Insurance – Parties realigned in coverage action

Where a declaratory judgment suit was brought over insurance coverage for two underlying tort actions, the parties were realigned so that the parties seeking coverage were separated from the carriers.

Background

This case arises from an autocross event where Gilery Entzminger and Timothy Klabunde were struck by a vehicle racing around the autocross track. In this case, they seek declarations as to the fact and amount of insurance coverage afforded them by the insurance defendants. They have also named as defendants the defendants in the underlying tort suits. Plaintiffs originally brought this case in the circuit court, but two defendants removed it to this court.

Analysis

There is no diversity of citizenship because the plaintiffs all are citizens of Virginia, and some of the tort defendants are citizens of Virginia. Lexington and National Union seek to realign the tort defendants as plaintiffs in this case, which would create complete diversity of citizenship. Thus, if the motion to realign is granted, there is diversity jurisdiction, and the motion to remand will be denied.

Lexington and National Union argue that the primary issue is “whether and to what extent the policies issued by Lexington and National Union respond to Plaintiffs’ underlying tort claims.” Plaintiffs say that the principal purpose is “determining whether Lexington and National Union owe coverage to Plaintiffs for the injuries alleged in the underlying lawsuits.”

That is not really inconsistent with what the insurance defendants contend. The difference is more sematic than substantive. It is rather clear that the purpose of this case is to determine whether, and to what extent, the plaintiffs are entitled to coverage under the tort defendants’ insurance policies.

Second, the court must align the parties “according to their positions.” The plaintiffs want a declaration that the tort defendants would be owed insurance coverage by the insurance defendants. If the tort defendants are found to be liable in the tort case, the tort defendants would want insurance coverage.

While it is possible the insurer and insured could be aligned in avoiding coverage, that situation arises in very rare circumstances, none of which are alleged here. Therefore, there is no evidence any of the tort defendants are aligned with the insurance defendants.

Motion to realign granted.

Entzminger v. Lexington Insurance Company, Case No. 3:25-cv-878, May 26, 2026. EDVA at Richmond (Payne). VLW 026-3-234. 7 pp.

Full-Text Opinion
VLW 026-3-234