MEMORANDUM OPINION AND ORDER

BAREFOOT SANDERS, Senior Judge, United States District Court Northern District of Texas.

Before the Court is Plaintiffs' Motion to Remand and Motion for Leave of Court to File Evidence, filed January 5, 2000, and Defendants' Response to Plaintiffs' Motion to Remand, filed January 18, 2000. After due consideration of the motions and briefs of the parties, as well as the evidentiary submissions, the Court is of the opinion that Plaintiffs' Motion for Remand should be DENIED.

I. BACKGROUND

Plaintiffs Billy and Ethel Dawson originally filed this case in the 249th Judicial District Court of Johnson County, Texas. They seek a declaratory judgment that certain contracts of insurance written by Defendants Legion Indemnity Company, Guaranty National Insurance Company, and Safeco Insurance Company provide coverage for the death of their son, Luke Dawson. Esco Communications, Inc. is the insured party under the insurance contracts at issue, and is named as a Defendant in this lawsuit.

Billy and Ethel Dawson earlier filed suit against Esco Communications in October 1998 for the wrongful death of their son. See Defendants' Appendix at 2. Esco filed for Chapter 7 bankruptcy in May of 1999, and all litigation was automatically stayed. See Def App. at 8. The Dawsons sought relief from the automatic stay to pursue their claim against Esco, representing that they would not seek any assets from the bankruptcy estate of Esco, but instead would seek recovery solely from Esco's insurers. See Def. App. at 10-11. The stay was lifted, and the underlying wrongful death suit proceeds by seeking a remedy from insurance proceeds. See Def. App. at 12.

Defendant Legion removed the instant declaratory judgment to federal court on December 8, 1999 on the basis of diversity jurisdiction. Safeco and Guaranty joined in the removal on December 22nd and December 14th, respectively. Defendant Legion is a citizen of Illinois; Defendant Safeco is a citizen of Washington. Defendant Guaranty is a California corporation with its principal place of business in Colorado. Plaintiffs Billy and Ethel Dawson and Defendant Esco Communications are citizens of Texas.

Plaintiffs now seek to remand this suit to state court for lack of complete diversity.

II. ANALYSIS

To sustain diversity jurisdiction, there must be an actual, substantial controversy between citizens of different states, all of whom one side of the controversy are citizens of different states from all parties on the other side. See City of Indianapolis v. Chase Nat. Bank of the City of New York, 314 U.S. 63 (1941) (citations omitted). Plaintiffs argue that Defendant Esco Communications is not diverse from Plaintiffs, and thus subject matter jurisdiction is not conferred upon this Court. Defendants Legion, Safeco and Guaranty argue that Esco must be realigned as a proper plaintiff, or alternatively, Esco should be considered a nominal party for diversity purposes.

A. Alignment and Nominal Party

Diversity jurisdiction cannot be conferred upon the federal courts by the parties' own determination of who are plaintiffs and who defendants; the Court has an affirmative duty to look beyond the pleadings, and arrange the parties according to their sides in the dispute. See City of Indianapolis, 314 U.S. at 69. The court must determine the "principal purpose of the suit," and "the primary and controlling matter in dispute" and properly align the parties according to their interest. See id. The parties must be aligned in accordance with the primary dispute in the controversy, even where a different, legitimate dispute between the parties supports the original alignment. See Lowe v. Ingalls Shipbuilding, 723 F.2d 1173 (5th Cir. 1984).

The primary dispute in this action is whether Safeco, Guaranty, and Legion must provide insurance coverage for the claims brought by Plaintiffs, the injured party, against Esco, the insured. Therefore, even though Plaintiffs and Esco have a legitimate underlying dispute in the wrongful death action, Plaintiffs and the Esco are aligned for purposes of the controlling issue in this suit — insurance coverage. Should Esco be held liable for Luke's death, Esco would side with the Dawsons in arguing that the insurance companies must cover any judgment.

Although there is no Fifth Circuit case directly on point, the Court finds other authority to be persuasive in its decision to realign. For example, in The Home Ins. Co. of Illinois v. Adco Oil Co., 154 F.3d 739 (7th Cir. 1998) cert denied 119 S.Ct. 1250, the Seventh Circuit stated that, in determining subject matter jurisdiction on the basis of diversity, "the normal alignment of parties in a suit seeking a declaratory judgment of non-coverage is Insurer versus Insured and Injured Party." The Court also notes two cases from district courts in this circuit: Hedges v. Rudeloff, 196 F. Supp. 475 (S.D. Tex. 1961), where the court found that an insured's administrator, listed as a defendant, "in truth and in fact [was] a plaintiff" in a suit by an injured party plaintiff against an insurer; and Thompson v. Bankers and Shippers Insurance Co. of New York, 479 F. Supp. 956 (N.D. Miss. 1979), where the Court realigned two insured parties on the opposite side as an insurer for diversity purposes. In sum, the Court determines that Defendant Esco should be realigned as a plaintiff, resulting in complete diversity.

Alternatively, the Court finds that Esco is a nominal party in this lawsuit. The test of whether a defendant is a nominal party is "whether in the absence of [the party], the Court can enter a final judgment consistent with equity and good conscience which would not be unfair to the plaintiff.' See Farias v. Bexar County Bd. of Trustees for Mental Health Mental Retardation Services, 925 F.2d 866, 871 (5th Cir. 1991), citing Tri-Cities Newspapers Inc. v. Tri-Cities Printing Pressmen and Assistants Local 349, 427 F.2d 325 (5th Cir. 1970). The bottom line concern in this determination is whether the plaintiff can establish a cause of action against the allegedly nominal defendant in state court. See Farias 925 F.2d at 872.

Whereas an insured may be a technically necessary party in a declaratory judgment action regarding coverage, see TEX. CIV. PRAC. REM. CODE § 37.006 ("all persons who have or claim any interest that would be affected by the declaration must be made parties"), this does not mean that Esco is not a nominal party. Plaintiffs have represented in the bankruptcy action that they do not intend to seek any remedy directly from Esco. See Def. App. at 10-11. Therefore, Esco has no real pecuniary interest in the outcome of the declaratory judgment action, and it appears that Plaintiffs' inclusion of Esco may be solely to defeat diversity. The Court finds that Esco is a nominal party and its citizenship should be ignored for purposes of subject matter jurisdiction.

B. Defects in Removal Procedure

Plaintiffs further argue that the case should be remanded because Defendants' removal was procedurally improper. Plaintiffs are correct that Esco did not join in the removal as required by 28 U.S.C. § 1446 (a). However, because the Court has determined that Esco's interest are aligned with the Plaintiffs or that Esco is a nominal party, Esco's failure to join in the removal does not make it improper. See Farias, 925 F.2d 866, 871-2 (5th Cir. 1991).

Plaintiffs are also correct that Legion failed to allege the state of incorporation and principal place of business of Safeco Insurance Company in its Notice of Removal. Such jurisdictional facts must be alleged in cases involving corporations. See Getty Oil Corp. v. Ins. Co. of N. America, 841 F.2d 1254, 1259 (5th Cir. 1998). However, in Safeco's Joinder to Removal filed two weeks later, Safeco cured this fault by stating that its principal place of business and state of incorporation is Washington. The Court finds that all technical defects in jurisdictional allegations are properly amended pursuant to 28 U.S.C. § 1653, and thus this case is properly before it.

III. CONCLUSION

For the reasons stated above, Plaintiffs' Motion to Remand is DENIED.

SO ORDERED.