Hartford Casualty Insurance v. Trinity Universal Insurance (158 F. Supp. 3d 1183, 2015)

United States District Court for the District of New Mexico 2015-07-28

Citations

Full opinion text

MEMORANDUM OPINION AND ORDER

MARTHA VÁZQUEZ, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on the Second Amended Complaint, by Mountain States for Cross-Claims Against the Trinity and Zurich Parties & Third-Party Complaint Against Colorado Casualty & John Does I-XIX (“Second Amended Complaint”) [Doc. 197], Trinity’s Motion for Partial Summary Judgment Concerning Mountain States’ Third Party Complaint (“Trinity’s Motion for Summary Judgment”) [Doc. 163], and Zurich American Insurance Company’s (“Zurich”) Motion and Memorandum for Partial Summary Judgment Re: Mountain States Mutual Casualty Company’s Claims Regarding Okland (“Zurich’s Motion for Summary Judgment”) [Doc. 193]. The Court having considered the motions, briefs, and relevant law, finds that the Court has subject matter jurisdiction over Mountain States’ claims in its Second Amended Complaint, that Trinity’s Motion for Summary Judgment is not well taken and will be denied, and that Zurich’s Motion for Summary Judgment is not well taken and will be denied.

BACKGROUND

This insurance coverage lawsuit arises out of an underlying action filed in the District Court of La Plata County, Colorado (“Underlying Action”), in which the Rivergate Lofts Condominium Owners Association asserted various construction defect claims against Rivergate Loft Partners, LLC (“RLP”), the owner and developer of a multi-use condominium development located in Durango, Colorado (the “Project”), Okland Construction Company, Inc. (“Okland”), one of the general contractors for the Project, and various other defendants. Plaintiff Hartford, which issued commercial general liability policies to RLP, filed this coverage action seeking to recover from Trinity and Zurich (“Defendants”) approximately $1.6 million in defense and $150,000 in indemnity costs that Hartford incurred defending and settling the Underlying Action on RLP’s behalf.

Hartford alleges that Beaty Construction, Inc. (“Beaty”), a subcontractor which did masonry work at the Project, entered into certain contracts with Okland, which obligated Beaty to name RLP as an additional insured with respect to Beaty’s work on the Project. Trinity and Zurich insured Beaty. The insurance policies issued by Trinity and Zurich contain automatic additional insureds provisions, which Hartford contends automatically extended coverage under the policies to RLP. Hartford alleges that Trinity and Zurich owe.it the defense costs it incurred and the indemnity it paid on RLP’s behalf to defend and settle the Underlying Action. •

Zurich and Trinity filed third-party complaints against Mountain States Mutual Casualty Company (“Mountain States”) and Twin City Fire Insurance Company. Mountain States insured San Juan Insulation and Drywall, Inc. (“San Juan”) and Vendóla Plumbing and Heating, Inc. (“Vendóla”). Defendants allege that Mountain States’ policies covering San Juan and Vendóla give rise to insurance coverage for RLP and Okland as additional insureds in the Underlying Action. Jn their third-party complaints, Defendants allege that Mountain States had a duty to defend RLP in the Underlying Action under the policies they issued to San Juan and Vendóla and that Mountain States failed to do so. Zurich and Trinity further allege that to the extent they are obligated to reimburse Hartford for any sums, Mountain States is likewise obligated to pay.

Mountain States thereafter filed third-party claims against Trinity and Zurich in its First Amended Complaint for Cross-Claims Against the Trinity and Zurich Parties and Third' Party Complaint Against John Does I-XX (“First Amended Complaint”) [Doc. 161]. In support of its third-party claims against Trinity and Zurich, Mountain States alleges, among other things, that Defendants had a duty to defend RLP and Okland in the Underlying Action and that Defendants are obligated to bear a share of the costs to defend and/or indemnify RLP and Okland in the Underlying Action. Mountain States also alleges that it paid more than its equitable share of-Okland’s defense costs when it settled a “preceding sister action” — herein referred to as the “Travelers Action”— that was a “derivative lawsuit of the Underlying'Action asserted against Mountain States by the insurer [Travelers] of Ok-land Tor repayment-of defense costs, and fees in the Underlying Action.” [Doc. 161 at 5].

Mountain States thereafter amended its First Amended Complaint to add third-party claims against Colorado Casualty Insurance Company (“Colorado Casualty”) and John Does I-XIX. [Doc. 197]. In this Second Amended Complaint, Mountain States alleges the same claims against Colorado Casualty and the John Doe defendants as it alleges against Trinity and Zurich. [Id,.].

In the Travelers Action, Travelers sued Mountain' States,' Trinity, Zurich, and State Farm Fire and Casualty Company seeking the relief of equitable contribution from these deféndánt-insurers for 'defense fees and costs that Travelers paid on behalf of its insured Okland in the Underlying Action. [Doc.' 163-4 at 2]. Travelers alleged that the defending insurers had a duty to defend Okland because of Okland’s status as an additional insured under the relevant policies issued by the defendant-insurers. [Id.]. Travelers and Zurich reached a séttlement in the Travelers Action and Travelers’ claims against Zurich were dismissed with prejudice on June 21, 2013. [Doc. 193-1]. Travelers also reached a settlement with Trinity and a settlement with Mountain States, and the court dismissed with prejudice Travelers’ claims against these defendants in October 2013. [Doc. 163-16]. None of the defendants in the Travelers Action asserted crossclaims for contribution against any of their co-defendants. [Doc. 163-5 at 10; Doc. 193-1 at 2; Doc. 163-16 at 2].

On November 6, 2014, Trinity filed its Motion for Summary Judgment, asking the Court to award partial summary judgment in Trinity’s favor. [Doc. 163]. Specifically, Trinity asked the Court to dismiss with prejudice Mountain States’ “claims for relief ... related to Mountain States’ and Trinity’s respective obligations for Ok-land’s defense costs incurred in the Underlying Action, and Mountain Statesf] claims for relief seeking reimbursement from Trinity for Okland’s defense costs incurred in the Underlying Action.” [Doc. 163-1 at 25].

On November 25, 2014, Zurich filed its Motion for Summary Judgment, asking the Court to award partial summary judgment in its favor. [Doc. 193]. Specifically, Zurich asks the Court to dismiss with prejudice Mountain States’ claims seeking allocation of Okland’s defense costs and reimbursement from Zurich of those defense costs. [Id. at 18].

On May 4, 2014, the Court issued an order requesting additional briefing on Trinity’s Motion for Summary Judgment and Zurich’s Motion for Summary Judgment (“May 4, 2014, Order”) [Doc. 314]. The Court’s order explained that Zurich, in support of its Motion for Summary Judgment, “contends that Mountain States’ claims against it are crossclaims governed by Federal Rule of Civil Procedure 13(g), and that the claims are improper because they do not arise out of the same transaction or occurrence that is the subject matter of the original action or of a counterclaim as required by Rule 13(g).” [Id. at 2 (citation omitted) ]. The Court further noted that, in support of Trinity’s Motion for Summary Judgment, “Trinity agrees with Zurich that Mountain States’ claims are improper but, unlike Zurich, Trinity does not rely upon Rule 13(g) in support of this contention,” but “[r]ather ... relies upon Rule 14(a)(3), which, in the context of defining when a defending party may bring in a third party, sets forth the claims a plaintiff may assert against a third-party defendant,” and which “contains the same threshold standard as that in Rule 13(g): ie., both Rules require the claims they permit to arise out of the transaction or occurrence that is the subject matter of the original claims in this action.” [Id. (citations omitted) ]. The Court requested “additional briefing with respect to whether the Federal Rules upon which the parties rely [to support their motions for summary judgment] are applicable to Mountain States’ claims against Trinity and Zurich.” [Id. at 3].

On May 4, 2014, the Court issued a sua sponte order on Mountain States’ Second Amended Complaint for Cross-Claims Against the Trinity and Zurich Parties & Third-Party Complaint Against Colorado Casualty & John Does I-XIX (“Sua Sponte Order”). [Doc. 315]. The Court requested briefing on the question whether Mountain States’ claims against Colorado Casualty and the John Doe defendants are proper under Federal Rule of Civil Procedure 14(a). [Id at 2]. In response to the Court’s Sua Sponte Order, Colorado Casualty argues that “by naming ‘John Doe’ Defendants, Mountain States cannot establish the diversity jurisdiction required in order for the Court to adjudicate the claims it seeks to pursue through its Second Amended Third-Party Complaint.” [Doc. 330 at 3].

STANDARD

I. Subject Matter Jurisdiction: Diversity of Citizenship.

“Federal courts are courts of limited jurisdiction; they are empowered to hear only those cases authorized and defined in the Constitution which have been entrusted to them under a jurisdictional grant by Congress.” Henry v. Office of Thrift Supervision, 43 F.3d 507, 511 (10th Cir.1994) (citations omitted). One basis of federal subject matter jurisdiction is diversity jurisdiction under 28 U.S.C. § 1332(a). Section 1332(a) diversity jurisdiction requires complete diversity among the parties and that “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a).

District courts have an independent duty to examine whether they have subject matter jurisdiction over cases and may do so sua sponte. See, e.g., U.S. ex rel. King v. Hillcvest Health Ctr., Inc., 264 F.3d 1271, 1281-82 (10th Cir.2001), cert. denied, 535 U.S. 905, 122 S.Ct. 1205, 152 L.Ed.2d 143 (2002); Image Software, Inc. v. Reynolds & Reynolds Co., 459 F.3d 1044, 1048 (10th Cir.2006). “If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 12(h)(3).

II. Summary Judgment: Federal Rule of Civil Procedure 56.

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); accord Jones v. Kodak Med. Assistance Plan, 169 F.3d 1287, 1290 (10th Cir.1999) (quoting Fed. R.Civ.P.- 56(c)). Under Rule 56(c), “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rather, “[ojnly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id. at 248, 106 S.Ct. 2505.

Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Shapolia v. Los Alamos Nat’l Lab., 992 F.2d 1033, 1036 (10th Cir.1993) (citations omitted). The moving party need not negate the nonmovant’s claim, but rather must show “that there is an absence of evidence to support the nonmoving party’s case.” Celotex v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party meets its initial burden, the nonmoving party must show that genuine issues remain for trial “as to those dispositive matters for which it carries the burden of proof.” Applied Genetics Int’l Inc. v. First Affiliated Secs., Inc., 912 F.2d 1238, 1241 (10th Cir.1990) (citation omitted).

The nonmoving party cannot rely upon conclusory allegations or contentions of counsel to defeat summary judgment, see Pueblo Neighborhood Health Ctrs., Inc. v. Losavio, 847 F.2d 642, 649 (10th Cir.1988), but rather must “go beyond the pleadings and by [its] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial,’ ” Celotex, 477 U.S. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(e)). If the responding party fails to properly address the movant’s assertion of fact as required by Rule 56(c), a district court may “grant summary judgment if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it.” Fed.R.Civ.P. 56(e)(3). Upon a motion for summary judgment, a district court “must view the facts in the light most favorable to the nonmovant and allow the nonmovant the benefit of all reasonable inferences to be drawn from the evidence.” Kaus v. Standard Ins. Co., 985 F.Supp. 1277, 1281 (D.Kan.1997), aff'd, 162 F.3d 1173 (10th Cir.1998).

DISCUSSION

The Court’s subject matter jurisdiction over Mountain States’ Second Amended Complaint comes before the Court sua sponte, and the remaining issues addressed herein come before the Court on Defendants’ motions for summary-judgment. Consistent with the Court’s affirmative obligation to examine its jurisdiction over the claims before it and to dismiss any action where subject matter jurisdiction is lacking, the Court first determines whether it has subject matter jurisdiction over the claims asserted in Mountain States’ Second Amended Complaint. Thereafter, the Court considers the merits of Defendants’ motions for summary judgment.

For the reasons set forth herein, the Court holds that it has subject matter jurisdiction over . Mountain States’ claims in the Second Amended Complaint, Having so held, the Court next holds that that Trinity and Zurich have failed to establish that they are entitled to judgment as a matter of law on Mountain States’ claims for pro rata allocation of Okland’s defense costs and for reimbursement from Trinity and Zurich for those defense costs. The Court rejects Defendants’ contentions that Mountain States’ claims are subject to dismissal as a matter of 'law because the claims violate the Federal Rulés of Civil Procedure, because they are barred by the doctrines of claim or issue preclusion, and because they are barred by the doctrines of waiver, estoppel, and/or laches.

I. The Court has. Subject Matter Jurisdiction over Mountain States’ Second Amended Complaint.

In its response to the Court’s May 4, 2015, Sua Sponte Order requesting briefing on the question whether Mountain States’ claims against Colorado • Casualty and the John Doe defendants are proper under Federal Rule of Civil Procedure 14(a), Colorado Casualty argues that “by naming ‘John Doe’ Defendants, Mountain States cannot establish the diversity jurisdiction required in order for the Court to adjudicate the claims it seeks to pursue through its Second Amended Third-Party Complaint,” [Doc. 330 at 3]. According to Colorado Casualty, “Numerous district courts in the 10th Circuit have concluded that where, as here, the sole basis for jurisdiction over claims filed by a plaintiff in federal court is diversity, the decision to name John Doe defendants prevents the plaintiff from meeting its burden to establish diversity jurisdiction.” [Id. at 14-15 (citing United Fin. Cas. Co. v. Lapp, No. 12-CV-00432-MSK-MEH, 2013 WL 1191392, at *2 (D.Colo. Mar. 21, 2013) (“[T]his Court is inclined to defer to the ‘general rule’ that ‘the diverse citizenship of the fictitious defendants must be established by the plaintiff in order to continue a federal court action.’”) (citing Wright, Miller et al., Federal Practice & Procedure, § 3642 (2009)); Van De Grift v. Higgins, 757 F.Supp.2d 1139, 1141 (D.Utah 2010) (explaining that plaintiffs’ mere statement .identifying “John Does 1-20 and any and all other successor entities to Lehman Brothers” said nothing of citizenship and holding that plaintiffs therefore failed to establish diversity)]. Colorado Casualty further argues that “[cjourts in other Circuits have reached this same conclusion.” [Id. at 15 (citing Howell v. Tribune Entm’t Co., 106 F.3d 215, 218 (7th Cir.1997). (holding that “because the existence of diversity jurisdiction cannot be determined without knowledge of every defendant’s place of citizenship, ‘John Doe’ defendants are not permitted in federal diversity suits”)) (additional citations omitted)]. Colorado Casualty contends that “[t]his Court’s exercise of jurisdiction, under circumstances where Mountain States has chosen to name John Doe Defendants[,] ... is inconsistent with the jurisdictional requirements of 28 U.S.C. § 1332,” and therefore concludes that the Court should dismiss Mountain States’ claims for lack of subject matter jurisdiction. [Id.].

The Court is not persuaded. Admittedly, because diversity jurisdiction must be proved by the plaintiff rather than assumed as a default, see Penteco Corp. Ltd. v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir.1991) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)), this Court cannot presume that the John Doe defendants’ citizenship is diverse. See, e.g., Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3642, pp. 144-46 (2d ed. 1985) (“The general rule, reflected in the citations in the note below, has been that, on challenge, the diverse citizenship of the- fictitious defendants must be established by the plaintiff in order to -continue a federal court action.”); Moore v. General Motors Pension Plans, 91 F.3d 848, 850 (7th Cir.1996) (explaining that “[bjecause diversity jurisdiction must be proved by the. plaintiff rather than assumed as a default, .. this court cannot presume that Does 1-10 are diverse with respect to the plaintiff’). Mountain States alleges, however, in its complaint that “[u]pon information and belief, Third-Party John Doe insurer Defendants I-XX are not citizens of New Mexico, Colorado, Texas or New York, the states of citizenship for the existing parties in the case at bar.” [Doc. 161 at 3, ¶ 10]. This case, therefore, is distinguishable from cases requiring dismissal for failure “to make [a] good-faith allegation of citizenship of sub-' stantive ‘John Doe’ defendants, as required to establish diversity jurisdiction,” De Grift, 757 F.Supp.2d at 1141 (holding that where “plaintiffs simply named as defendants ‘John Does 1-20 and any and all other successor entities to’ the corporation,but said nothing of these defendants’ citizenship,” plaintiffs failed to establish diversity of citizenship). Thus, the Court holds that it has diversity jurisdiction over Mountain States’ Second Amended Complaint even though Mountain States has pled claims against John Doe defendants.

The Court also holds that it has diversity jurisdiction over Mountain States claims on the second ground that the John Doe defendants are nominal parties. If named John Doe defendants are nominal parties, a district court may disregard them for purposes of federal diversity jurisdiction. See, e.g., Rockwell Int’l Credit Corp. v. U.S. Aircraft Ins. Group, 823 F.2d 302, 304 (9th Cir.1987), overruled on other grounds by Partington v. Gedan, 923 F.2d 686 (9th Cir.1991); U.S. Fire Ins. Co., Inc. v. Charter Financial Group, Inc., 851 F.2d 957, 959 n. 3 (7th Cir.1988). Generally speaking, John Doe defendants are considered nominal when they are included in the complaint “in the event that during discovery [a plaintiff] identifie[s] any additional defendants he wishe[s] to add to the suit.” Moore, 91 F.3d at 850. On the other hand, John Doe defendants are not nominal if they are included because “the plaintiff knows that there are specific additional defendants he wishes to sue, but is simply uncertain as to their names.” Id.

To the extent Defendants contend that either State Farm or Travelers are the John Doe defendants Mountain States wishes to name, the Court is not persuaded that these parties constitute “specific additional defendants” that Mountain States “wishes to sue, but is simply uncertain as to their names.” Id. Mountain States is aware of the identities of Travelers and State Farm and aware, by virtue of the Travelers Action, of their potential coverage obligations. Thus, the Court declines to construe Mountain States’ claims against the John Doe defendants as marking a placeholder for the addition of Travelers or State Farm to this litigation. Rather, the Court construes the claims against the John Doe defendants as placeholders “in the event that during discovery [Mountain States] identified] any additional defendants [it] wishe[s] to add to the suit.” Id. As such, the Court concludes that the John Doe defendants constitute mere nominal parties and that their inclusion does not destroy diversity jurisdiction.

Finally, the Court notes that even if the John Doe defendants were not nominal parties and even if the complaint did not contain a good faith allegation of diverse citizenship, the Court nonetheless would not be inclined to dismiss Mountain States’ claims against Colorado Casualty. Federal Rule of Civil Procedure 21 provides that “[m]isjoinder of parties is not a ground for dismissing an action,” and that “[o]n motion or on its own, the court may at any time, on just terms, add or drop a party.” Fed.R.Civ.P. 21; see also Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832, 109 S.Ct. 2218, 104 L.Ed.2d 893 (1989) (explaining that “it is well settled that Rule 21 invests district courts with authority to allow a dispensable nondiverse party to be dropped at any time, even after judgment has been rendered”); Tuck v. United Servs. Auto. Ass’n, 859 F.2d 842, 845-46 (10th Cir.1988) (“[I]t is well-settled that nondiverse parties may be dismissed in order to preserve diversity jurisdiction.”) (citations omitted), cert. denied, 489 U.S. 1080, 109 S.Ct. 1534, 103 L.Ed.2d 839 (1989). Thus, under this rule, the Court would not dismiss Mountain States’ claims but rather either would issue an order to show cause why Mountain States’ Second Amended Complaint should not be dismissed for lack of subject matter jurisdiction under 28 U.S.C. Section 1332, or would allow Mountain States to amend its complaint to eliminate the John Doe defendants. See, e.g., Van De Grift, 757 F.Supp.2d at 1141 (ordering the plaintiffs to show cause why their complaint should not be dismissed for lack of subject matter jurisdiction under Section 1332 or, alternatively, to amend their complaint or voluntarily withdraw their action from the federal docket).

For all of the foregoing reasons, the Court concludes that it has subject matter jurisdiction over Mountain States’ claims. Therefore, having held that it has the power to hear Mountain States’ claims, the Court next turns to Defendants’ procedural and substantive arguments in favor of summary judgment.

II. Trinity and Zurich are not Entitled to Summary Judgment on Mountain States’ Claims on the Ground that Mountain States’ Claims Violate the Federal Rules of Civil Procedure.

Trinity and Zurich argue that they are entitled to summary judgment on Mountain States’ claims against them on the ground that Mountain States’ claims violate the Federal Rules of Civil Procedure. The Court is not persuaded. First, as discussed herein, even if the Court were to conclude that Mountain States’ claims violate the Federal Rules, a violation of the Court’s procedural rules is not a basis for granting summary judgment. Summary judgment is a vehicle for delivering a substantive ruling as a matter of law on a plaintiffs claims, and Defendants provide no authority for the proposition that a violation of the rules of procedure defining which crossclaims are permissible or when dismissal for failure to join an indispensable party is required can result in the dismissal with prejudice Mountain States’ claims pursuant to Rule 56. Second, as described herein, although Defendants have argued that Mountain States’ claims violate Rules 14(a)(3), 13(g), and 19, Defendants have failed to demonstrate that any of those rules govern Mountain States’ claims. Thus, for these reasons, the Court rejects Defendants’ arguments in favor of summary judgment.

A. A Violation of Federal Rules of Civil Procedure IS, Ik, or 19 is not a Basis for Summary Judgment.

Trinity and Zurich both contend that they are entitled to summary judgment on Mountain States’ claims because Mountain States filed its claims in violation of Federal Rules of Civil Procedure 13, 14, and 19. This argument lacks merit. The appropriate remedy for violation of the Court’s rules of procedure is not judgment as a matter of law (¿a, dismissal with prejudice) pursuant to Rule 56, but rather is dismissal without prejudice pursuant to Rule 12(b). Summary judgment is vehicle for granting judgment on the merits of a claim and it is only appropriate when a movant shows that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Defendants cannot demonstrate that they are entitled to judgment as a matter of law on the merits of Mountain States’ substantive claims for equitable contribution and reimbursement by pointing to violations of this Court’s rules of procedure. The Court therefore denies Defendants’ motions for summary judgment on this ground.

Defendants claim that they properly seek summary judgment pursuant to Rule 56 because Rule 12(h)(2) and subsections (c) and (d) of Rule 12 authorize them to bring a motion for summary judgment for failure to comply with Rules 14(a)(3) and 13(g). Rule 12(h)(2) provides in relevant part that “[fjailure to state a claim upon which relief can be granted, to join a person required by Rule 19(b), or to state a legal defense to a claim may be raised: (A) in any pleading allowed or ordered under Rule 7(a); (B) by a motion under Rule 12(c); or (C) at trial.” Fed.R.Civ.P. 12(h)(2). Trinity relies upon Rule 12(h)(2)’s language that “failure to state a claim upon which relief can be granted” may be raised by “motion under Rule 12(c) and argues that under Rule 12(d), which provides that “if on a motion under 12(b)(6), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56,” it was authorized to present its motion as one for summary judgment. [Doc. 328 at 4 (citing Fed.R.Civ.P. 12(d), (h)) ]. Zurich similarly contends that under Rule 12(h)(2), a party can raise the defense of failure to join a party via motion, and then argues that “when made via motion, if the motion considers facts outside the pleadings, the court must treat the motion as a motion for summary judgment.” [Doc. 327 at 4 (citing Fed.R.Civ.P. 12(d)]. The Court is not persuaded by either of these arguments.

To support their argument that Rule 56 is the proper vehicle by which to raise a challenge to Mountain States’ claims under Rules 13,14, and 19, Defendants rely upon Rules 12(h)(2) and 12(d). Defendants reason that Rule 12(h)(2) provides that “failure to state a claim upon which relief can be granted” may be raised by “motion under Rule 12(c)” and that Rule 42(d) provides that “[i]f on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings.are presented to and not excluded by .the court, the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(h)(2) and (d). [Doc. 328 at 4]. Defendants’ reasoning is flawed.

■First and foremost, Defendants’ cannot rely upon Rule 12(d) to justify their decision to. bring a procedural challenge to Mountain: States’ claims by way of .a Rule 56 motion because Defendants did not move for judgment on the pleadings, and, even if Defendants had so moved, it would be the Court’s prerogative,. not a party’s, to consider matters outside of the pleadings and thereby convert a Rule 12(c) motion for judgment on the pleadings into a Rule 56 motion for summary judgment. This is because, by its terms, Rule 12(d) applies only when a movant brings a Rule 12(b)(6) and Rule 12(c) motion, and Rule 12(d) authorizes only the Court, and not a party, to convert the motion into one for summary judgment.

Furthermore, Defendants cannot rely upon Rule 12(d) to authorize their procedural challenge to Mountain States’ claims, because Rule 12(d) authorizes conversion only when a party brings a Rule 12(c) motion challenging the substantive mei'its of claims and defenses raised in the pleadings and not when a. party brings a Rule 12(c) motion raising procedural defenses enumerated in Rule 12(b). See Charles A. Wright, Arthur R. Miller, and Mary Kay Kane,. Federal ■ Practice & Procedure § 1367 (3d ed.). While Rule 12(c) most commonly serves as a vehicle for disposing of cases on the merits when there is no dispute in the pleadings, Rule 12(c) also serves as a vehicle for launching Rule 12(b) procedural challenges. See id. (explaining that “Rule 12(c) judgment on the pleadings procedure primarily is addressed to the ,.. function of disposing of cases on the basis of the underlying substantive merits of the parties’ claims and defenses as they are revealed in the formal pleadings,” but, consistent with the common law in which the rule has its historical roots, it also “may be employed by the defendant as a vehicle for raising several of the defenses enumerated in Rule 12(b) after the close of the pleadings”). When a Rule 12(c) motion is being used for this latter purpose — i.e., as a vehicle to raise procedural challenges to the pleadings — a district court “applfies] the same standards for granting the appropriate relief or denying the motion as it would have employed had the motion been brought prior to the defendant’s answer under Rules 12(b)(1), (6), or (7) or under Rule 12(f).” Id. (“As has been indicated by a considerable number of federal courts, ... if any of these procedural defects are asserted upon a Rule 12(c) motion, presumably the district court will apply the same standards for granting the appropriate relief or denying the motion as it would have employed had the motion been brought prior to the defendant’s answer under Rules 12(b)(1), (6), or (7) or under Rule 12(f).”). “The mere fact that these procedural defects . are raised in the guise of a Rule 12(c) motion should not affect the manner by which the court determines what essentially are Rule 12(b) matters.” Id. (explaining in this procedural “context, Rule 12(c) is merely serving as an auxiliary device that enables a party to assert certain procedural defenses after the close of the pleadings,” and, that, for example, “if a party raises an issue as to the court’s subject matter jurisdiction on a motion for a judgment on the pleadings, the district judge will treat the motion as if it had been brought under Rule 12(b)(1)”).

Consistent with the foregoing distinctions regarding the standards governing Rule 12(c) substantive and procedural challenges, the Court concludes that even if Defendants had brought motions pursuant to Rule 12(c), this Court would not have applied Rule 12(d) to convert their motions to motions for summary judgment, because Defendants’ objections to Mountain States’ claims under Rules 13, 14, and 19 are not challenges to the merits of Mountain States’ equitable contribution and reimbursement claims, but rather are challenges to the procedural sufficiency of Mountain States’ claims. Thus, the appropriate standard by which to rule on Defendants’ procedural objections to Mountain States’ claims in its First Amended Complaint would not be Rule 56 but rather the same standard for ruling upon other procedural objections brought under Rule 12(b) or 12(f). See id.

’ Thus, for foregoing reasons, the Court holds that a motion for summary judgment is not the appropriate vehicle to challenge Mountain States’ alleged violation of Rules, 13, 14, or 19. Accordingly, the Court dénies Defendants’ motions for summary judgment to the extent they are premised upon a purported violation of the Federal Rules.

B. Mountain States’ Claims Do Not Violate Rules IS 14, or 19 of the Federal Rules of Civil Procedure.

In addition to denying Defendants’ motions for summary judgment on the ground that a procedural violation of this Court’s rulés cannot support the entry of judgment as a matter of law on the substance of Mountain States’ claims, the Court also denies the motions on the ground that Mountain States’ claims do not violate Rules 13, 14, or 19 of the Federal Rules of Civil Procedure. To the contrary, as explained herein, Rules 13(g) and 14(a)(3) are inapplicable and Rule 19 does not .require this Court to dismiss Mountain States’ claims for failure to join an indispensable party. Thus, Mountain States’ claims'are not subject to dismissal for violation of these Federal Rules of Civil Procedure.

1. Mountain States’ Claims are Not Subject to Dismissal Pursuant to Federal Rule of Civil Procedure 14(a)(3).

Trinity asks this Court to grant summary judgment on Mountain States’ claims in its First Amended Complaint on the ground that the claims do not arise out of the same transaction or occurrence that is the subject matter of the original claims in the action as required by Federal Rule of Civil Procedure 14(a)(3). Rule 14 governs third-party practice, and Rule 14(a)(3), in particular, sets forth the claims that an original plaintiff may assert against a third-party defendant brought into the action. [Doc. 163-1 at 11 (citing Fed.R.Civ.P. 14(a)(3)) ]. Rule 14(a)(3) provides that the “plaintiff may assert against the third-party defendant any claim arising out of the transaction or occurrence that is the subject matter of the plaintiffs claim against the third-party plaintiff.” Fed.R.Civ.P. 14(a)(3). Although Trinity relies upon Rule 14(a)(3) as a basis for summary judgment in its favor, Rule 14(a)(3), as well as the subject matter limitation contained therein, does not apply to Mountain States’ claims against Trinity.

Rule 14(a)(3), by its terms, defines the claims that an original plaintiff may assert against a third-party defendant. See id. Mountain States, however, is not an original plaintiff (or, even, viz-a-viz Trinity and Zurich, a third-party plaintiff), and Trinity and Zurich are not third-party defendants to Mountain States’ claims. Rather, Mountain States, relative to Trinity and Zurich, properly is characterized as a counterclaimant, not a plaintiff, and Trinity and Zurich are properly characterized as counter-defendants. Thus, because Mountain States’ claims against Trinity are not third-party claims, but rather are counterclaims against an existing opposing party, Rule 14(a)(3)’s subject matter limitation is not applicable to Mountain States’ claims against Trinity. The Court therefore rejects Trinity’s contention that dismissal is appropriate because Mountain States’ claims do not satisfy the requirements of Rple 14(a)(3).

A proper application of Rule 14 to the claims before the Court is that Trinity’s and Zurich’s claims against Mountain States are governed by Rule 14(a)(1). Trinity and Zurich are defending parties to the original plaintiff Hartford’s claims against them, and Rule 14(a)(1) provides that Trinity and Zurich may, as third-party plaintiffs, serve third-party complaints on a nonparty such as Mountain States. See Fed.R.Civ.P. 14(a)(1).

Rule 14(a)(3), in turn, governs Hartford’s claims against Mountain States, and not, as Trinity contends, Mountain States’ claims against Trinity. As the Court explained, Rule 14(a)(3) defines the claims that the original plaintiff — ie., Hartford— may assert against the third-party defendant — i.e., Mountain States — and provides that those claims (not Mountain States’ claims) must arise out of the same transaction or occurrence that is the subject matter of the plaintiffs claims against the third-party plaintiffs Trinity and Zurich. See Fed.R.Civ.P. 14(a)(3).

Rule 14(a)(2), in contrast, governs Mountain States’ claims against Trinity and Zurich, for it is this rule that sets forth the claims that the third-party defendant — ie., Mountain States — may bring against the third-party plaintiffs — ie., Trinity and Zurich. Rule 14(a)(2), however, contains no subject matter limitation that precludes Mountain States’ claims against Trinity (or Zurich). Instead, Rule 14(a)(2) provides that the party “served with the ... third-party complaint — ‘the third-party defendant,’ ” Fed.R.Civ.P. 14(a)(2), “must assert any counterclaim against the third-party plaintiff under Rule 13(a) and may assert any counterclaim against the third-party plaintiff under Rule 13(b),” Fed.R.Civ.P. 14(a)(2)(B). Although Rule 13(a) defines a compulsory counterclaim as one which “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim,” Rule 13(b), which governs permissive counterclaims, contains no such subject matter limitation and instead provides that a “pleading may state as a counterclaim against an opposing party any claim that is not compulsory.” Fed.R.Civ.P. 13(a), (b). Thus, even assuming arguendo that Trinity had argued that Rule 14(a)(2) applies, because subsection (a)(2) contains no necessary subject matter limitation, it cannot vitiate Mountain States’ claims.

2. Mountain States’ Claims are Not Subject to Dismissal Pursuant to Federal Rule of Civil Procedure 13(g).

Zurich likewise asks this Court to grant summary judgment on Mountain States’ claims in its First Amended Complaint against it on the ground that the claims do not arise out of the same transaction or occurrence that is the subject matter of the original claims in the action. Although Zurich’s argument is similar to Trinity’s, in that both rely upon rules limiting the subject matter of claims, Zurich, unlike Trinity, does not rely upon Rule 14(a)(3). Instead, Zurich contends that Mountain States’ claims against it are crossclaims governed by Federal Rule of Civil Procedure 13(g), which contains a similar limitation on subject matter as that in Rule 14(a)(3). Specifically, Rule 13(g) provides that' “[a] pleading may state as a cross-claim any claim by one party against a coparty if the claim arises out of the transaction or occurrence that is that is the subject matter of the original action or of a counterclaim.” Fed.R.Civ.P. 13(g). Zurich argues that Mountain States’ claims are improper because they do not arise out of the same transaction or occurrence that is the subject matter of the original action or of a counterclaim as required by Rule 13(g) and that the Court should dismiss the claims on this ground. [Doc. 193 at 6-7 (citing Fed.R.Civ.P. 13(g)) ].

Although Rule 13(g) limits cross-claims to claims that “arise[] out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim,” Fed.R.Civ.P. 13(g), Mountain States’ claims against Zurich are not crossclaims governed by Rule 13(g). Rule 13(g) defines crossclaims as claims against a co-party. See id. (“A pleading may state as a crossclaim any claim by one party against a coparty.”). Mountain States, however, is not a co-party of Zurich’s but rather is an opposing party. Thus, Rule 13(g), and its subject matter limitation, does not apply to Mountain States’ claims against Zurich.

Rule 13 defines Mountain States’ claims brought against an opposing party such as Zurich as counterclaims, and the rule’s provisions governing counterclaims does not necessarily restrict them to claims of a particular subject matter. As previously discussed, Rule 13(b), which governs permissive counterclaims, does not contain the same subject matter limitation set forth in Rule 13(g) governing crossclaims. Rather, Rule 13(b), to the contrary, provides that “a pleading may state as a counterclaim against an opposing party any claim that is not compulsory.” Id. (emphasis added).

For the foregoing reasons, the Court holds that Mountain States’ claims are not governed by the crossclaim standard set forth in Rule 13(g) and that they therefore need not arise out of the same transaction or occurrence as the original subject matter of the action. See id. Instead, they are governed by the counterclaim standard set forth in Rule 13(a) and (b), and Rule 13 does not necessarily restrict the subject matter of counterclaims that may be brought. See Fed.R.Civ.P. 13(a), (b). Thus, the Court rejects Zurich’s contention that Mountain States’ claims are subject to dismissal pursuant to Rule 13(g).

3. Movants should not Advance Legal Arguments Premised upon Rules of Procedure Known to be Inapplicable.

In response to the Court’s May 4, 2015, Order [Doc. 314] requesting additional briefing on the characterization of Mountain States’ claims against Defendants, Zurich concedes that Mountain States’ claims properly are characterized as counterclaims and not crossclaims. [Doc. 327 at 2]. Zurich maintains, however, that Zurich did not “characterize[ ]” Mountain States’ claims as crossclaims but rather only “analyzed and responded” to the claims that Mountain States pled against it as cross-claims “solely because that is how Mountain States characterized its claims against Zurich” [Id.]. Trinity similarly asserts that it analyzed Mountain States’ claims under Rule 14(a)(3) only “[b]ecause Mountain States initially brought its claims against Trinity in a Third-Party Complaint,” [Doc. 328 at 2], and that “[i]f Mountain States now believes its claims ... should be characterized as, and/or amended to be, counterclaims, then Trinity agrees such claims would be governed by Rule 13(b), but Mountain States has not done so,” [id. at 3]. ...

••Defendants’ responses to-the Court’s May 4, 2015, Order suggest that both Zurich and Trinity were aware that Mountain States had mischaracterized its claims either as crossclaims or third party claims and that, although Defendants knew of this mischaracterization, Defendants followed suit simply because that is how Mountain States defined its claims. Mountain States now concedes that its claims are counterclaims and that it inadvertently mislabeled the claims as crossclaims. [Doc. 321 at 6 n.2]. While Mountain States’ unintentional misapplication of the Federal Rules is unfortunate, to the extent that Zurich made a purposeful decision to “analyze[ ]” a claim applying a federal rule it knew was inapplicable and Trinity adopted Mountain States’ erroneous characterization of its claims as third-party claims when it knew that the claims were counterclaims, these decisions constitute a knowing misapplication of law to fact.

If Defendants were, in fact, aware of Mountain States’ mistake, then Defendants did not simply commit the omission of failing to correct Mountain States’ error, but also committed the affirmative act of filing motions seeking an ultimate form of dispositive relief — judgment as a matter of law under Rule 56 — from this Court on the basis of rules they knew were inapplicable. Mountain States’ mistaken characterization of its claims did not — assuming Defendants were aware of the mistake — give Defendants license to present this Court with motions for affirmative. relief premised upon an eironeous application of law to fact, particularly when the purposeful misapplication of the law to fact could have been outcome determinative. Attorneys presenting arguments to this Court by written motion certify that to the best of their belief the claims and legal contentions they make are “warranted by existing law,” and, under this rule, attorneys may not knowingly advance a legally unwarranted position, such as the purposeful misconstruction of counterclaims as cross-claims or third-party claims simply because an opposing party inadvertently mis-characterizes its claims. See Fed.R.Civ.P. 11(b)..

4. Mountain States’ Claims are Not Subject to Dismissal for Failure to Join an Indispensable Party.

Zurich contends that Mountain States’ First Amended Complaint asks the Court to allocate Okland’s defense and indemnity obligations among the insurers in this case and “all other similarly situated insurers.” [Doc. 193 at 7 (citing Doc. 161 ¶¶ 16,16,19, 21, 22, 24, 30, 31, 34, 37-42)]. Consequently, Zurich argues, “all other similarly situated insurers are necessary and indispensable parties to this actioh,” but “not all of these other insurers can be joined in this action.” [Id. at 8]. Therefore, Zurich maintains that- this case, “must be dismissed because absent a ruling as to the allocable share of obligation of the omitted carriers’ policies, there can be no meaningful declaratory judgment as to the obligations of the named carriers.” [Id.].

Federal Rule of Civil Procedure 19(a) sets forth the standard for determining whether a party is “required” to be joined in an action and Rule 19(b) establishes the standard for determining, whether, if a party is required but joinder is not feasible, the action should proceed among the existing parties or should be dismissed for failure to join an indispensable party. See Fed.R.Civ.P. 19(a), (b). . Under this standard, the Court must first determine pursuant to subsection (a) whether the absent insurers are “required” and, only if they are required, next determine pursuant to subsection ■ (b) whether joinder is feasible or, if not feasible, whether the action should continue in the absence of the rer quired parties or .be dismissed. See id.

a. Law Regarding Equitable Contribution.

The Court first sets forth the law regarding Mountain States’ claim for equitable contribution because it is relevant to the Court’s procedural inquiry under Rule 19. “In the insurance context, the right to [equitable] contribution arises when several insurers are obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defended the action without any participation by the others.” Fireman’s Fund Ins. Co. v. Maryland Cas. Co., 65 Cal.App.4th 1279, 77 Cal.Rptr.2d 296, 303-04 (1998) (citations omitted). “Where multiple'insurance carriers insure the same insured and cover the same risk, each insurer has independent standing to assert a cause of action against its coinsurers for equitable contribution when it has undertaken the defense or indemnification of the common insured.” Id. “Equitable contribution permits reimbursement to the insurer that paid on the loss for the excess it paid over its proportionate share of the obligation, on the theory that the debt it paid was equally and concurrently owed by the other insurers and should be shared by them pro rata in proportion to their respective coverage of the risk.” Id.

“The doctrine of equitable contribution applies to insurers who share the same level of obligation on the same risk as to the same insured.” Id. at 304 n. 4. “This right of equitable contribution belongs to each insurer individually. It is not based on any right of subrogation to the rights of the insured, and is not equivalent to standing in the shoes of the insured.” • Id. at 304 (internal quotation marks and citations omitted). “Instead, the reciprocal contribution rights of coin-surers who insure the same risk are based on the equitable principle that the burden of indemnifying or defending the insured with whom each has independently contracted should be borne by all the insurance carriers together, with the loss equitably distributed among those who share liability for it in direct ratio to the proportion each insurer’s coverage bears to the total coverage provided by all the insurance polices.” Id. (citations omitted). “As a matter of equity, insurers of the same risk may sue each other for contribution. This right is not a matter of contract, but flows from equitable principles designed to accomplish ultimate justice in the bearing of a specific burden. The idea is that the insurers are equally bound, so therefore they ‘all should contribute to the payment.” Id. (internal quotation marks and citation omitted).

An insurer’s right to equitable contribution is separate and distinct from its legal duty to defend its insured, the latter of which arises under the insurance contract (while the former arises under principles of equity). While an insurer’s duty to defend its insured is a joint and several obligation, an insurer’s right to equitable contribution is not. See Travelers Indem. Co. of Am. v. AAA Waterproofing, Inc., No. 10-CV-02826-WJM-KMT, 2014 WL 201726, *3 n. 3 (D.Colo. Jan. 17, 2014) (distinguishing an insurer’s contractual duty to defend its insured, which is a joint and several legal obligation, from an insurer’s non-contractual obligation to contribute its share of a mutual insured’s defense costs, which is a pro rata equitable obligation, and explaining that an insurer’s right to seek equitable contribution is not joint and several and therefore does not allow an insurer to “shift[ ] completely” its monetary contribution “from the insurer seeking contribution onto any other co-insurer, as that would inevitably result in a nearly interminable string of actions for equitable contribution”). The cases in Colorado that the parties cite confirm the distinction between insurers’ joint and several liability to a shared insured, which arises from the insurers’ contractual duty to defend, and insurers’ pro rata obligation of contribution to co-insurers, which arises from principles of equity. Compare D.R. Horton, Inc.-Denver v. Mountain States Mut. Cas. Co., No. 12-CV-01080-RJB, 2013 WL 674032, *3 (D.Colo. Feb. 25, 2013) (explaining that when multiple insurers have the same duty to defend, such as when there is more than one primary insurer, that duty is joint and several) and D.R. Horton Inc.-Denver v. Travelers In-dem. Co., No. 10-CV-02826, 2012 WL 5363370, *8-9 (D.Colo. Oct. 31, 2012) (collecting and analyzing cases from other jurisdictions and secondary sources and concluding that although “Colorado courts have not affirmatively resolved the issue of whether a liability insurer’s duty to defend is a joint-and-several obligation where there are other insurers who also have a duty to defend,” “there is sufficient authority indicating that, if the Colorado Supreme Court were to address the issue, it would hold that each liability insurer has a duty to provide a complete defense, such that a liability insurer who breaches this duty can be found liable for the entire amount of the defense fees and costs”), ivith Nat’l Cas. Co. v. Great Southwest Fire Ins. Co., 833 P.2d 741 (Colo.1992) (following the majority rule and holding that the plaintiff-insurer is “entitled to pro rata contribution from [its co-insurer] of its defense costs and settlement payment[s]”); Horton, 2013 WL 674032, at *3 (explaining that although insurers have joint and several liability towards their shared insured, “[t]his is not to say that there should not or will not be an apportionment of the defense costs among the insurers” and holding that this latter separate issue of equitable contribution “is a matter to be worked out among the insurers and, if they cannot do so, then by a court”).

b. Even if the Absent Insurers were “Required” Under Rule 19(a)(1)(A), they are not Indispensable Under Rule 19(b).

Rule 19(a) provides that a party is “required” 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 and is so situated that disposing of the action in the person’s absence may: (i) as a practical matter impair or impede the person’s ability to protect that interest; or (ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed.R.Civ.P. 19(a)(1). '

Zurich asserts that the absent insurers are required under the first prong of this test. Invoking Rule 19(a)(1)(A), Zurich argues that the Court cannot afford complete relief among existing parties because Mountain States’ complaint asks the Court to determine the “liability” of other absent insurers toward Okland and to determine the allocation of Okland’s defense and indemnity obligations among all carriers with a duty to defend. [Doc. 193 at 10], Mountain States’ First Amended Complaint seeks the following relief: (1) that the Court declare “Mountain States owes no duty to indemnify or defend either RLP or Okland in the Underlying Action”; (2) that the Court declare “that, if and only if the Court finds a duty to indemnify or defend ... is owed by Mountain States to RLP or Okland, the costs arising from such duty shall be equitably borne among all insurers (a) having issued an insurance policy to any subcontractor performing work on the Condominiums where (b) such subcontractor executed a service contract with Okland requiring that RLP and/or Okland be named as additional insureds on such policy”; (3) that the Court declare Mountain States is entitled to reimbursement from the Trinity, Zurich, Colorado Casualty and John Doe Defendants “of payments already made on behalf of Ok-land under principles of equitable contribution, equitable subrogation and unjust enrichment”; and (4) that the Court declare “Mountain States is entitled to , an offset for any prospective payments ordered to be made on behalf of RLP, which offset reflects equitable allocation among the Trinity, Zurich, Colorado Casualty and John Doe Defendants of costs for RLP in the Underlying Action.” [Doc. 161 at 11].

Only Mountain States’ second request potentially seeks relief from a “required” absent party within the meaning of Rule 19(a)(1)(A). A party is “required” under Rule 19(a)(1)(A) if “in that person’s absence, the court cannot accord complete relief among existing parties.” Fed. R.Civ.P. 19(a)(1)(A). Mountain States’ second request for relief seeks a declaration from the Court that the duty to defend or indemnify “shall be equitably born among all insurers” providing coverage to Okland, and not simply the insurers named in Mountain States’ complaint. Complete relief among existing parties arguably may not be possible because, for example, the Court may not be able to assess the legal obligations and/or equitable pro rata shares of insurers absent from this litigation.

The Court need not determine, however, whether the absent insurers are “required” within the meaning of Rule 19(a)(1)(A), because, even if joinder of the absent insurers were not “feasible,” the Court could “in equity and good conscience” allow the action to proceed within the meaning of Rule 19(b). Fed.R.Civ.P. 19(b). In deciding whether a required absent party is indispensable under Rule 19(b), the Court should consider the following factors: “(1) the extent to which a judgment rendered in the person’s absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by: (A) protective provisions in the judgment; (B) shaping the relief; or (C) other measures; (3) whether a judgment rendered in the person’s absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder.” Id. The Court holds that, on balance, the factors weigh in favor of retaining the action.

With respect to the first factor, con-cededly, if the Court were to enter an order declaring that the duty to defend or indemnify “shall be equitably born among all insurers” potentially liable for Okland’s defense costs, and not simply the insurers named in Mountain States’ complaint, this declaration could prejudice the absent insurers. To decide the absent insurers’ equitable shares of Okland’s defense costs would require the Court “to interpret the terms, conditions, and exclusions contained in the policies of both the named and omitted carriers’ policies.” Shell Oil Co. v. Aetna Cas. & Sur. Co., 158 F.R.D. 395, 400 (N.D.Ill.1994). In so ruling, the Court would be required to make material rulings on the policies issued by the absent insurers, including whether the absent carriers have paid or are liable to pay their policy limits. “Such a ruling would be both material and highly prejudicial to the interests of the absent carriers.” Id. As one court explained, “Should [the court] decide that the absent carriers’ policies provide coverage and that a certain trigger of coverage will apply to the absent insurers’ policies, another court may be inclined to reach a similar conclusion in order to avoid a conflict in judgments.” Shell Oil, 158 F.R.D. at 400-01 (citing City of Littleton v. Commercial Union Assurance Co., 133 F.R.D. 159, 164 (D.Colo.1990)). “While the underlying carriers, to the extent that they are not parties to this action, may not be precluded from relitigat-ing the meaning of their own policies in state court, a state court may be inclined, albeit not required, to adopt an interpretation similar to that which this court decides is correct.” Id. at 401. “The absent insurers, then, will have lost the opportunity to present their arguments regarding the interpretation of their policies at the time when they would be most forceful, ie., when the interpretation 'of the contract terms was first litigated.” Id. (citing Littleton, 133 F.R.D. at 164).

The Court, however, could wholly avoid any prejudice that- the omitted insurers would suffer as a result of a judgment tendered in their absence by applying the second factor under Rule 19(b), ie., shaping the relief, if any, that the Court enters. If the Court finds a duty to indemnify or defend is owed by Mountain States, and the Court determines that equitable contribution is appropriate, the Court need only grant Mountain States a portion of the relief it seeks. Specifically, the Court need only declare that the costs arising from any duty to defend or indemnify should be born equitably among all insurers present in this action, namely, by the five defendants and by any other John Doe defendants joined by Mountain States. By shaping the relief in this manner, the Court would eliminate any prejudice to the absent insurers.

The Court further concludes that a judgment rendered in the absence of these insurers would, consistent with the third factor set forth in Rule 19(b), be adequate, for equitably distributing costs among five insurers or any other insurers before the Court would provide Mountain States with meaningful affirmative declaratory relief. That Mountain States’ relief would not be as complete as it would be .if .all insurers were before the Court does not render the relief inadequate. Finally, if the Court were to dismiss Mountain States’ claims for nonjoinder, Mountain States would have no adequate remedy, which is the fourth factor the Court must weigh under Rule 19(b). Zurich has argued that Travelers is one of the absent insurers “required” in this litigation and that Mountain States cannot name Travelers in this action because Mountain States already settled Travelérs’ claims against it for allocation of Okland’s defense costs. Similarly, Zurich and Trinity independently have settled Travelers’ claims against them for allocation of Okland’s defense costs. Thus, consistent with Zurich’s argument, there is no alternative' forum in which Mountain States can obtain a declaration that the duty to defend or indemnify “shall be equitably born among all insurers” potentially providing coverage to Okland. This fourth factor, therefore; weighs in favor of allowing this action to proceed without the absent insurers.

The Court finds that three of the four factors set forth in Rule 19(b) weigh in favor of Mountain States’ claims against Zurich proceeding. The Court further concludes that because only one of Mountain States’ requests for relief cannot accord complete relief among the parties named in the complaint and because that one request for relief can be shaped to a