United States Fourth Circuit

In an action brought by insurer seeking rescission and recovery of defense costs based on D&O liability policies it issued to reciprocal insurers, reinsurers, and related parties, dismissal of case without prejudice to avoid entanglement of insurer's case with federal and state civil actions against defendants based on their financial collapse, is vacated where: 1) plaintiff is not a party to any of the state actions; 2) the parties and claims in the suits are not parallel; 3) no circumstances justifying surrender of jurisdiction exist; and 4 the court below abused its discretion when it abstained from entertaining the claims raised in the complaint.

Appellate Information

• Decided 10/30/2006
• Published 10/30/2006

Judges

• Before WILLIAMS, Circuit Judge, HAMILTON, Senior Circuit Judge, and RICHARD L. VOORHEES, United States District Judge for the Western District of North Carolina, sitting by designation.

Court

• United States Fourth Circuit

Counsel

• For Appellees:
  
• ARGUED:  Peter Francis Lovato, III, Boundas, Skarzynski, Walsh & Black, L.L.C., Chicago, Illinois, for Appellant.  J. Jonathan Schraub, Sands, Anderson, Marks & Miller, McLean, Virginia, for Appellees.   ON BRIEF:  Ellen D. Jenkins, Boundas, Skarzynski, Walsh & Black, L.L.C., Chicago, Illinois;  James Skarzynski, Cecilia W. Kaiser, Boundas, Skarzynski, Walsh & Black, L.L.C., New York, New York;  John M. Claytor, Elizabeth E.S. Skilling, Harman, Claytor, Corrigan & Wellman, Richmond, Virginia, for Appellant.  Danny M. Howell, Paige A. Levy, Timothy K. Halloran, Sands, Anderson, Marks & Miller, McLean, Virginia, for Appellees John William “B” Crews, Judith A. Kelley, and Gordon D. McLean;  Patrick H. Cantilo, Pierre J. Riou, Susan E. Salch, Cantilo & Bennett, L.L.P., Austin, Texas, John Conrad, JoAnne L. Nolte, The Conrad Firm, P.C., Richmond, Virginia, for Appellee Alfred W. Gross, Commissioner of Insurance, Bureau of Insurance, State Corporation Commission of the Commonwealth of Virginia, as Deputy Receiver of the Reciprocal Group and Reciprocal of America, in Receivership;  Charles F. Witthoefft, Michael P. Falzone, Hirschler Fleischer, P.C., Richmond, Virginia, for Appellees Kenneth R. Patterson and Carolyn B. Hudgins;  Robert M. Tyler, Christine D. Mehfoud, McGuirewoods, L.L.P., Richmond, Virginia, Robert F. Northcutt, Capell & Howard, P.C., Montgomery, Alabama, for Appellee John N. Bethay;  Russell H. Roberts, Fredericksburg, Virginia, for Appellee Richard W.E. “Dick” Bland;  Curtis G. Manchester, Reed Smith, L.L.P., Richmond, Virginia, William H. Farmer, J.W. Luna, Farmer & Luna, P.L.L.C., Nashville, Tennessee, for Appellee Paula A. Flowers, Commissioner of Commerce and Insurance for the State of Tennessee, as Liquidator for Doctors Insurance Reciprocal, American National Lawyers Insurance Reciprocal and THE Reciprocal Alliance;  Dana J. Finberg, Leclair Ryan, P.C., Richmond, Virginia, for Appellee Thomas K. Smith;  David N. Anthony, Mark C. Shuford, Kaufman & Canoles, P.C., Richmond, Virginia, G. Brian Jackson, Robert L. Trentham, Taylor B. Mayes, Miller & Martin, P.L.L.C., Nashville, Tennessee, for Appellee William T. Sugg;  Frank N. Cowan, Deborah S. O'Toole, Cowan & Jowen, P.C., Richmond, Virginia, for Appellee Ronald K. Davis;  David M. Harris, Ryan J. Gavin, Andrew Margrabe, Greensfelder, Hemker & Gale, P.C., St. Louis, Missouri, Bruce M. Marshall, Durrettebradshaw, P.L.C., Richmond, Virginia, for Appellee Gerald R. Wages.