govinfo:USCOURTS-njd-2_25-cv-13202-0

1 
 
UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
 
AMGUARD INSURANCE COMPANY, 
Plaintiff, 
Civil No.: 25-cv-13202 (KSH) (CF) 
 
 v. 
ALABED MNAWER, 
 
 Defendant. 
 
OPINION 
 
Katharine S. Hayden, U.S.D.J. 
I. Introduction 
Amguard Insurance Company asks for a declaration that it has no duty to defend or 
indemnify its insured, defendant Alabed Mnawer, against tort claims filed against him in New 
Jersey state court. For the reasons set forth below, the Court declines to exercise its discretionary 
jurisdiction over this case and denies Amguard’s motion for default judgment. 
II. Background 
The complaint alleges as follows. Amguard is a Nebraska corporation with its principal 
place of business in Pennsylvania. (D.E. 1, Compl. ¶ 2.) Mnawer is a resident of New Jersey 
and lives at 33 Dietrich Lane in North Haledon. (Id. ¶ 3.) 
This matter relates to a state court tort action filed by Glenn Schmidt in November 2024 
(the “underlying action”). (Id. ¶ 12.) Mnawer rented Schmidt the basement of his residential 
property at 33 Dietrich Lane. (D.E. 1-1 & Ex. B, State Court Compl. ¶ 1.) According to the 
state court complaint, on November 16, 2022, Mnawer “bang[ed] on the outside wall of 
Plaintiff[] [Schmidt’s] apartment . . . broke through the wall and caused injuries to Plaintiff.” 
(Id. ¶¶ 1-4.) Count One alleges that Mnawer “acted negligently in the infliction of injuries to 
NOT FOR PUBLICATION PageID:
<pageID>
2 
 
Plaintiff.” (Id. ¶ 7.) Count Two alleges additional facts: that “[a]fter entering Plaintiff’s 
apartment without permission, [Mnawer] struck Plaintiff with a weapon . . . constitut[ing] an 
assault on Plaintiff.” (Id. ¶¶ 10-11.) Counts Three through Ten allege additional counts 
sounding in negligence, trespass, and breach of defendants’1 duty to exercise reasonable care of 
the property and to provide quiet enjoyment. (Id. ¶¶ 13-49.) 
Amguard issued a homeowner’s insurance policy to Mnawer effective January 22, 2022 
through January 22, 2023. (D.E. 1, Compl. ¶ 6.) The policy contained the following personal 
liability coverage: 
SECTION II – LIABILITY COVERAGES 
 
A. Coverage E – Personal Liability 
 
If a claim is made or a suit is brought against an 
“insured” for damages because of “bodily injury” 
or “property damage” caused by an “occurrence” 
to which this coverage applies, we will: 
 
1. Pay up to our limit of liability for the damages 
for which an “insured” is legally liable. 
Damages include prejudgment interest 
awarded against an “insured”; and 
 
2. Provide a defense at our expense by counsel 
of our choice, even if the suit is groundless, 
false or fraudulent. We may investigate and 
settle any claim or suit that we decide is 
appropriate. Our duty to settle or defend ends 
when our limit of liability for the “occurrence” 
has been exhausted by payment of a judgment 
or settlement. 
 
(D.E. 1-1 & Ex. A, Policy, at 17.) 
 
 
1 The state court defendants include Alabed Mnawer, Khader Mnawer, John Does 1-10, and 
ABC Corp. 1-10. PageID:
<pageID>
3 
 
“Occurrence” is defined in the policy as “an accident, including continuous or repeated 
exposure to substantially the same general harmful conditions, which results, during the policy 
period, in” bodily injury or property damage. (Id. at 2.) 
The policy contained the following exclusion for expected or intended bodily injury: 
E. Coverage E – Personal Liability And Coverage F – Medical Payments To 
Others 
 
Coverages E and F do not apply to the following: 
 
1. Expected Or Intended Injury 
 
“Bodily injury” or “property damage” which is 
expected or intended by an “insured”, even if 
the resulting “bodily injury” or “property 
damage”: 
 
a. Is of a different kind, quality or degree than 
initially expected or intended; or 
 
b. Is sustained by a different person, entity or 
property than initially expected or intended. 
 
However, this Exclusion E.1. does not apply to 
“bodily injury” or “property damage” resulting 
from the use of reasonable force by an 
“insured” to protect persons or property[.] 
 
(Id. at 19.) 
 
On May 29, 2025, Amguard sent Mnawer a letter acknowledging his request for coverage 
on the underlying action and informed him that it would provide a defense pursuant to a full 
reservation of rights. (D.E. 1-1 & Ex. C, Acknowledgment Letter, at 1.) According to the 
complaint, Amguard is still providing Mnawer a defense. (D.E. 1, Compl. ¶ 15.) Discovery is 
ongoing in the underlying action and expected to conclude on July 21, 2026. See Glenn Schmidt 
v. Alabed K. Mnawer, PAS-L-003393-24. PageID:
<pageID>
4 
 
Amguard filed the instant declaratory judgment suit in this Court on July 11, 2025, 
invoking diversity jurisdiction. (D.E. 1.) It states one count for declaratory judgment pursuant 
to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 (“DJA”), requesting: 
(a) A declaration that the damages allegedly suffered by Schmidt in the 
Underlying Action are not covered by the Policy because they were not 
the result of a “bodily injury” caused by an “occurrence” as defined by the 
Policy; 
 
(b) A declaration that Schmidt’s alleged “bodily injuries” are not covered by 
the Policy because the alleged injuries were intended or expected by 
Mnawer when he intentionally struck Schmidt and are therefore excluded 
from coverage by the Policy; 
 
(c) A declaration that AmGUARD has no obligation to provide defense or 
indemnity coverage under the Policy for the damages allegedly suffered 
by Schmidt in the Underlying Action; 
 
(d) Awarding AmGUARD whatever legal and equitable relief as it may be 
entitled, including costs and attorney’s fees[.] 
 
(Id. at 5-6.) 
The summons and complaint were served upon Asma Mnawer, Mnawer’s wife, on July 
17, 2025. (D.E. 6.) Mnawer has not answered or otherwise responded to the complaint, and the 
Clerk of the Court entered default against him on August 26, 2025. (D.E. 8.) Amguard 
subsequently filed this motion, which is unopposed, for default judgment on September 29, 
2025. (D.E. 12.) In support, it filed a certification of G. William DeLaney (D.E. 12-2) and a 
moving brief. 
III. Discretionary Jurisdiction under the DJA 
The DJA provides that 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 sought.” 28 
U.S.C. § 2201(a) (emphasis added). “The Supreme Court has long held that this confers 
discretionary, rather than compulsory, jurisdiction upon federal courts.” Reifer v. Westport Ins. PageID:
<pageID>
5 
 
Corp., 751 F.3d 129, 134 (3d Cir. 2014) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 
494 (1942)). This discretion is “unique and substantial,” and courts may abstain from exercising 
jurisdiction based on “considerations of practicality and wise judicial administration.” Kelly v. 
Maxum Specialty Ins. Grp., 868 F.3d 274, 281 n.5, 282 (3d Cir. 2017) (quoting Wilton v. Seven 
Falls Co., 515 U.S. 277, 286, 288 (1995)). 
The Third Circuit has “directed courts deciding whether to entertain a declaratory action 
to weigh certain enumerated and other factors ‘bearing on the usefulness of the declaratory 
judgment remedy, and the fitness of the case for [federal] resolution.’” Id. at 282 (quoting 
Reifer, 751 F.3d at 138). The first consideration is whether there is a “parallel state proceeding,” 
which is a “significant factor.” Id. (quoting Reifer, 751 F.3d at 143-44). “[T]he absence of 
pending parallel state proceedings militates significantly in favor of exercising jurisdiction, 
although it alone does not require such an exercise.” Id. (quoting Reifer, 751 F.3d at 144). A 
proceeding is parallel when it “involves the same parties and presents the opportunity for 
ventilation of the same state law issues.” Id. at 284 (citation modified) (quoting Wilton, 515 U.S. 
at 283). An insurer’s federal declaratory judgment action is not parallel to an underlying state 
court action where the insurer is not a party to the state court action. Id. at 287. But the Third 
Circuit has recognized that, even if the proceedings are not parallel, abstaining from exercising 
jurisdiction may still be warranted if “determining the issue of coverage will rely on questions 
central to the underlying liability proceeding.” Id. at 287 n.12. 
Courts must give “meaningful consideration” to the following eight factors before 
exercising or declining to exercise jurisdiction under the DJA: 
(1) the likelihood that a federal court declaration will resolve the uncertainty of 
obligation which gave rise to the controversy; 
 
(2) the convenience of the parties; PageID:
<pageID>
6 
 
 
(3) the public interest in settlement of the uncertainty of obligation; 
 
(4) the availability and relative convenience of other remedies; 
 
(5) a general policy of restraint when the same issues are pending in a state court; 
 
(6) avoidance of duplicative litigation; 
 
(7) prevention of the use of the declaratory action as a method of procedural 
fencing or as a means to provide another forum in a race for res judicata; and 
 
(8) (in the insurance context), an inherent conflict of interest between an insurer’s 
duty to defend in a state court and its attempt to characterize that suit in federal 
court as falling within the scope of a policy exclusion. 
 
Id. at 282-83 (quoting Reifer, 751 F.3d at 146). 
Courts have denied declaratory relief in actions similar to this one, where the requested 
declaration would require the court to determine facts that are squarely at issue in an underlying 
state court proceeding. See e.g., Terra Nova Ins. Co. v. 900 Bar, Inc., 887 F.2d 1213, 1224-25 
(3d Cir. 1989) (noting the potential for duplicative litigation and conflicts of interest where “the 
same factual question”— like whether a tort was caused intentionally—“ lies at the heart of both 
an insurance coverage dispute and the underlying tort action”); Berkley Ins. Co. v Daniels, 2024 
WL 3379068, at *3 (D.N.J. Apr. 24, 2024) (Arleo, J.) (holding that “because factual issues 
bearing on the coverage dispute necessarily overlap with the Underlying Action, and to avoid 
duplicative litigation, the Court will exercise its discretion and abstain from jurisdiction”); Cont’l 
Indem. Co. v. H&M Int’l Transp., Inc., 2019 WL 1379884, at *4 (D.N.J. Mar. 26, 2019) (Walls, 
J.) (staying the matter where “the same central issue” was being litigated in the underlying 
personal injury action and the federal declaratory judgment action); Nationwide Mut. Fire Ins. 
Co. v. McNulty, 1997 WL 805165, at *5 (E.D. Pa. Dec. 30, 1997) (declining to grant summary 
judgment on the issue of indemnification where the requested declaratory relief “would require PageID:
<pageID>
7 
 
resolution of the issue of whether [defendant] committed a negligent [or an intentional] act”); 
Zurich Ins. Co. v. Alvarez, 669 F. Supp. 307, 309 (C.D. Cal. 1987) (declining to exercise 
jurisdiction under the DJA because “the Court would be required to decide predicate facts which 
may be fundamentally at issue in the state court action”). But see Phila. Contributionship Ins. 
Co. v. Malcolm, 2012 WL 2459401, at *1-4 (D.N.J. June 27, 2012) (Kugler, J.) (granting 
summary judgment on facts similar to the case at bar). 
On the other hand, courts have granted declaratory relief in insurance cases where there is 
an issue that can be determined by looking at the policy and the state court and federal pleadings. 
See, e.g., State Farm Indem. Co. v. Van Pelt, 2025 WL 2918675, at *1, *7-8 (D.N.J. Oct. 14, 
2025) (Shipp, J.) (finding that the insurer had no duty to defend or indemnify the Van Pelts 
where their son, who was involved in a car accident, was admittedly not named on their 
insurance policy and did not live with them); Great Lakes Ins. SE v. Ross, 652 F. Supp. 3d 472, 
475-76, 480 (D.N.J. 2023) (Williams, J.) (finding that the insurer had no duty to defend or 
indemnify the insured-homeowners where the insurance policy contained an independent 
contractor exclusion and the decedent was working as an independent contractor at the time of 
his injuries); Zurich Am. Ins. Co. v. Gutowski, 644 F. Supp. 3d 123, 128-30, 139-40 (E.D. Pa. 
2022) (finding that because the defendant pled guilty to the unauthorized use of the rental 
company truck involved in a car accident, and unauthorized users were not covered under the 
insurance policy, defendant was not an insured under the policy). 
The Third Circuit’s decision in Terra Nova Ins. Co. v. 900 Bar, Inc. is instructive. There, 
Terra Nova, an insurer, brought an action in federal court requesting a declaration that it had no 
duty to defend or indemnify its insured, 900 Bar, in state court actions brought by individuals 
who were shot at a bar that 900 Bar owned. Terra Nova, 887 F.2d at 1216-17. The claims PageID:
<pageID>
8 
 
against 900 Bar were for negligence and assault and battery; the insurance policy between Terra 
Nova and 900 Bar contained a coverage exclusion for assault and battery. Id. at 1217. 
The district court granted a stay2 of the action pursuant to the DJA, finding “the same 
issues of state law will be determined in a pending state suit”; that an “inherent conflict of 
interest” existed between the Terra Nova’s duty to defend its insured and its efforts to argue the 
policy exclusion applied; and that “duplicative litigation” may result if a stay was not granted. 
Id. On appeal, Terra Nova argued that its declaratory judgment action could be decided based on 
the state court pleadings alone without inquiry into the facts at issue. Id. at 1225. 
The Third Circuit upheld the stay of Terra Nova’s duty to indemnify but reversed the stay 
of Terra Nova’s duty to defend, holding that the state courts pleadings alleged negligence as well 
as assault. Id. at 1226. 
As to the duty to indemnify, the Court noted: 
the state suits may establish that [the individual defendant] committed an assault 
and battery and that this was the direct cause of any injuries. If so, his actions 
would fit the exclusionary language and the key issue in the declaratory judgment 
action would be resolved favorably to Terra Nova. If the state suits establish that 
there was no assault and battery, the exclusion would not apply to defeat 
coverage. 
 
Id. at 1227. 
 
Consequentially, “[l]ooking solely to the state court pleadings, the duty to defend exists 
because Terra Nova may have to indemnify 900 Bar,” which “compel[s] rejection of Terra 
Nova’s challenge to the stay of the duty to indemnify.” Id. at 1228. The Court found that 
“[s]ince Terra Nova disclaims any current desire to determine the facts in the state court actions, 
 
2 Courts utilize the same factors and considerations in deciding whether to exercise jurisdiction 
under the DJA and whether to stay a case under the DJA. Id. at 1224-25. PageID:
<pageID>
9 
 
the potential duty to indemnify precludes a declaratory judgment at this time that it has no duty 
to indemnify.” Id. 
IV. Discussion 
Amguard requests declarations that it has no duty to defend or indemnify Mnawer in the 
underlying action because Mnawer acted intentionally when he struck Schmidt, and expected or 
intended bodily injuries caused by an insured are not covered by the policy. (D.E. 1, Compl., at 
5-6; D.E. 12, Mtn. for Default Judgment, at 4-6.) The complaint in the underlying action raises a 
claim for assault at Count Two; however, it also raises negligence claims. (See D.E. 1-1 & Ex. 
B, State Court Compl. ¶¶ 6-49.) Mnawer answered the complaint, denying Schmidt’s allegations 
and raising affirmative defenses. See Glenn Schmidt v. Alabed K. Mnawer, PAS-L-003393-24, 
1/27/25 Answer. There have been no substantive rulings in the underlying action, and discovery 
is ongoing. See generally id. at docket. 
If the Court were to grant Amguard’s requested relief, it would have to find that Mnawer 
intentionally injured Schmidt. That fact is contested, a central issue in the underlying action, and 
cannot be determined by merely looking at the policy and the pleadings. These realities, 
analyzed in conjunction with the factors discussed supra, counsel against exercising discretion 
under the DJA. Indeed, “when the same central issue is being litigated in an underlying personal 
injury action and a federal declaratory judgment action, a federal court has grounds to abstain.” 
Cont’l Indem., 2019 WL 1379884, at *4; see also Kelly, 868 F.3d at 287 n.12 (“[I]n certain 
circumstances, determining the issue of coverage will rely on questions central to the underlying 
liability proceeding. . . . Even if the proceedings are not parallel as we have defined it, such may 
be the type of situation which nevertheless warrants a court’s abstention.” (citation omitted)); 
McNulty, 1997 WL 805165, at *5 & n.2 (finding a determination on “the issue of whether PageID:
<pageID>
10 
 
[defendant] committed a negligent [or an intentional] act . . . would be inappropriate in a 
declaratory judgment action at this time”). 
With this posture in mind, the Court turns to its required analysis of the Reifer factors to 
decide whether it should exercise jurisdiction over this declaratory judgment action. As 
discussed, the Third Circuit has made clear that cases are not parallel when “[t]he issue of 
coverage is not necessary to the resolution of the state action.” Kelly, 868 F.3d at 287. Strictly 
speaking, because Amguard is currently not a party to the underlying action, the coverage issue 
is not before the state court judge, and the cases are not parallel. This weighs in favor of 
exercising jurisdiction, but it is not dispositive. 
While the first Reifer factor would technically resolve the question of Amguard’s liability 
by determining whether Schmidt’s injury is covered by the policy, the Court cannot find that this 
consideration weighs in favor of exercising jurisdiction because it is not clear whether Mnawer 
in fact assaulted Schmidt. The second factor is neutral; since both the underlying action and this 
action were brought in New Jersey, these forums are equally convenient to the parties. As to the 
third factor, it does not appear that there is a “public interest in settlement of the uncertainty of 
obligation,” and as to the fourth, there is no more convenient remedy available because this 
Court and the state court are equally capable of declaring whether the policy applies to Schmidt’s 
injuries. See Cont’l Indem., 2019 WL 1379884, at *3. 
As to the fifth factor, there is “a general policy of restraint when the same issues are 
pending in a state court.” Id. “‘[T]he same factual question’ lies at the heart of both [this] 
insurance coverage dispute and the underlying tort action.” Terra Nova, 887 F.2d at 1225. That 
is, whether Mnawer intentionally or negligently caused Schmidt’s injuries resolves both the 
claims in the underlying action and Amguard’s claim for declaratory relief. This factor therefore PageID:
<pageID>
11 
 
weighs against exercising jurisdiction. Sixth, and similarly, there is risk of duplicative litigation 
if the Court opines on Mnawer’s intent in granting or denying declaratory relief, as this issue is 
before the state court in the underlying action. This factor weighs against exercising jurisdiction. 
See Berkley Ins. Co., 2024 WL 3379068, at *3 & n.5 (finding the fifth and sixth factors favor 
abstention “because the main substantive issues that the Court must determine to assess the 
Policy’s applicability . . . must also be determined to resolve the Underlying Action”). 
The seventh factor, involving the risk of “procedural fencing,” does not apply because 
Amguard is not a party in the state court proceeding and because it brought this suit in the same 
state as the underlying action. See Cont’l Indem., 2019 WL 1379884, at *4. This factor is 
neutral. Eighth and finally, the Court finds a conflict between Amguard’s ongoing defense of 
Mnawer in the underlying action and its characterization of the underlying action and request for 
declaratory relief here. In the underlying action, Amguard is providing Mnawer a defense and 
disputing that Mnawer assaulted Schmidt. Here, Amguard is arguing just the opposite, that 
Mnawer did assault Schmidt, and because of this intentional act Schmidt’s injuries are not 
covered by Mnawer’s insurance policy. It asks this Court to declare a key fact: that Mnawer 
intentionally injured Schmidt. (D.E. 1, Compl. at 6 (requesting a declaration that Schmidt’s 
“alleged injuries were intended or expected by Mnawer when he intentionally struck [him]”).) It 
is inappropriate “to permit an insurer to prove facts in a federal declaratory judgment action to 
establish a policy exclusion when those same facts would necessarily result in the insured being 
found liable in an underlying state court proceeding.” Zurich Am. Ins. Co. v. MJF Trucking, 
LLC, 2022 WL 2953691, at *4 (E.D. Pa. July 25, 2022) (citing Allstate Ins. Co. v. Harris, 445 F. 
Supp. 847, 851 (N.D. Cal. 1978)). This last factor weighs against exercising jurisdiction. PageID:
<pageID>
12 
 
The Court finds on balance, these factors weigh against exercising jurisdiction, 
particularly given nature of the declaratory relief sought, the nature of the underlying action, and 
what can be gleaned from the pleadings and the policy. On this record, the Court cannot 
determine whether Mnawer intended to cause Schmidt’s injuries. It is therefore unclear whether 
the policy’s coverage exclusion applies, or whether Mnawer’s alleged conduct falls within the 
policy’s definition of an “occurrence.” But if the state court finds that Mnawer unintentionally 
or negligently caused Schmidt’s injuries, the exclusion would not apply to defeat coverage. As 
in Terra Nova, where determination of the insurer’s duties depended on whether the defendant 
committed an assault, here, the state court complaint raises negligence claims in addition to 
assault claims. (D.E. 1-1 & Ex. B, State Court Compl. ¶¶ 7-49.) 
This Court declines to weigh in on the disputed factual issue of Mnawer’s intent and 
conclusively declare that the policy does or does not apply to Schmidt’s claims. 
V. Conclusion 
For the foregoing reasons, the Court declines to exercise its jurisdiction under the DJA 
and denies Amguard’s motion on that ground. An appropriate order accompanies this opinion. 
 
Dated: June 12, 2026 /s/ Katharine S. Hayden 
Katharine S. Hayden, U.S.D.J. PageID:
<pageID>

Passage view · GavelSight