Snodgrass

The appeal in this case requires us to determine whether the district court abused its discretion in declining to exercise jurisdiction over an action that included a claim for declaratory relief. Under the Declaratory Judgment Act, 28 U.S.C. § 2201 , a district court has discretion to decline jurisdiction in actions seeking declaratory relief. We conclude that the district court abused its discretion in this case. We reverse and remand with instructions that the district court resume jurisdiction of the case and proceed to the merits of the dispute.

I

Cecil Snodgrass (“Snodgrass”) is an emergency room physician and surgeon who suffered a serious injury to his dominant hand in October 1994 and claims to be permanently disabled from working as a surgeon. Snodgrass submitted a timely proof of loss to Provident Life & Accident Insurance Company (“Provident”) as required by his disability insurance policy. Snodgrass claimed disability payments from the date of his injury until his sixty-fifth birthday. Provident made payments to Snodgrass under the policy from July 1995 to October 1995 but then refused to make further disbursements. Snodgrass and his wife filed suit in state court,…