When Allied denied Dr. Anglesey coverage for a malpractice claim made by the Gutierrezes, the doctor and the claimants settled, with an agreement not to execute against Anglesey, and apparently, an assignment of Anglesey’s claims against Allied to the Gutierrezes. Allied sued the doctor and claimants, seeking (1) declaratory relief as to the rights and duties it owed to each of the Defendants; (2) rescission of the applicable insurance policies; and (3) compulsory arbitration of the claims related to the policies or Dr. Anglesey’s alleged malpractice. The trial court dismissed Allied’s lawsuit, saying Allied lacked standing. The Ninth Circuit reversed.
For an insurer to have Article III standing to pursue a declaratory judgment that a policy was not in effect, the insurer need only “allege it was threatened with injury by virtue of being held to an invalid policy.” Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1222 n.2 (9th Cir. 1998) (en banc). In addition, an insurer has standing to seek declaratory relief in a coverage dispute with its insured.
Because Allied had standing to bring claims for declaratory relief and rescission against Anglesey, Allied also had standing to seek to compel Anglesey to arbitrate those two claims. The impending settlement among the defendants gave Allied standing to sue the claimants. Allied could compel the claimants to arbitrate. The case was improperly dismissed, so it was sent back to the trial court.