Injured Non-Party to Insurance Contract Cannot Seek Declaratory Relief Without Judgment on Underlying Tort Claims

Baser v. State Farm Mut. Auto. Ins. Co. (10th Cir.; March 31, 2014)

The plaintiff brought a declaratory judgment action against the defendant seeking to establish the availability of coverage for a non-party insured by the defendant. In the underlying action, the plaintiff brought action against the nonparty in Oklahoma state court as a result of a car accident in which the plaintiff was injured. The plaintiff claimed that the defendant refused to pay more than the tendered limits of its primary policy in the underlying action because the plaintiff’s own underinsured motorist (UIM) policy should next fulfill any potential judgment, rather than the defendant’s secondary umbrella policy. The court noted that the plaintiff was not a party to the insurance policy and had failed to obtain a judgment against the nonparty in the underlying action. As such, the plaintiff failed to allege an actual controversy between himself and the defendant. The court found that the plaintiff had no legally cognizable or protectable interest in the controversy unless he succeeded in the negligence action, because only at that point would the defendant have a legal obligation to pay.