Westfield Insurance Company v. Golden Phoenix Restaurant Inc
2:17-cv-00007
N.D. Ind.May 4, 2017Background
- Underlying tort suit: Parducci sued Evelyn Huynh (and later her employer Golden Phoenix and Quynh Phung) for injuries when Huynh’s car struck him during a post-delivery incident on Sept. 13, 2015.
- Progressive (Evelyn/Wendy Huynh’s auto insurer) filed a state-court declaratory judgment action seeking a ruling that its personal auto policy excludes coverage for retail food delivery.
- Westfield (Golden Phoenix’s CGL insurer) filed this federal declaratory judgment action seeking a declaration that Westfield has no duty to defend or indemnify Golden Phoenix, Quynh, or Evelyn under the CGL policy due to the policy’s Auto Exclusion and because the PAI coverage does not apply.
- Parducci moved to join Progressive (as a plaintiff) and Wendy Huynh (as a defendant) under Fed. R. Civ. P. 19, arguing that complete relief cannot be afforded and that he faces a risk of inconsistent obligations.
- Progressive, a nonparty, filed a response brief without leave; Parducci moved to strike that brief.
- The court granted the motion to strike Progressive’s unauthorized response and denied Parducci’s motion to join Progressive and Wendy as required parties under Rule 19.
Issues
| Issue | Plaintiff's Argument (Parducci) | Defendant's Argument (Westfield) | Held |
|---|---|---|---|
| Motion to strike Progressive’s response brief | Progressive should not have filed as nonparty; move to strike because it lacked leave | Progressive filed without leave; filing was improper | Court granted Parducci’s motion and struck Progressive’s response brief |
| Whether Progressive and Wendy are required under Rule 19(a)(1)(A) (complete relief) | Both declaratory actions concern which insurer covers Evelyn; all insurers must be joined to afford complete relief | Westfield’s CGL coverage dispute is distinct (Auto Exclusion/PAI) and assumes Evelyn was an employee; Progressive’s state action addresses a different policy exclusion (delivery exclusion) | Court held complete relief can be afforded among existing parties; joinder not required |
| Whether Progressive is required under Rule 19(a)(1)(B)(ii) (risk of inconsistent obligations) | If both insurers litigate coverage separately, Parducci risks inconsistent obligations/adverse double obligations | Westfield is not contesting employment status and is not asserting obligations against Parducci; Rule 19 prevents inconsistent obligations, not inconsistent adjudications | Court held no substantial risk of inconsistent obligations; joinder not required |
Key Cases Cited
- Sta-Rite Indus. v. Allstate Ins. Co., 96 F.3d 281 (7th Cir.) (distinguishing competing-coverage cases and context for insurer joinder)
- Hayes Lemmerz Int’l, Inc. v. Ace Am. Ins. Co., 619 F.3d 777 (7th Cir.) (duty to defend determined by the underlying complaint)
- Transamerica Ins. Servs. v. Kopko, 570 N.E.2d 1283 (Ind. 1991) (insurance duty-to-defend principle applied in Indiana)
- Scottsdale Ins. Co. v. Subscriptions Plus, Inc., 195 F.R.D. 640 (W.D. Wis.) (Rule 19 prevents inconsistent obligations, not inconsistent adjudications)