) (discussing the Ameritas case under factually analogous circumstances). It is important to note that even if there is parallel litigation, a federal court can still choose to retain the case. Cf. Ameritas Variable Life Ins. Co., 411 F.3d at 1331-32. This balancing of interests does not always compel the federal court to abstain in favor of the state proceeding. Cf. id.

There is some dispute among the district courts of this circuit over whether the Ameritas factors should be analyzed regardless of whether there is parallel litigation. Cf. Philadelphia Indem. Ins. Co. v. AGCO Corp., 2011 WL 2652139, *3 n.1 (N.D. Ga. July 6, 2011).7 This Court takes Ameritas at its plain meaning when it says, "whether to abstain from exercising jurisdiction over state-law claims in the face of parallel litigation in the state courts." Ameritas Variable Life Ins. Co., 411 F.3d at 1331 (quoting another source) (emphasis added). Logically, if there is no parallel litigation, there are no competing interests for the federal court to balance (and hence no need to review the factors). This Court adheres to a two-step approach of first determining if there is parallel litigation, then applying the Ameritas factors if there is parallel litigation.8

In this case, the federal action and the state action are not parallel proceedings. Neither the parties, nor the issues, are the same. See (Doc. 12 at 2); see also (Doc. 1 at 3-4). The Court addresses in turn each prong of what constitutes parallel litigation.

First, the Court addresses if the parties are the same. Quite plainly, "Penn-Star is not a party to the underlying action." (Doc. 12 at 2); see also (Doc. 9 at 5) ("Although all of the same parties are not involved in the two parallel cases.").9 For that reason, the parties in the two proceedings are not the same.

Second, the Court looks to see if the issues are the same. The state proceeding involves "claims for: Workers Compensation; employer's liability pursuant to Ala. Code §25-6-1 (1975); negligence; wantonness; and willful conduct pursuant to Ala. Code §25-5-11(1975)." (Doc. 1 at 4). The federal proceeding involves an issue regarding "whether Penn-Star owes a duty to defend or indemnify its insured(s) or are not the same.10

The Court's outcome is nothing unusual. Other federal courts have denied motions to dismiss declaratory judgment complaints based on the duty to defend. See James River Ins. Co. v. Ultratec Special Effects, Inc., 2017 WL 2652985 (N.D. Ala. June 20, 2017) (denying a motion to dismiss a duty to defend claim on abstention grounds); see also Auto-Owners Ins. Co. v. Walker, 2012 WL 3628783 (N.D. Ala. Aug. 17, 2012) (denying a motion to dismiss a duty to defend claim).

In conclusion, this claim is neither dependent on the state court outcome, nor is it a case of parallel litigation. The Court does not need to analyze the Ameritas factors because this not a case of parallel litigation. The Motion To Dismiss, or Alternative Motion To Stay, the duty to defend claim is hereby DENIED.

B. Whether the duty to idemnify is ripe for adjudication

The Movants also move to dismiss, or stay, by arguing that the duty to indemnify is not ripe for adjudication. (Doc. 9 at 6-7). Penn-Star seems to admit that the duty to indemnify is not ripe at this point in the litigation. (Doc. 12 at 5).11 However, Penn-Star would prefer the Court stay that issue, rather than dismiss it. (Doc. 12 at 5-6).

Under Alabama law, "[w]hether there is a duty to indemnify under the policy will depend on the facts adduced at the trial of the action." Hartford Cas. Ins. Co. v. Merchants & Farmers Bank, 928 So.2d 1006, 1013 (Ala. 2005); c.f. Alabama Gas Corp. v. Travelers Cas. & Sur. Co., 990 F.Supp.2d 1163, 1167 (N.D. Ala. 2013) ("The duty to indemnify does not rise out of the existence of a duty to defend."). Further, "no action for declaratory relief will lie to establish an insurer's liability in a policy clause contest . . . until a judgment has been rendered against the insured since, until such judgment comes into being, the liabilities are contingent and may never materialize." Allstate Ins. Co. v. Employers Liability Assur. Corp., 445 F.2d 1278, 1281 (5th Cir. 1971).12 In Texas v. U.S., the Supreme Court defined ripeness:

A claim is not ripe for adjudication if it rests upon "`contingent future events that may not occur as anticipated, or indeed may not occur at all.'"

Texas v. U.S., 523 U.S. 296, 300 (1998) (quoting another source). The ripeness doctrine relates to the Constitutional requirement of a case and controversy. See Digital Properties, Inc. v. City of Plantation, 121 F.3d 586, 589 (11th Cir. 1997) (citing U.S. CONST. art. III, §2, cl. 1) ("Article III of the United States Constitution limits the jurisdiction of the federal courts to cases and controversies of sufficient concreteness to evidence a ripeness for review."). "Because a suit that lacks ripeness is not justiciable, the absence of ripeness precludes the federal courts from exercising jurisdiction." St. Paul Fire & Marine Ins. Co., 2012 WL 3637690, at *3.

Further, a court considering ripeness should also consider "prudential considerations." See Digital Properties, 121 F.3d at 589. ("The ripeness doctrine protects federal courts from engaging in speculation or wasting their resources through the review of potential or abstract disputes."). "The ripeness inquiry requires a determination of (1) the fitness of the issues for judicial decision, and (2) the hardship to the parties of withholding court consideration." Id. Whether the claim is ripe is particularly important because it "goes to whether the district court had subject matter jurisdiction to hear the case." Id. at 591.

In this case, the underlying state court trial has not yet occurred. This means that the duty to indemnify is not yet ripe because it is unclear if the Movants are liable on the state court claims. The parties also seem to agree that the duty to indemnify is not ripe. See (Doc. 9 at 6); (Doc. 12 at 4-5). For that reason, this Court only has to determine whether to dismiss or stay the unripe claim.

Courts differ on whether to dismiss an unripe claim or stay it.13 There does not appear to be any on-point Eleventh Circuit precedent answering the question of whether a district court may stay an unripe claim, or whether because a court has no jurisdiction over unripe claims it must dismiss the claim without prejudice. The Eleventh Circuit spoke to ripeness in the Digital Properties case. See Digital Properties, 121 F.3d 587-91. However, that case only affirmed the district court's decision to dismiss the case based on lack of ripeness. See id. at 591 ("The determination of ripeness `goes to whether the district court had subject matter jurisdiction to hear the case.' . . . Digital's erroneous presumptions and impatience led it to rush to the courthouse and present an insufficiently concrete claim. Consequently, the district court properly dismissed the action."). The court did not say that the district court would have been wrong if it only stayed the case. See generally id.

In the absence of definitive 11th Circuit precedent, this court looks to persuasive authority. In the past, this Court found the analysis in the King case persuasive. See Allstate Indemnity Company v. Berry, 2015 WL 6869980 at *2 (N.D. Ala. Nov. 9, 2015). In King, the court stated:

Pennsylvania Nat. Mut. Cas. Ins. Co. v. King, 2012 WL 280656 at *5 (S.D. Ala. Jan. 30, 2012) (original footnotes omitted).

However, the Court is now persuaded by the analysis in a recent decision from the Middle District of Alabama. See generally Canal Insurance Co. v. INA Trucking, LLC, 2017 WL 1146984 (M.D. Ala. March 10, 2017). The decision discusses the propriety of staying an unripe claim:

See Canal Insurance Co., 2017 WL 1146984 at *7-8 (internal footnotes omitted). Here, as in Canal, neither party asserts that the indemnity claim is ripe. Accordingly, being persuaded by the reasoning of Canal, the Court GRANTS the Motion as to the issue of Penn-Star's duty to indemnify.

V. CONCLUSION

The Motion To Dismiss the duty to defend claim is DENIED. Further, the duty to indemnify claim is hereby DISMISSED without prejudice.

DONE and ORDERED.