United States District Court, S.D. Ohio, Western Division, Dayton
PETER H. HEINS, et al., Plaintiffs,
COMMERCE AND INDUSTRY INSURANC COMPANY, et al., Defendants.
H. Rice, District Judge.
REPORT AND RECOMMENDATIONS 
L. Ovington, United States Magistrate Judge.
facts in this case involve an airplane crash, the total
destruction of the aircraft, the deaths of Clayton Michael
Heins and Jacob Andrew Turner, and an aircraft insurance
policy. Clayton's father, Peter H. Heins, owned the
destroyed aircraft. After the crash, a dispute arose
concerning insurance coverage, leading Peter H. Heins to file
the present case in the Darke County, Ohio Court of Common
Pleas. Defendants Commerce and Industry Insurance Company and
AIG Aerospace Adjustment Services, Inc. removed the case to
this Court asserting diversity jurisdiction under 28 U.S.C.
parties do not dispute that the diversity-jurisdiction
requirements are satisfied and that, consequently, removal of
the case from state court was legally justified. Their
dispute instead presents choice between alternatives: (1)
whether this Court should decline to exercise its
discretionary declaratory-judgment jurisdiction and remand
the case to state court-as Plaintiff asks (Doc. #s 7, 15); or (2)
whether this Court should exercise its discretionary
declaratory-judgment jurisdiction and retain the case here-as
Defendants ask (Doc. #11).
airplane crash leading in the present case also generated a
wrongful-death case filed by the Administrator of Jacob
Turner's Estate in the Darke County Court of Common Pleas
(the Turner case). Peter Heins is the defendant in the Turner
case both individually and as Administrator of his son
Clayton's Estate. (Doc. #7, Exh. A). It appears that the
Turner case remains presently pending in Darke County.
to the instant case, Plaintiff Heins purchased an aircraft
insurance policy from Defendant Commerce and Industry
Insurance. His purchase occurred before the airplane crash
happened. The subject of the insurance policy was the
aircraft destroyed in the crash. The insurance policy was in
effect at the time of the crash. See Doc. #9,
PageID #s 172-73. Plaintiff Heins asserts in his
Complaint that the insurance policy provided coverage for
property damage to the aircraft and other losses. He further
alleges that the policy required Commerce and Industry
Insurance to “‘…defend and settle any suit
or claim covered by this insurance….'” (Doc.
#3, PageID #69, ¶5) (quoting, apparently, the
aircraft insurance policy).
the crash occurred, Plaintiff Heins asked Commerce and
Industry Insurance to “provide Plaintiff (individually)
with a defense to any and all claims which might be asserted
by the next of kin, survivors, or estate of Mr. Jake
Turner….” Id. at ¶7. In September
2016, AIG Aerospace (as Commerce and Industry Insurance's
agent) wrote a letter informing Plaintiff Heins that it
planned to investigate the circumstances surrounding the
crash. Id., PageID at ¶9; see
months later, in January 2017, the Turner case was filed in
the Darke County Court of Common Pleas. The Turner Complaint
alleges that Clayton was the pilot of the aircraft involved
in the crash and that Jacob was the passenger. It further
alleges Clayton “possessed only a student pilot
certificate and was not a licensed, qualified pilot.”
(Doc. #7, Exh. A, PageID #142, ¶14). The Sixth
Cause of Action in the Turner Complaint asserts that Peter H.
Heins negligently and recklessly entrusted Clayton with the
aircraft, or permitted him to access the aircraft,
“which conduct directly and proximately caused the
aircraft to crash … resulting in personal injuries and
death to Jacob Andrew Turner.” Id. at ¶s
potential individual liability in the Turner case, Plaintiff
Heins might have been somewhat relieved when Commerce and
Industry Insurance informed him (on January 24, 2017) that
AIG would “accept defense of the matter and retain
defense counsel to represent … [him] under the terms
of the …” aircraft insurance policy. (Doc. #3,
PageID #70, ¶12). The representation was
limited to the Sixth Cause of Action in the Turner Complaint.
Id. He might have been further relieved when
Commerce and Industry Insurance's counsel soon filed an
Answer on his behalf contesting the allegations in the Turner
Complaint's Sixth Cause of Action. Id. at
relief Plaintiff Heins might have felt was fleeting because
Commerce and Industry Insurance soon changed its mind. It
notified “Plaintiff (individually) that it was
rejecting the claim of physical damage to the aircraft; it
was not providing coverage for the bodily injury and death of
Jacob Turner; and, it was not providing Plaintiff
(individually) with a defense in to the claim against him
made [in the Turner case].” Id. at ¶14.
In response, Plaintiff Heins filed the present case in the
Darke County Court of Common Pleas and, as noted above,
removal to this Court followed.
seeks a permanent injunction requiring Commerce and Industry
Insurance to provide him with a defense to the Sixth Cause of
Action in the Turner case or, alternatively, to reimburse him
for the reasonable costs of attorney fees and expenses
incurred in the Turner case. He further seeks to recover the
maximum monetary amounts available under the aircraft
insurance policy for indemnification, damages related to the
destroyed aircraft, and punitive damages.
Heins's Complaint is notably silent on the Declaratory
Judgment Act. Claim One asserts theories of waiver and
estoppel against Commerce and Industry Insurance. He ties
these theories to the allegations that Commerce and Industry
Insurance initially reserved its right to investigate,
obtained counsel to represent him, filed an Answer in the
Turner case but declined (shortly thereafter) to provide him
with coverage in connection with the Turner case. Claim Two
relies on these same allegations and asserts that Commerce
and Industry Insurance denied coverage under the aircraft
insurance policy in bad faith.
Heins's Third Claim alleges, “Under the terms of
The Policy, The Company is required to defend and pay the
claims alleged in the [Turner case].” Id.,
PageID #72, ¶20. Claim Four frames additional
theories of estoppel and bad faith as follows:
Because The Aircraft had been the object of a wrongful
deprivation of the Aircraft without claim or color of right
and with an unreasonable risk of permanent loss to Plaintiff
… immediately prior to its impacting with the earth,
The Company is estopped and precluded from denying coverages
and its duty to Defendant Plaintiff against the claims in the
The Company's rejection of the claim for physical damage
to the [A]ircraft, refusal to provide coverage for the bodily
injury and death of Jacob Andrew Turner, and its withdrawal
from defendant Plaintiff (individually) the claim made
against him [in the Turner case] were actions made in bad
(Doc. #3, PageID #72, ¶s 22-23).
faith emerges again in Plaintiff Heins's Fifth
Claim-“The Company has rejected the claim for the total
physical loss of the aircraft contrary to the terms of the
policy and in bad faith”-and in his Sixth
Claim-asserting bad faith denial of funeral and burial
expenses. Id., PageID #73, ¶s 25, 27.
Heins does not argue that this Court lacks diversity
jurisdiction or that removal was improper. For good reason:
There appears no doubt that complete diversity of citizenship
exists between the parties and the amount in controversy
exceeds $75, 000. See Doc. #28, PageID #s
4-8; see also Gray v. Bush, 628 F.3d 779, 783 (6th
Cir. 2010). The presence of diversity jurisdiction is a
salient point that Defendants emphasize in their fight
against an Order remanding this case to state court. But
before reaching this, more needs to be said about the
Declaratory Judgment Act and the parties'
Declaratory Judgment Act provides that district courts
“may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not
further relief is or could be brought.” 28 U.S.C.
§ 2201(a). “‘[D]istrict courts possess
discretion in determining whether and when to entertain an
action under the Declaratory Judgment Act, even when the suit
otherwise satisfies subject matter jurisdictional
prerequisites.'” Adrian Energy Assocs. v.
Michigan Pub. Serv. Comm'n, 481 F.3d 414, 421 (6th
Cir. 2007) (quoting Wilton v. Seven Falls Co., 515
U.S. 277, 282 (1995)).
parties first disagree over whether this case actually is a
declaratory-judgment action. Plaintiff Heins maintains that
this case “is essentially a declaratory judgment
action” because he seeks to determine, in part, whether
the aircraft insurance policy imposes certain obligations
upon Defendant Commerce and Industry ...