National Trust Insurance Company v. Southern Heating and Cooling Inc.


USCA11 Case: 20-11292 Date Filed: 09/03/2021 Page: 1 of 26 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ No. 20-11292 ________________________ D.C. Docket No. 5:19-cv-00268-LCB NATIONAL TRUST INSURANCE COMPANY, Plaintiff - Appellant, versus SOUTHERN HEATING AND COOLING INC, STEVEN HOGE, as Personal Representative of the Estate of Billy Carl Hoge, deceased and as Personal Representative of the Estate of Mary Ellen Hammon Hoge, Defendants - Appellees. ________________________ Appeal from the United States District Court for the Northern District of Alabama ________________________ (September 3, 2021) Before JORDAN, BRASHER, and ANDERSON, Circuit Judges. JORDAN, Circuit Judge: USCA11 Case: 20-11292 Date Filed: 09/03/2021 Page: 2 of 26 The Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides in relevant part that in “a case of actual controversy . . . any court of the United States . . . may declare the rights and legal relations of any interested party seeking such declaration.” As the permissive text suggests, a district court has discretion in deciding whether to entertain an action under the Act. See Wilton v. Seven Falls Co., 515 U.S. 277, 282–83 (1995). In this appeal we address the role that parallel proceedings play in the exercise of discretion under § 2201(a). I Carl and Mary Hoge died from carbon monoxide poisoning in January of 2018 at their Alabama home. Their son, Steven Hoge, sued Southern Heating and Cooling, Inc. and others in Alabama state court for wrongful death. He alleged that Southern Heating had failed to properly service the heating and air conditioning (HVAC) unit at the Hoges’ home, resulting in the release of dangerous levels of carbon monoxide. Specifically, Mr. Hoge claimed that, in two service calls weeks before his parents died, Southern Heating did not correct a misalignment of the HVAC unit’s furnace burner. That misalignment purportedly caused the fire that generates heat inside the furnace to ignite outside of the location within the furnace where it is intended to burn. The furnace therefore generated excessive amounts of carbon monoxide that 2 USCA11 Case: 20-11292 Date Filed: 09/03/2021 Page: 3 of 26 accumulated in the home and eventually killed Carl and Mary.1 National Trust Insurance Company, the commercial liability insurer for Southern Heating, then filed suit in federal court against Mr. Hoge and Southern Heating (but not any of the other state-court defendants) under the Declaratory Judgment Act, 28 U.S.C. § 2201(a). National Trust—which is not a party in the Alabama state court action—sought a declaration that it has no duty to defend or indemnify Southern Heating because there is no coverage under its policy. According to National Trust, carbon monoxide is a “pollutant” that comes within a pollution exclusion in the policy issued to Southern Heating. Mr. Hoge moved to dismiss National Trust’s declaratory judgment action, and Southern Heating agreed with his position. They argued that whether carbon monoxide falls within the insurance policy’s definition of “pollutants” is unresolved under Alabama law and is therefore a decision to be left to the Alabama courts. …

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