Plaintiff in Underlying Suit is not a Required Party in Dispute Between Insurers on Duty to Defend

    In a dispute between two insurers regarding which had a duty to defend in the underlying lawsuit, the federal district court denied one insurer's motion to join the underlying plaintiff as a necessary party. Amerisure Ins. Co. v. Burlington Ins. Group, Inc., 2025 U.S. Distl LEXIS 144927 (N.D. Ill. July 29, 2025). 

    Amerisure sued Burlington Insurance Group, Inc. (TBIC) for a declaratory judgment that TBIC owed coverge to Sollitt Construction Company and Chicago Park District in the underlying action. The Park District hired Sollitt for a renovation project. Sollitt procured a CGL policy from Amerisure covering Sollitt and the Park District as an additional insured. Sollitt then subcontracted with International Equipment, Inc. (IEI) to perform scaffolding work. Under the subcontract, IEI had to obtain primary additional insured coverage for Sollitt and Park District related to IEI's work. IEI obtained a cGL policy from TBIC. 

    One of IEI's laborers, Gerardo Aleman, allegedly fell into a hole and insured himself. Aleman sued the Park District and Sollitt for negligence, seeking damages for the injuries he sustained. Sollitt demanded that IEI and TBIC defend and indemnify Sollitt and the Park District. Amerisure agreed to defend Sollitt and the Park District, subject to a reservation of rights to pursue and implicate all available primary insurance to Sollitt and the Park District.

    Amerisure sued TBIC for a declaratory judgment that Sollitt and the Park District qualified as additional insureds under the TBIC policy on a primary and non-contributory basis. TBIC moved for an order requiring Amerisure to join Aleman as a necessary party defendant. Amerisure argued that Aleman was not a "necessary" party that must be jointed under Rule 19 (a) Fed. R. Civ. P. 

    TBIC argued that where the insurer initiates the coverage action, the underlying tort plaintiff is a necessary party that must be joined. Amerisure responded that the underlying claimant would not be left with no coverage if absent from a declaratory judgment action. Rather, this action concerned the priority of coverage available to the insureds from their insurers. Amerisure contended that the court could award complete relief amongst the parties on this coverage determination without Aleman being joined. 

    TBIC contended the determination of coverage in this case wold impact whether Aleman would have one or two policies from which to satisfy any judgment that may ultimately be entered should it prevail in the underlying case,

    The court disagreed and found that TBIC had not met its burden to show that Aleman was a required party. TBIC failed to show that without Aleman, the court would be unable to accord complete relief among existing parties. Aleman was not a party to either of the policies. Thus, the court could accord the existing parties complete relief by determining whether TIIC owed a duty to defend and indemnify Sollitt and the Park District. 

    Aleman was adequately protected because the plaintiff, Amerisure, was motivated to vigoursly prosecute the declaratory judgment action. Therefore, it was not necessary to join Aleman. 

    TBIC failed to establish that Aleman was a required party under Rule 19 (a)(1) and thus TBIC's motion was denied.