4.6 Contribution

• Jurisdiction: Arizona

Insurance companies may not bring declaratory judgment actions against each other to determine their coverage rights. In every declaratory judgment action, the plaintiff must sufficiently allege facts that outline a justiciable controversy.^[179] Where the plaintiff is an insurance company, it must establish that it has standing to bring an action under the Declaratory Judgment Act.^[180] Under the Uniform Declaratory Judgment Act, standing and justiciability requirements tend to overlap.^[181] "Under the Declaratory Judgment Act a justiciable controversy exists if there is 'an assertion of a right, status, or legal relation in which the plaintiff has a definite interest in a denial of it by the opposing party.'"^[182] When the insurance company brings the declaratory judgment action against another insurance company, it must show that it is entitled to relief, by establishing a legal, protectable interest; i.e., the complaint must present facts establishing that the plaintiff has a present legal right against the defendant insurance company with respect to which the plaintiff insurance company may be entitled as a general rule to some "consequential relief, immediate or prospective."^[183] Thus, the plaintiff insurance company must assert in its complaint a legal relation, status or right in which it has a definite interest and an assertion of the denial of that right by the defendant insurance company in order for the plaintiff insurance company to be entitled to declaratory judgment relief.^[184] Thus, where a plaintiff insurance company believes it has no coverage for a loss, it is proper to bring a declaration judgment action against its insured for a coverage determination under the policy but it is not appropriate to bring the declaratory judgment actions against competing insurance companies.

Merely alleging that the plaintiff insurance company brings an action pursuant to the Arizona Declaratory Judgment Act is not enough to establish a justiciable controversy.^[185] This issue was previously addressed by the Arizona court in Farmers Insurance Group v. Worth Insurance Group.^[186] In Farmers, a declaratory judgment action was brought by Worth Insurance Company seeking a declaration that it had no liability insurance regarding a car owned by Mr. Wilson. According to the complaint, the Wilson vehicle was involved in an accident with a car operated by Mr. Turner. Mrs. Jensen was also a passenger in the Turner vehicle. Worth alleged, among other things, that Mr. Jensen subsequently filed a lawsuit to recover damages from the Wilsons for the death of his wife, Mrs. Jensen. Wilson, Turner and Jensen were joined as defendants to the declaratory judgment action. The parties subsequently filed a stipulation so that Farmers Insurance Group could be joined as a party defendant. However, there was no indication in the stipulation as to why Farmers was joined and no relief was ever requested against Farmers. After a bench trial, judgment was...