United States District Court, D. Montana, Great Falls Division
ORDER DENYING MOTION TO DISMISS COUNTERCLAIM
Johnston United States Magistrate Judge.
is Plaintiff Park Plaza Condominium Association's
(“Park Plaza”) Motion to Dismiss Defendant's
Counterclaim. (Doc. 5). Park Plaza argues this action should
be dismissed because Defendants Travelers Indemnity Company
of America and Phoenix Insurance Company's (collectively
“Travelers”) counterclaim seeks declaratory
judgment over the same relief as does its Answer and
affirmative defenses, and that the Court does not have
jurisdiction when the declaratory judgment is identical to
the underlying complaint and subject to the same resolution.
Additionally, Park Plaza argues that Travelers is in fact
impermissibly seeking an advisory opinion. Finally, Park
Plaza argues that the counterclaim should be dismissed for
failure to join necessary parties under Fed.R.Civ.P. 19. The
motion will be denied.
trial court has discretion in deciding whether to grant
declaratory relief. Bilbrey by Bilbrey v. Brown, 738
F.2d 1462, 1470 (9th Cir. 1984) (citing Doe v.
Gallinot, 657 F.2d 1017, 1024 (9th Cir. 1981)).
“The existence of another adequate remedy does not
preclude a declaratory judgment that is otherwise
appropriate.” Fed.R.Civ.P. 57. Moreover, 28 U.S.C.
§ 2201(a) states that “[i]n a case of actual
controversy within its jurisdiction . . . any court . . . may
declare the rights and other legal relations of any
interested party seeking such declaration, whether or not
further relief is or could be sought.”
there are two criteria for determining whether declaratory
relief is appropriate: “(1) when the judgment will
serve a useful purpose in clarifying and settling the legal
relations in issue, and 2) when it will terminate and afford
relief from the uncertainty, insecurity, and controversy
giving rise to the proceeding.” Bilbrey, 738
F.2d at 1470 (quoting McGraw-Edison Co. v. Preformed Line
Products Co., 362 F.2d 339, 342 (9th Cir. 1966),
cert. denied, 385 U.S. 919 (1966)).
Plaza argues that Travelers may not seek declaratory relief
that is identical to the claim presented in the Complaint and
Answer that is properly before the Court. (Doc. 6 at 2-3). It
argues that the Court does not have jurisdiction to
adjudicate a claim under Montana law such as this, and should
exercise its discretion and dismiss the counterclaim as
“total surplusage” that “provides no relief
to anyone” and amounts to an “advisory
opinion.” (Doc. 14 at 3-4).
counterclaim, Travelers alleges that it is entitled to
declaratory relief pursuant to Mont. Code Ann. §
27-8-101 et seq. because “[t]here is currently
a dispute as to whether there is coverage under [the policy]
for the claim [Park Plaza] has submitted for damage . . . and
if so, the extent to which coverage is available.”
(Doc. 2 at 13, ¶¶ 5-6). Travelers argues that it is
seeking different relief than the relief it would receive
through the resolution of the Complaint and its Answer.
Through [its] Answer and affirmative defenses, [Travelers is]
disputing the claims alleged by Park Plaza and setting forth
[its] defenses against those claims by stating the basis for
disputing those claims. In [its] Counterclaim, by contrast,
[Travelers is] asking this Court fo the affirmative relief of
a declaration of the rights of the parties by analyzing the
rights of the parties by analyzing the insurance policy
language at issue and applying such language to the available
(Doc. 12 at 3). Therefore, Travelers argues that the Court
has jurisdiction to grant declaratory relief and that such
declaratory relief will properly provide the parties with a
resolution of the coverage dispute in this case.
stated above, the Court has discretion to decide whether to
grant declaratory judgment. It is not disputed that the Court
has jurisdiction over this case under 28 U.S.C. § 1332.
Moreover, 28 U.S.C. § 2201 provides that a court can
grant declaratory relief “whether or not further relief
is or could be sought.” As such, the Court will
exercise its discretion and authority to allow Travelers to
seek declaratory relief in this case.
the Court is not precluded from making declaratory judgment
in this case because the coverage dispute is an actual
controversy. A Court can only grant declaratory relief in
“a case of an actual controversy”; it may not
issue an “advisory opinion.” Cutaiar v.
Marshall, 590 F.2d 523, 527 (3d Cir. 1979); see
28 U.S.C. § 2201. “It is well established that
what makes a declaratory judgment action ‘a proper
judicial resolution of a case or controversy rather than an
advisory opinion-is [ ] the settling of some dispute which
affects the behavior of the defendant toward the
plaintiff.' ” Cox v. Phelps Dodge Corp.,
43 F.3d 1345, 1348 (10th Cir. 1994), superseded on other
grounds by Walker v. United Parcel Serv., Inc., 240 F.3d
1268, 1278 (10th Cir. 2001) (quoting Hewitt v.
Helms, 482 U.S. 755, 761 (1987)). A declaratory judgment
in this case would determine the coverage dispute between the
parties, and as such, there is a case or controversy at issue
and granting declaratory judgment would not be an advisory
the admitted failure to join necessary parties is not fatal
to Travelers' counterclaim. The Court's scheduling
allows the parties to freely amend their pleadings until
January 12, 2018. It is anticipated that Park Plaza will
amend its pleadings to include the necessary parties, and
Travelers will be allowed the same opportunity up until the
scheduled date. Therefore, the Court will not dismiss the
counterclaim for failure to join necessary parties at this
based on the foregoing, IT IS HEREBY ORDERED
that Plaintiff Park Plaza's Motion to Dismiss