The plaintiff, Northern Assurance Company of America, sought a declaration as to the priority of coverage between its policy and that of the defendant, Auto-Owners, with respect to the underlying action. In the underlying action, Ray Lequerique alleged that he was injured while visiting David Giannone, Inc. (Giannone), a property owned by the Anthony Family Limited Partnership (Anthony) and leased to the Aqua Toy Store, Inc. (Aqua). Aqua Toy Store was insured by the plaintiff Northern Assurance. Giannone was insured by the defendant Auto-Owners under a CGL policy. The CGL policy named Aqua and Anthony as additional insureds.
The plaintiff argued that the defendant must assume the sole primary obligation to defend and indemnify Aqua and Anthony in the underlying litigation because the Auto Owners policy, not the Northern Assurance policy, provides primary coverage. The defendant moved to dismiss on the grounds that the claimants in underlying proceeding were indispensable because the outcome of this action could impede their ability to protect their interest in the underlying suit.
The court agreed with the plaintiff that the claimants were not necessary parties to this action within the meaning of Rule 19 of the Federal Rules of civil procedure. The court also noted that the defendant did not adequately explain how the claimants would be prejudiced by allowing the case to continue without them, where, as here, the plaintiff argues the priority, not the availability of coverage.