The opinion of the court was delivered by: Herndon, Chief Judge:
This is a declaratory judgment action in which plaintiff First Professionals Insurance Company, Inc. ("First Professionals") seeks a declaration that it has no duty to provide coverage or defend defendants Oscar F. Florendo, M.D. ("Dr. Florendo") or Osbec Medical of Southern Illinois LLC ("Osbec Medical") in a lawsuit filed against defendants Dr. Florendo, Osbec Medical, and Wal-Mart Stores, Inc. ("Wal-Mart") in state court (the "underlying litigation") by defendant Kara S. Manley ("Manley"), as administrator of the Estate of Gary W. Manley, who allegedly died from an overdose of medication following treatment from a slip and fall at Wal-Mart. Wal-Mart has filed a motion to dismiss (Doc.6) this case under Federal Rule of Civil Procedure 12(b)(7), contending that First Professionals' complaint should be dismissed for failure to add all necessary parties to the action under Federal Rule of Civil Procedure19. Specifically, Wal-Mart argues that other insurers who may have provided insurance to Dr. Florendo are necessary parties to this declaratory judgment action. The Court disagrees and denies WalMart's motion to dismiss (Doc. 6).
On January 6, 2010, Manley filed suit against Wal-Mart, Dr. Florendo, and Osbec Medical, alleging, as is relevant to this case, a wrongful death/negligence claim against Dr. Florendo and Osbec Medical on behalf of the Estate of Gary W. Manley. Specifically, Manley alleged that on June 8, 2010, Dr. Florendo and Osbec Medical negligently prescribed a fentanyl transdermal patch to Manley's decedent, Gary S. Manley, when he presented himself to Dr. Florendo and Osbec Medical with complaints of severe back pain that resulted in his death on June 11, 2008. Dr. Florendo and Osbec Medical sought insurance coverage from First Professionals.
First Professionals denied coverage, and on March 14, 2011, First Professionals filed a declaratory judgment action pursuant to 28 U.S.C. § 2201 against Dr. Florendo, Osbec Medical, Wal-Mart, and Manley based upon diversity jurisdiction. In the complaint, the facts of which we accept as true,*fn1 First Professionals alleged that on or about November 2, 2009, Dr. Florendo applied for insurance coverage with First Professionals, wherein he indicated in his application that he had no knowledge of any circumstances that might give rise to a claim. Based upon his application, First Professionals issued Dr. Florendo a professional liability insurance policy that became effective on December 1, 2009, but with an endorsement effective date of January 17, 2001. First Professionals alleges, however, that Dr. Florendo failed to disclose the circumstances surrounding the death of Manley's decedent, which he was aware of, and that any claim arising from those circumstances would not have been covered by the insurance policy had they been disclosed and that pursuant to the conditions set forth in the insurance policy, First Professionals does not have an obligation to defend or indemnify Dr. Florendo or Osbec Medical in the underlying litigation.
On April 21, 2011, Wal-Mart filed a motion to dismiss First Professionals' complaint for declaratory judgment, alleging that First Professionals failed to name all necessary parties. Specifically, Wal-Mart alleged that upon information and belief, at the time of the death of the decedent in the underlying matter, Dr. Florendo and Osbec Medical were insured under one or more policies of liability insurance other than the policy issued by First Professionals. Wal-Mart then referenced Dr. Florendo's application for insurance with First Professionals which indicated that Dr. Florendo may have had coverage from Professional Liability Insurance Company of America ("PLICA") and ISMIE Mutual Insurance Company ("ISMIE") at or near the time of the decedent's death in the underlying litigation and the filing of the underlying complaint. Wal-Mart contends that "[a]ny insurance company that issued a policy of liability insurance to Dr. Florendo and/or [Osbec Medical] which may provide coverage for the claims in the underlying lawsuit, including [PLICA] and [ISMIE], is a necessary party to this action as their interests will be materially affected by the declarations sought by plaintiff in this case since they may be required to provide coverage to Dr. Florendo and/or [Osbec Medical] for the claims set forth in the underlying complaint if plaintiff's policy is found not to provide such coverage." Accordingly, Wal-Mart contends that First Professionals' complaint should be dismissed for failure to add all necessary parties to this action.
First Professionals counters that "[e]ven if ISMIE or PLICA could be affected by the outcome of this case, that does not make them necessary parties." First Professionals contends that it is not seeking any declaration against PLICA or ISMIE and both of those insurers insured Dr. Florendo prior to the effective date that First Professional issued its policy. As a result, First Professional contends that the Court can accord complete relief between the existing parties in regard to the its policy and therefore ISMIE and PLICA are therefore not necessary or required parties.
"In diversity cases, we apply the substantive law of the state in which the district court sits." Van Diest Supply Co. v. Shelby Cnty. State Bank, 425 F.3d 437, 439 (7th Cir. 2005) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938)). "Thus, in a diversity case, while the nature of the interest sought to be enforced is determined by state substantive law, [Tompkins, 304 U.S. at 78], the issues of joinder and whether or not the court should proceed in the absence of an interested party are matters of federal law." Krueger v. Am. States Ins. Co., 996 F.2d 928, 931 (7th Cir. 1993) (citing Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 125 n.22 (1968)).
"The purpose of Rule 19 is to 'permit joinder of all materially interested parties to a single lawsuit so as to protect interested parties and avoid waste of judicial resources.'" Askew v. Sheriff of Cook Cnty., 568 F.3d 632, 634 (7th Cir. 2009) (quoting Moore v. Ashland Oil, Inc., 901 F.2d 1445, 1447 (7th Cir. 1990)). "Dismissal, however, is not the preferred outcome under the Rules." Askew, 568 F.3d at 634. "Courts are 'reluctant to dismiss for failure to join where doing so deprives the plaintiff of his choice of federal forum.'" Id. (quoting Davis Cos., 268 F.3d at 481).
Under Rule 19, there is "a fundamental distinction between two kinds of missing parties: those whose joinder is feasible and those whose joinder is not feasible, because it would defeat subject-matter jurisdiction, or the party is beyond the personal jurisdiction of the court, or the party has and makes a valid objection to venue." Askew, 568 F.3d at 634-35. "Rule 19(a) address 'persons required to be joined if feasible,' and Rule 19(b) describes what the court must do if joinder is not feasible." Id. at 635. The first step is to identify which parties, if any, fall within the scope of Rule 19 and are therefore a "required party." Askew, 568 F.3d at 634. Rule 19(a)(1) defines a "required party" as follows:
"(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the ...