Apperson v. Auto Owners Insurance Company

Filing 40

MEMORANDUM AND ORDER re: 30 MOTION for Leave to File its Third-Party Complaint Out of Time filed by Defendant Auto Owners Insurance Company motion is GRANTED. Signed by District Judge Rodney W. Sippel on 11/5/13. (LGK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NORTHERN DIVISION
LARRY APPERSON,
Plaintiff,
v.
AUTO OWNERS INSURANCE
COMPANY,
Defendant.

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Case No. 2:13 CV 35 RWS

MEMORANDUM AND ORDER
This matter is before me on Defendant Auto Owners Insurance Company‟s motion for
leave to file a third-party complaint out of time. Auto Owners‟ third-party claim seeks a
declaratory judgment that it has a right to subrogation against Wayne Pruitt, the tortfeasor in the
underlying action, in the event it is determined to owe coverage to Plaintiff Larry Apperson.
Apperson opposes this motion and the issue is fully briefed. For the reasons set out below, I will
grant Auto Owners‟ motion.
Apperson argues that Auto Owners‟ third party claim is not ripe for adjudication. As a
general rule, an insurance company acquires no subrogation interest in the claim of an insured
until payment to the insured is made. See Seek v. Ceico General Insurance Company, 21 S.W.3d
129, 135 (Mo. 2007). However, Auto Owners maintains that it is not seeking a subrogation
recovery at this time, rather it is asking this Court to declare its subrogation rights against Pruitt
in the event it is determined to owe coverage to Apperson. Because the action already pending
will determine whether Auto Owners owes coverage to Apperson, Auto Owners‟ subrogation
claim is not hypothetical, and the contingent nature of the obligation does not bar Auto Owners
from seeking declaratory relief. See, e.g., Metayer v. PFL Life Ins. Co., 30 F.Supp.2d 57 (D.Me.

1998) (“a declaratory judgment that a right to subrogation exists or does not exist may issue
before liability of the insurer to the insured is established.” (citing Allendale Mut. Ins. Co. v.
Kaiser Engineers, Div. of Henry J. Kaiser Co., 804 F.2d 592 (10th Cir. 1986))). Thus, an actual
controversy exists between Auto Owners and Pruitt as required by Federal Rule of Civil
Procedure 57 and 28 U.S.C. § 2201.
Apperson also argues this Court cannot exercise supplemental jurisdiction over Auto
Owner‟s third-party claim under 28 U.S.C. § 1367 because doing so would destroy diversity
jurisdiction under 28 U.S.C. § 1332. Pruitt, like Apperson, is a citizen of Missouri. Although it
does not appear that the Eight Circuit Court of Appeals has addressed the issue of whether a
defendant‟s assertion of a third-party claim against a non-diverse defendant who is not
indispensable would destroy diversity jurisdiction, other courts have found “that „plaintiff‟ in [28
U.S.C. 1367] refers to the original plaintiff in the action—not to a defendant that happens also to
be a counter-plaintiff, cross-plaintiff, or third-party-plaintiff.” Ubben v. Saunder Woodworking
Co., No. C05-3043-PAZ, 2006 WL 1285104 (N.D.Iowa May 10, 2006) (quoting State Nat'l Ins.
Co. v. Yates, 391 F.3d 577, 580 (5th Cir. 2004)). I am persuaded by this reasoning. Because
Pruitt is not an indispensable party to the original controversy between Apperson and Auto
Owners, the addition of Pruitt as a third-party defendant does not destroy diversity jurisdiction.
Accordingly,
IT IS HEREBY ORDERED that Defendant Auto Owners Insurance Company‟s motion
for leave to file a third-party complaint out of time is GRANTED.

_____________________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 30th day of October, 2013.