HUNT, District Judge:
Plaintiff/Appellant, the City of Vestavia Hills, Alabama ("Vestavia Hills") appeals the district court's denial of its motion to remand the matter back to state court. We have jurisdiction under 28 U.S.C. § 1292(b), and, having concluded that the district court properly denied Vestavia Hills's motion to remand, we affirm.
Vestavia Hills won a judgment in state court against Cameron Development Corporation ("Cameron"). Based on that judgment, Vestavia Hills is now entitled to collect $442,263 from Cameron. Cameron submitted a claim for coverage on the judgment to its insurer, Defendant/Appellee General Fidelity Insurance Company ("General Fidelity"). General Fidelity denied Cameron's claim whereupon Vestavia Hills filed a one-count complaint in state court, suing Cameron and General Fidelity pursuant to Alabama Code § 27-23-2. That code section states, in relevant part:
In other words, in Alabama, if a party wins a judgment, and the defendant's insurer refuses to pay the judgment, the judgment creditor can sue the insurer along with the defendant from the earlier suit to reach the insurance proceeds.
Vestavia Hills filed this action in state court, and General Fidelity removed it to the Northern District of Alabama. As Vestavia Hills and Cameron are both Alabama citizens, diversity jurisdiction was questionable. In denying Vestavia Hills's motion to remand, however, the district court realigned Cameron as a plaintiff because Vestavia Hills's and Cameron's interests converged against General Fidelity in that both Vestavia Hills and Cameron want to force General Fidelity to provide coverage.
Vestavia Hills sought an interlocutory appeal, and the district court certified the question to this Court of "whether a district court may, in a case brought under Alabama Code § 27-23-2, which requires a plaintiff to initiate the action against both the insured and the insurer, exercise its discretion to realign the parties based upon their actual interests."
Vestavia Hills concedes that the purpose of this action is solely to establish whether General Fidelity must provide insurance coverage and that no claim is raised against Cameron, but the city nonetheless argues that the district court erred in realigning the parties because Alabama Code § 27-23-2 expressly states that both the insured and the insurer are to be named as defendants, and points out that the Alabama Supreme Court has held that both parties must be named as defendants.
We review a district court's denial of a motion to remand de novo. Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009). This Court reviews findings of jurisdictional facts for clear error. Scarfo v. Ginsberg, 175 F.3d 957, 960 (11th Cir. 1999).
Weighing the propriety of the district court's decision to realign the parties and deny Vestavia Hills's motion to remand requires us to consider two different interests. On the one hand, "[b]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly. Indeed, all doubts about jurisdiction should be resolved in favor of remand to state court." Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999) (citation omitted).
We next note that federal courts are required to realign the parties in an action to reflect their interests in the litigation. The parties themselves cannot confer diversity jurisdiction upon the federal courts by their own designation of plaintiffs and defendants. City of Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 69, 62 S.Ct. 15, 17, 86 L.Ed. 47 (1941). This Court concludes that the converse of this principle—that parties cannot avoid diversity by their designation of the parties—is also true. Rather it is the "duty. . . of the lower federal courts[ ] to look beyond the pleadings and arrange the parties
Having reviewed the single-count complaint, it is clear that Vestavia Hills did not seek any relief from Cameron. Cf. Duffey v. Wheeler, 820 F.2d 1161 (11th Cir.1987).
Under Weller, Northbrook National Insurance Co., and City of Indianapolis, cited above, it is equally clear that realignment would have been available to Vestavia Hills if it had sought to bring the action in federal court in the first instance. Those cases require the district courts to determine the principle purpose of the suit and the primary and controlling matter in dispute and align the parties accordingly regardless of the fact that the Alabama Code required Vestavia Hills to name Cameron as a defendant. As such, we conclude that the district court did not err in realigning Cameron as a plaintiff and in refusing to remand this matter to state court. Accord Cleveland Hous. Renewal Project v. Deutsche Bank Trust Co., 621 F.3d 554, 568 (6th Cir.2010) ("For the foregoing reasons, we uphold the district court's realignment of the parties to establish complete diversity.").
Turning to Vestavia Hills's other contention that realignment would result in the action being "converted" into a direct action
This Court reversed, holding "that unless the cause of action against the insurance company is of such a nature that the liability sought to be imposed could be imposed against the insured, the action is not a direct action." Id. at 1159. This Court explained further that "courts have uniformly defined the term `direct action' as used in [§ 1332(c)(1)] as those cases in which a party suffering injuries or damage for which another is legally responsible is entitled to bring suit against the other's liability insurer without joining the insured or first obtaining a judgment against him." Id. (quotations omitted.) Because the plaintiff's claim was based on the insurance company's statutory duty to settle claims in good faith, and not the doctor's liability for malpractice, this Court determined the § 1332(c)(1) proviso was not applicable. Id.
Similar to the plaintiff in Fortson, Vestavia Hills could not have brought this action against Cameron, as the single count relates to insurance and Vestavia Hills has already obtained judgment against Cameron. An action brought under Alabama Code § 27-23-2, where the injured party has already obtained a judgment against the insured, is not a direct action as contemplated by § 1332(c)(1) under Fortson.
In Andalusia Enterprises, Inc. v. Evanston Insurance Co., 487 F.Supp.2d 1290, 1298 (N.D.Ala.2007), the court expressed the view that the result in Fortson was contrary to the old Fifth Circuit's opinion in O.M. Greene Livestock Co. v. Azalea Meats, Inc., 516 F.2d 509 (5th Cir.1975).
We thus conclude that realignment of the parties does not result in converting this case into a direct action under 28 U.S.C. § 1332(c).
For the above stated reasons, we affirm.