United States District Court, C.D. Illinois
ORDER AND OPINION
E. Shadid United States District Judge
matter is now before the Court on Plaintiff's Motion 
to Remand and Defendant's Response  in Opposition. For
the reasons set forth below, Plaintiff's Motion is
matter stems from a complaint filed in the Circuit Court of
Tazewell County by Plaintiff Michael Kovach
(“Kovach”) against Defendants Nationwide General
Insurance Company (“Nationwide”) and Tessa A.
Alwan (“Alwan”). See Michael J.
Kovach v. Tessa A. Alwan, et al, 2019-L-53 (Tazewell
County 2019). The complaint contained three counts: two tort
actions against Alwan for negligent driving and willful and
wanton conduct, and one declaratory judgment action seeking a
determination of the limits for Alwan's liability
insurance policy with Nationwide. Nationwide filed a motion
to sever and on September 10, 2019, the Circuit Court of
Tazewell County entered an order severing the declaratory
judgment action from the two tort actions. The order stated,
“all parties having notice and being in agreement,
” though it was not clear whether the parties are
severed and whether Nationwide is the sole defendant to the
declaratory judgment action. D. 3-2, at 1. The tort claims
were stayed until December 5, 2019, and the matter is set for
status on that date.
September 17, 2019, Nationwide filed a Notice of Removal
pursuant to 28 U.S.C. §§ 1332, 1441, and 1446.
Nationwide states removal is proper because Alwan was severed
from the declaratory judgment action and, therefore, there is
complete diversity of citizenship between the parties. D. 3,
at 2. Kovach and Alwan are both citizens of Illinois.
Id. Nationwide is an Ohio corporation with its
principal place of business in Columbus, Ohio. Id.
Nationwide argues that if Alwan is not dismissed as a
defendant to the declaratory judgment action, then Alwan
should be realigned with Kovach as “[Alwan's]
interests are adverse to Nationwide, not Plaintiff
Kovach.” D. 7, at 3.
has moved for this matter to be remanded because the Circuit
Court's order does not identify the parties to the
declaratory judgment action. D. 5, at 2. Kovach argues Alwan
is a necessary party to the declaratory judgment action and
therefore, there is no diversity of citizenship. Id.
Kovach argues in the alternative that if the Court finds
Alwan was severed from the declaratory judgment action, Alwan
is subject to joinder pursuant to Federal Rule of Civil
Procedure 19(a). Id. at 3.
principal federal statute governing diversity jurisdiction,
28 U.S.C. § 1332, gives federal district courts original
jurisdiction of all civil actions ‘between …
citizens of different States' where the amount in
controversy exceeds $75, 000.” Lincoln Prop. Co. v.
Roche, 546 U.S. 81, 89 (2005). “Ordinarily, a
court will not interfere with the consequences of a
plaintiff's selection in naming parties, unless the
plaintiff has impermissibly manufactured diversity or used an
unacceptable device to defeat diversity. ” Lincoln
Prop. Co., 546 U.S. at 93 (quoting 16 J. Moore et al.,
MOORE'S FEDERAL PRACTICE § 107.14[c], p. 107-67
(3d ed. 2005)).
of whether a party is necessary or indispensable to a suit
removed to federal court follows federal law, even in a
diversity case. Georgia-Pac. Corp. v. Sentry Select Ins.
Co., No. 05-CV-826-DRH, 2006 WL 1525678, 6 (S.D. Ill.
May 26, 2006). “Applicable case law, as previously
illustrated, finds that when dealing with an issue of
insurance coverage, the underlying claimants are necessary
parties, whether the declaratory judgment action is filed by
the insured or insurer.” Id. at 8.
jurisdiction is based on diversity of citizenship, the court
may ascertain whether the alignment of the parties as
plaintiff and defendant conforms with their true interests in
the litigation.” American Motorists Ins. Co. v.
Trane Co., 657 F.2d 146, 149 (7th Cir. 1981) (quoting
Indianapolis v. Chase National Bank, 314 U.S. 63
(1941)). “Realignment is proper when ... no actual,
substantial controversy exists between parties on one side of
the dispute and their named opponents, although realignment
may destroy diversity and deprive the court of
the order severing the three counts does not clearly state
whether both Alwan and Nationwide are defendants to the
declaratory judgment action or if Nationwide is the sole
remaining defendant, this Court could assume both are still
defendants to the declaratory action. That assumption would
defeat diversity and the case would be remanded as Plaintiff
Kovach and Defendant Alwan are both citizens of Illinois.
Court takes Nationwide's position that Alwan is not a
defendant to the declaratory judgment action, it would find
Alwan is a necessary party under Rule 19. The issue of
joinder in a diversity case is a matter of federal law.
Winklevoss Consultants v. Federal Ins. Co., 174
F.R.D. 416, 419 (N.D. Ill. 1997), Krueger v.
Cartwright, 996 F.2d 928, 931 (7th Cir. 1992). An absent
party is deemed “necessary” if it “claims
an interest relating to the subject matter of the
action” and the party's absence will either (a)
prejudice his ability to protect that interest or (b)
“leave any of the persons already parties subject to a
substantial risk incurring double, multiple, or otherwise
inconsistent obligations.” Fed.R.Civ.P. 19(a).
Regardless of whether Alwan remained a defendant to the
declaratory judgment action or if she was severed by the
Circuit Court's order and then joined as a necessary
party under Rule 19, the Court must determine whether the
parties are properly aligned in this action.
the victim of an insured is on one side of the lawsuit and
the insured and his insurance carrier are on the
other…” Truck Ins. Exch. v. Ashland Oil,
Inc., 951 F.2d 787, 788 (7th Cir. 1992). However, the
Seventh Circuit has recognized the normal alignment of
parties in a suit seeking a declaratory judgment of
non-coverage is Insurer vs. Insured and Injured Party.
Home Ins. Co. of Ill. v. Adco Oil Co., 154 F.3d 739,
741 (7th Cir. 1998). Further, a court should align the
parties according to their ultimate interests before
determining diversity. Am. Motorists Ins. Co., ...