Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01954/USCOURTS-azd-2_11-cv-01954-5/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

St. Paul Fire & Marine Insurance

Company, Charter Oak Fire Insurance

Company, and Travelers Indemnity

Company of America,

Plaintiffs,

v.

Lexington Insurance Company, 

American Home Insurance Company,

Commerce & Industry Insurance

Company, and Liberty Mutual Insurance

Company,

Defendants. 

Zurich American Insurance Company,

Cross-Claimant,

v.

Ohio Casualty Insurance Company,

American Safety Indemnity Company,

Lexington Insurance Company, 

American Home Insurance Company,

Commerce & Industry Insurance

Company, and Liberty Mutual Insurance

Company,

Cross-Defendants.

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No. CV-11-1954-PHX-SMM

ORDER

Case 2:11-cv-01954-SMM Document 381 Filed 08/15/14 Page 1 of 13
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American Home Insurance Company and

Commerce & Industry Insurance

Company,

Counter/Cross-Claimants,

v.

St. Paul Fire & Marine Insurance

Company, Charter Oak Fire Insurance

Company, Travelers Indemnity Company

of America, Ohio Casualty Insurance

Company, Maryland Casualty Company, 

Zurich American Insurance Company,

and American Guarantee & Liability

Insurance Company,

Counter/Cross-Defendants.

Lexington Insurance Company,

Counter/Cross-Claimant,

v.

St. Paul Fire & Marine Insurance

Company, Charter Oak Fire Insurance

Company, Travelers Indemnity Company

of America, Ohio Casualty Insurance

Company, Maryland Casualty Company, 

Zurich American Insurance Company,

and American Guarantee & Liability

Insurance Company,

Counter/Cross-Defendants.

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For the reasons that follow, the Court declares the remaining parties’ respective

obligations, but declines to award further declaratory relief.

BACKGROUND

The origins of this declaratory judgment action can be traced back to a residential

housing development (the “Development”) constructed in Surprise, Arizona between 1996

and 2005. The general contractor was Del Webb Home Construction, Inc. (“DWHC”), a

wholly owned subsidiary of Del Webb Communities, Inc. (“DWCI”), which is itself a wholly

owned subsidiary of Del Webb Corp. (collectively “Del Webb”). DWHC entered into

Case 2:11-cv-01954-SMM Document 381 Filed 08/15/14 Page 2 of 13
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1

 Because the parties’ summary judgment motions involved only three of the six

subcontractors, the contracts for the other three subcontractors are not before the Court.

However, the contracts that were submitted span several years and use virtually

indistinguishable language to describe the subcontractor’s insurance obligations. Since no

party has claimed that their respective insureds’ contracts were materially different, the Court

cautiously proceeds with this characterization of the contractual language.

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contracts with six different subcontractors for the provision of various construction tasks.

The contracts required the subcontractors to maintain commercial general liability (“CGL”)

insurance with two million dollars in policy limits and to endorse Del Webb as an additional

primary insured. (E.g., Docs. 221-1 at 5-6, 15, 25-26; 226-2 at 18; 265-3 at 17-18, 72-73, 99.)

While allowing for the requisite CGL limits to be split between primary and excess policies,

the contracts stated: “It is expressly agreed that any other insurance covering [Del] Webb is

excess over and non-contributing with [the subcontractor’s] commercial general liability

insurance.” (Id.)

1

On January 28, 2008 hundreds of Development homeowners served DWCI, the entity

that sold the homes, with notice pursuant to Arizona’s Purchaser Dwelling Act, Ariz. Rev.

Stat. § 12-1361 et seq., alleging construction defects that implicated several subcontractors.

On the same day, hundreds of other Development homeowners served DWCI with a demand

for arbitration regarding analogous construction defects. The notice of construction defects

eventually matured into a civil action, Glen Zelkind et al. v. Del Webb Communities,

Maricopa Superior Court Case No. CV2008-3089, that has progressed to trial. The

arbitration, however, was resolved in favor of the homeowners resulting in a $13.5 million

award against Del Webb, which Del Webb appealed. As of January 3, 2014, the defense

costs in the civil action were about to surpass the amount of the arbitration award.

On October 6, 2011, three insurers that were defending Del Webb in the underlying

actions filed the instant action against 13 insurers who insured one or more subcontractors

and/or Del Webb at various times but refused to contribute or contributed less than their

share of defense costs. Plaintiffs sought a declaration of defense duties and a declaration of

entitlement to equitable contribution. During nearly three years of proceedings, the complaint

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has been amended twice, 19 different insurers have appeared, and six Defendants filed

counterclaims and crossclaims for relief identical to that sought by Plaintiffs. 

The Court and the parties agreed at the April 16, 2012, Rule 16 conference to

bifurcate the proceedings so that the first round of dispositive motions would resolve as a

matter of law any disputes about whether a party had a duty to defend under one or more

policies. (Docs. 97; see 319 at 2.) Four of the nineteen insurers had been dismissed (Docs.

87; 358) before the parties participated in a settlement conference that resulted in the

dismissal of another three parties and 32 claims, counterclaims, and crossclaims (Docs. 366;

374; 375; 379; 380). Five dispositive motions were timely filed: one was withdrawn, two

were denied as moot pursuant to settlement, and two were decided by the Court. Only two

parties filed challenges to their duty to defend under any of their polices (Docs. 258; 267),

but neither challenge was successful (Docs. 344; 350).

LEGAL STANDARDS

“In a case of actual controversy . . . any court of the United States . . . may declare the

rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C.

§ 2201(a) (emphasis added). The declaratory judgment case or controversy “requirement is

identical to Article III’s constitutional case or controversy requirement.” American States Ins.

Co. v. Kearns, 15 F.3d 142, 143 (9th Cir. 1994). This prerequisite is satisfied where “there

is a substantial controversy, between parties having adverse legal interests, of sufficient

immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Cas. Co.

v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941) (citing Aetna Life Ins. Co. of Hartford

v. Haworth, 300 U.S. 227, 239-42 (1937)); Principal Life Ins. Co. v. Robinson, 394 F.3d 665,

671 (9th Cir. 2005) (discussing ripeness). 

The controversy must not only be “real and substantial,” but must also be susceptible

“of specific relief through a decree of a conclusive character” in the form of “an immediate

and definitive determination of the legal rights of the parties . . . upon the facts alleged.”

Haworth, 300 U.S. at 241 (distinguishing “an opinion advising what the law would be upon

a hypothetical state of facts”). “The litigant must clearly and specifically set forth facts

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sufficient to satisfy” the case or controversy requirement, Whitmore v. Arkansas, 495 U.S.

149, 155 (1990) (discussing standing), “for each form of relief sought.” Friends of the Earth,

Inc. v. Laidlaw Envtl. Serv., Inc., 528 U.S. 167, 185 (2000) (same). 

“So long as the court’s exercise of jurisdiction over the suit ‘passes constitutional and

statutory muster,’ the district court has discretion to determine whether maintaining

jurisdiction over the declaratory action would be appropriate.” Allstate Ins. Co. v. Herron,

634 F.3d 1101, 1107 (9th Cir. 2011) (quoting Gov’t Emp. Ins. Co. v. Dizol, 133 F.3d 1220,

1223 (9th Cir. 1998) (en banc)). The Ninth Circuit “allow[s] district courts broad discretion

as long as it furthers the Declaratory Judgment Act’s purpose of enhancing ‘judicial economy

and cooperative federalism.’ ” R.R. Street & Co. v. Transp. Ins. Co., 656 F.3d 966, 975 (9th

Cir. 2011) (quoting Dizol, 133 F.3d at 1224).

“When declaratory relief will not be effective in settling the controversy, the court

may decline to grant it.” Fed. R. Civ. P. 57 advisory committee notes (1937). If the sought

declaration neither “serve[s] a useful purpose in clarifying and settling the legal relations at

issue” nor “terminate[s] and afford[s] relief from the uncertainty, insecurity, and controversy

giving rise to the proceeding,” then “the court should decline to render” declaratory relief.

Delno v. Market St. Ry. Co., 124 F.2d 965, 968 (9th Cir. 1942) (quoting Edwin Borchard,

Declaratory Judgments 299 (2d ed. 1941)).

DISCUSSION

The parties to this action all issued one or more of three different types of CGL

policies that insured Del Webb. First are the parties that issued CGL policies directly to Del

Webb. Plaintiff/Counter-Defendant St. Paul Fire & Marine Insurance Company (“St. Paul”)

issued two CGL policies directly to Del Webb (Doc. 197 ¶ 29), which included primary and

excess insurance, that were subject to an “other insurance” provision stating in relevant part:

“We have no duty to defend . . . if your Basic Insurance, or any other insurance, has a duty

to defend . . . . We’ll assume the duty to defend . . . only if[] . . . your Basic Insurance, or any

other insurance, doesn’t cover” liability. (Doc. 221-3 at 130, 164.) Similarly, CrossClaimant/Cross-Defendant Zurich American Insurance Company (“Zurich”) and CrossCase 2:11-cv-01954-SMM Document 381 Filed 08/15/14 Page 5 of 13
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Defendant American Guarantee & Liability Insurance Company (“AGLIC”) both issued

primary CGL policies to Del Webb. (Docs. 197 ¶ 28; 203 ¶ 28.)

Next are the parties that issued primary CGL policies designating Del Webb as an

additional insured. First, “Tanner”—an entity of unknown origin, form, and

significance—was issued policies by St. Paul as well as by Plaintiffs/Counter-Defendants

Charter Oak Fire Insurance Company (“Charter Oak”), and Travelers Indemnity Company

of America (“Travelers”). (Doc. 197 ¶ 29-30.) As to the six subcontractors: Schuck & Sons,

Inc. was insured by both Travelers and Defendant/Counter-Claimant/Cross-Claimant/CrossDefendant Lexington Insurance Company (“LIC”). (Docs. 114 ¶ 24; 145 ¶ 24; 197 ¶ 30.)

Atrium Door & Window Company of Arizona, formerly known as Masterview Window

Company, LLC ( collectively “Atrium”) was insured by Travelers as well as Zurich. (Docs.

197 ¶¶ 24, 30; 203 ¶ 24.) Arizona State Plastering, Inc. was insured by Defendants/CounterClaimants/Cross-Claimants/Cross-Defendants American Home Insurance Company

(“AHAC”) and Commerce & Industry Insurance Company (“CIIC”), and Defendant/CrossDefendant Liberty Mutual Insurance Company (“LMIC”). (Docs. 114 ¶ 24; 145 ¶ 24; 197

¶ 24; 204 ¶ 11.) Design Drywall, Inc., was insured by Cross-Defendants Maryland Casualty

Company (“MCC”) and American Safety Indemnity Company (“ASIC”). (Docs. 197 ¶ 24;

203 ¶ 24; 206 ¶ 24.) Sharico Enterprises was insured by ASIC and Cross-Defendant Ohio

Casualty Insurance Company (“OCIC”). (Docs. 197 ¶ 24; 204 ¶ 11; 206 ¶ 24.) Last,

Diversified Roofing, Inc. was insured by LIC. (Docs. 114 ¶ 24; 145 ¶ 24.)

The third type of CGL policies provided excess, as opposed to primary, coverage.

Only one party, AGLIC, issued policies of this type, and only to one subcontractor, Atrium.

(Docs. 197 ¶ 24; 203 ¶ 24.) Each excess policy was attached to a primary policy issued by

Zurich to Atrium and named as insured: “Any person or organization included as an insured

in the underlying insurance.” (Doc. 221-1 at 118, 125, 155, 162, 196-97, 204.) The

underlying Zurich policies endorse as additional insureds: “All persons or organizations

where required by written contract.” (Doc. 221-3 at 23, 56, 63.) Like the other contracts

before the Court, the Atrium contracts state: “The [CGL] policy shall be endorsed to include

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Del Webb . . . as additional insureds, with respect to any claims losses, expenses, or other

costs arising out of this [][c]ontract, and shall be endorsed as primary coverage with respect

to any other insurance which may be carried by [Del] Webb.” (Doc. 221-1 at 5, 15, 25-26.)

The relations of the parties to one another are a complex patchwork of claims,

counterclaims, and crossclaims. First, St. Paul, Charter Oak, and Travelers (collectively

“Plaintiffs”) have claims against LIC, AHAC, and CIIC (collectively “AIG”) and also

LMIC. (Doc. 197.) Next, AIG has counterclaims against Plaintiffs, and crossclaims against

OCIC, Zurich, MCC, and AGLIC. (Docs. 153; 154; 155.) Last, Zurich has crossclaims

against AIG, OCIC, LMIC, and ASIC. (Doc. 120.) Consistent with the parties’ general

disregard for procedural rules and this Court’s orders (see Docs. 319; 328; 332; 353), neither

AIG nor Zurich renewed their respective counterclaims or crossclaims following Plaintiffs’

Second Amended Complaint (Doc. 197); AIG did not even bother to file an Answer.

The interests of the parties are relatively simple by comparison: three sets of parties

assert they are entitled to reimbursement for the costs of defending Del Webb. Specifically,

Plaintiffs, AIG, and Zurich (collectively “Claimants”) each allege that they contributed to

the defense of Del Webb and that they are entitled to partial or total reimbursement of their

contributions. (Compare Doc. 120 at 11, with Doc. 153 at 3-4, with Doc. 154 at 3-4, with

Doc. 155 at 4-5.) Claimants all seek the exact same three forms of declaratory relief: a

declaration of all parties’ defense duties; apportionment of the parties’ respective shares of

defense costs according to the doctrines of equitable contribution and/or equitable

subrogation; and a declaration that Claimants are entitled to reimbursement and an order

compelling such reimbursement. (Compare Doc. 120 at 11-13, with Doc. 153 at 3-8, with

Doc. 154 at 3-8, with Doc. 155 at 4-9, with Doc. 197 at 12-16). The Court begins with the

declaration of the all the parties’ duty to defend Del Webb.

The Duty to Defend

Insurers are generally “obligated to assume the defense of” an action brought against

an insured when the complaint, “upon its face[,] alleges facts which come within the

coverage of the liability policy.” Kepner v. W. Fire Ins. Co., 109 Ariz. 329, 331, 509 P.2d

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2 St. Paul’s acknowledgment is that liability could exist in the interstices of

subcontractor policy coverage. See Lennar Corp., 214 Ariz. at 261, 151 P.3d at 544.

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222, 224 (1973) (quoting C. T. Drechsler, Annotation, Allegations in third person’s action

against insured as determining liability insurer’s duty to defend, 50 A.L.R. 2d 458, § 3

(1956)). This “duty to defend arises at the earliest stages of litigation and generally exists

regardless of whether the insured is ultimately found liable.” Regal Homes, Inc. v. CNA Ins.,

217 Ariz. 159, 154, 171 P.3d 610, 615 (App. 2007) (quoting INA Ins. Co. of N. Am. v.

Valley Forge Ins. Co., 150 Ariz. 248, 255, 722 P.2d 975, 982 (App. 1986)). Absent language

to the contrary, “if any claim alleged in the complaint is within the policy’s coverage, the

insurer has a duty to defend the entire suit, because it is impossible to determine the basis

upon which the plaintiff will recover (if any) until the action is completed.” Lennar Corp. v.

Auto-Owners Ins. Co., 214 Ariz. 255, 261, 151 P.3d 538, 544 (App. 2007) (quoting W. Cas.

& Sur. Co. v. Int’l Spas of Ariz., Inc., 130 Ariz. 76, 79, 634 P.2d 3, 6 (App. 1981)).

However, the duty to defend may be obviated if uncontested “facts plainly take the case

outside policy coverage.” Transamerica Ins. Grp. v. Meere, 143 Ariz. 351, 360, 694 P.2d

181, 190 (1984) (citing Kepner, 109 Ariz. at 331, 509 P.2d at 224).

A declaration of the remaining parties defense duties serves a useful purpose in

clarifying the legal relations at issue as it removes uncertainty surrounding an immediate and

real dispute over the parties’ respective insurance obligations. By not successfully

challenging the duty to defend, the parties effectively acknowledged that the alleged facts

could establish liability under all of their respective primary policies.2

 Accordingly, the Court

hereby declares that all remaining parties share a duty to defend Del Webb under all their

respective policies according to the levels of coverage therein. One corollary of this

declaration is that each party also has the duty to indemnify for covered liabilities proven at

trial, see Colorado Cas. Ins. Co. v. Safety Control Co., Inc., 230 Ariz. 560, 568, 288 P.3d

764, 772 (App. 2012), subject to the policies’ terms, see Cal. Cas. Ins. Co. v. State Farm Mut.

Auto. Ins. Co., 185 Ariz. 165, 168-69, 913 P.2d 505, 508-09 (App. 1996).

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3

 While Claimants plead equitable contribution and equitable subrogation as

alternatives, the former is relief afforded by the latter. “Under the principle of equitable

subrogation,” a performing insurer is entitled to “compel contribution” from a

nonperforming insurer. Nat’l Indem. Co. v. St. Paul Ins. Cos., 150 Ariz. 458, 459, 724 P.2d

544, 545 (1986) (emphasis added); see Nucor Corp. v. Employers Ins. Co. of Wausau, 231

Ariz. 411, 420-21, 296 P.3d 74, 83-84 (App. 2012) (emphasis added) (explaining claim for

“equitable contribution” arises when shared duty is not equally borne by both insurers).

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Equitable Contribution3

The doctrine of equitable contribution is based on the principle that where two or

more insurers share the same duty to an insured and less than all of them perform their share

of that duty, then the performing insurers are entitled to contribution from the

underperforming insurers. Nat’l Indem. Co. v. St. Paul Ins. Cos., 150 Ariz. 458, 459, 724

P.2d 544, 545 (1986). The duty to defend is shared by and among insurers who issued

policies that cover an insured for the facts alleged in the complaint, even if the policies insure

against distinct risks. Nucor Corp. v. Employers Ins. Co. of Wausau, 231 Ariz. 411, 421, 296

P.3d 74, 84 (App. 2012) (quoting Certain Underwriters at Lloyd’s London & Excess Ins. Co.

v. Mass. Bonding & Ins. Co., 230 P.3d 103, 113 (Or. Ct. App. 2010)) (concluding right to

equitable contribution arises where insurers “had the same obligation to defend [the insured]”

but one insurer “discharged a disproportionate share of that obligation); Cont’l Cas. Co. v.

Signal Ins. Co., 119 Ariz. 234, 238, 580 P.2d 372, 376 (App. 1978) (“The duty to defend is

not synonymous with, nor determinative of the question of coverage.”). The remaining

parties share the duty to defend pursuant to the Court’s declaration that the allegations in the

complaint, if true, establish coverage under all the policies.

As to each party’s proportionate share of defense costs, the method of calculating

proration is left to the Court’s discretion. Nucor, 231 Ariz. at 422, 296 P.3d at 85. Arizona

favors the “policy limits” approach in which each policy’s pro rata share is equal to the

quotient obtained by dividing the policy’s limit by the sum of all applicable policy limits.

AMHS Ins. Co. v. Mut. Ins. Co. of Ariz., 258 F.3d 1090, 1102 (9th Cir. 2001) (affirming

district court’s application of Arizona’s “policy limits” approach), cited with approval in

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4

 The excess policy issued by St. Paul is a true excess policy and will be triggered

upon exhaustion of the underlying primary insurance that St. Paul issued to Del Webb.

5

 Although the underlying Atrium-Zurich policies were exhausted (Docs. 222 ¶ 27;

241 ¶ 27), they may be reinvigorated by reimbursement. If so, and AGLIC has contributed

to defense costs, then AGLIC is entitled to complete reimbursement. See Twin City Fire Ins.

Co. v. Burke, 204 Ariz. 251, 256, 63 P.3d 282, 286 (2003).

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Nucor, 231 Ariz. at 422, 296 P.3d at 85. The Court finds this approach suitable for

calculating the pro rata shares of defense costs in a case where, as here, several insurance

carriers each issued multiple polices insuring a single entity that was served with a complaint

alleging facts that triggered the defense duties under all the policies. A party’s pro rata share

of the costs of defense will generally equal the sum of policy limits for each primary policy

that party issued divided by the sum of policy limits for all primary policies issued. Assuming

the absence of indemnity costs, which would not be shared among those insuring against

different risks, see Granite State Ins. Co. v. Emp’rs Mut. Ins. Co., 125 Ariz. 275, 278, 609

P.2d 90, 93 (App. 1980), all the primary policies would exhaust simultaneously. 

This result is equitable with one exception. Atrium satisfied its contractual insurance

obligations by purchasing two policies instead of just one: primary CGL policies issued by

Zurich and excess CGL policies issued by AGLIC. Under Arizona law, “a specific excess

policy attaches upon the exhaustion of its underlying primary policy.” AMHS Ins. Co., 258

F.3d at 1099. Since the AGLIC policies are specific to the underlying Zurich policies and

were purchased to provide the same level and amount of coverage as all the other primary

CGL policies issued to subcontractors, the Court finds that AGLIC’s policies are excess only

with respect to the Atrium-Zurich policies.4

 In the interest of equity, the Atrium-Zurich and

Atrium-AGLIC policies will be concatenated so that the combined policy limits for each

Zurich-AGLIC policy pair will be treated as a single primary policy. As a result, AGLIC’s

duty to defend (and therefore contribute) will be, or was,5

 triggered when each concatenated

policy expends the limits of the underlying Zurich policy. Thereafter, AGLIC is responsible

for the concatenated policies’ pro rata share.

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A declaration of the method for calculating proration serves a useful purpose in

clarifying the parties’ legal relations at issue. Given that all the remaining parties share the

duty to defend Del Webb in the underlying action, calculating the parties’ policy limit

quotients should, as a practical matter, be a relatively straightforward exercise in addition and

division. Computing each party’s pro rata share involves multiplication; determination of

who has contributed more or less than their share involves subtraction. A party that has

contributed more than its pro rata share is entitled to reimbursement from parties that have

contributed less than their pro rata shares. The fact that some of the remaining parties have

settled with some but not all other remaining parties does not change this result because

settlement, in and of itself, does not preclude claims for equitable contribution. See Cal. Cas.

Ins. Co., 185 Ariz. at 170, 913 P.2d at 510. It would, in fact, be inequitable to deny

performing insurers contribution from underperforming insurers who settled to avoid having

to contribute their fair share of defense costs. See Nucor Corp., 231 Ariz. at 422, 296 P.3d

at 85 (citing Sharon Steel Corp. v. Aetna Cas. and Sur. Co., 931 P.2d 127, 139 (Utah 1997))

(ruling in context of nonperforming insurer settling with insured).

Further Declaratory Relief

 Given the declarations concerning defense duties and the method of calculating pro

rata shares, the relations at issue have been clarified and the underlying controversy has been

substantially quieted. The only remaining controversy is that some parties are entitled to

reimbursement from other parties. Toward that end, Claimants request the Court compute

the parties’ proportional shares, calculate the difference between proportional share and

amount contributed, and issue an order compelling reimbursement. The Court declines to

grant this relief.

The remaining requested declaration would not effectively settle the underlying

controversy, but only addresses some parties’ (Claimants’) entitlement to contribution for

performance of duties up to this point. The current ledger is a mere snapshot of what the

remaining parties owe or are owed, yet additional costs of defense (and indemnity) are

inevitably forthcoming. Thus, even if the Court exercised its discretion to render the

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remaining declaratory relief, the parties’ respective obligations and entitlement regarding

equitable contribution would not be settled. To the contrary, there will almost certainly be

additional disputes as the alignment of performing and underperforming insurers fluctuates.

Further, rulings in the underlying civil litigation are still materially affecting the

parties respective duties to defend. Depending on the progression of the trial and evitable

appeals, further declarations run the risk of binding a party in a manner inconsistent with that

party’s true obligation. For example, the settlement agreement between two sets of

Claimants, one of which is no longer a party to the action, was delayed “due to a ruling in

the [underlying] lawsuit that affects . . . participation in Del Webb’s defense.” (Doc. 364 at

2.) The Court is especially wary about rendering a declaration that conflicts with a state court

ruling. See R.R. Street & Co., 656 F.3d at 975.

It may be argued that the Court should stay the proceedings until the underlying

actions reach sufficient finality, or alternatively, that the Court should issue the requested

relief, maintain the action, and intermittently issue orders compelling the parties to pay one

another while the underlying civil suit winds to a close and finds its way up and down the

appeals process before reaching finality. Both arguments rest on the same premise: that one

or more parties will deny a now certain duty to contribute a calculable sum toward the costs

of defense. The mere possibility that a party might not perform a previously uncertain duty,

without more, is insufficient to invoke the jurisdiction of federal courts. The Court certainly

would not maintain a declaratory judgment action premised on possibility.

The Court finds that the declarations made herein clarify the parties’ relations and

settle the underlying controversy to the greatest extent practicable given the circumstances.

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Accordingly,

IT IS HEREBY ORDERED declaring that St. Paul, Charter Oak, Travelers,

Zurich, MCC, AGLIC, AHAC, CIIC, LIC, LMIC, OCIC, and ASIC, all have a duty to

defend Del Webb as described in this Order.

IT IS FURTHER ORDERED declaring that the proportional shares of defense costs

for St. Paul, Charter Oak, Travelers, Zurich, MCC, AGLIC, AHAC, CIIC, LIC, LMIC,

OCIC, and ASIC are equal to their respective policy limits quotients as described in this

Order.

IT IS FURTHER ORDERED that the Clerk of Court terminate the case.

DATED this 15th day of August, 2014.

Case 2:11-cv-01954-SMM Document 381 Filed 08/15/14 Page 13 of 13