The Kentucky case Estate of Ferrell v. J & W Recycling, Inc. involved a semi truck and car accident in which both drivers died. The two drivers were killed when an automobile and a tractor-trailer collided in Greenup County, Kentucky, in 2011. The driver of the semi-truck was apparently operating the commercial vehicle during the course of his employment for a recycling company. When the accident occurred, the recycling business carried commercial general liability insurance. Still, the company’s insurer refused to honor the policy and indemnify the business after the fatal accident.
Following the tragic wreck, the wife of the automobile driver filed a wrongful death lawsuit against the recycling business. According to her complaint, the accident resulted in part from improper truck loading by a forklift operator. After nearly two years of litigation, the man’s wife and the recycling company agreed upon a settlement in which the business admitted fault for the deadly collision. As part of the agreement, the decedent’s wife accepted the recycling company’s rights under its liability insurance policy. When she filed a petition with the court to “adjudge the existence of coverage” under the policy the insurer sought to move the case to the U.S. District Court for the Eastern District of Kentucky based upon diversity jurisdiction.
28 U.S.C. § 1332 allows a party to a lawsuit to remove a case from state court where the parties are residents of different states and the amount in controversy exceeds $75,000. The Federal Declaratory Judgment Act, however, allows a federal court to refuse jurisdiction where appropriate. After examining several factors, the federal court declined to hear the case.