§ 12.4 Federal Courts - Parties and Required Parties

• Library: Guide to South Carolina Liability and Property Insurance Law (SCBar) (2019 Ed.)

§ 12.4 Federal Courts - Parties and Required Parties

In addition to naming the insured as a party to a declaratory judgment action, insurers often also name the claimant or plaintiff in the underlying lawsuit as a defendant to the declaratory judgment action that is brought against the insurer. This is because an actual controversy exists between the insurer and a third party injured by the insured when the insurer has filed a declaratory judgment action against the insured and the injured third party seeking a determination about its obligations under the policy.²¹ However, a co-defendant of the insured in the underlying lawsuit has been determined to not be a proper party to a declaratory judgment action brought by the insurer.²²

Federal Rule of Civil Procedure 19(a) identifies who is a required party and states:

(a) Persons Required to Be Joined if Feasible.

(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

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