Capitol Specialty Insurance Corporation v. Steadfast Insurance Company

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 16, 2025
• Docket: 24-2314
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 16 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

CAPITOL SPECIALTY INSURANCE No. 24-2314 CORPORATION, a Wisconsin corporation, D.C. No. as assignee of United Construction 2:20-cv-01382-JCM-MDC Company,

Plaintiff - Appellant, MEMORANDUM*

v.

STEADFAST INSURANCE COMPANY, a Delaware corporation,

Defendant - Appellee,

and

RHP MECHANICAL SYSTEMS, a Nevada corporation,

Defendant.

Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding

Argued and Submitted April 9, 2025 San Francisco, California

Before: SCHROEDER, S.R. THOMAS, and MILLER, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. This is a dispute between insurers that arises out of United Construction

Company’s (“United”) installation of defective roofs on two warehouses in Reno,

Nevada, known as the Military Road and Milan properties. Appellee Steadfast

Insurance Company (“Steadfast”) insured United under a contractor’s professional

liability policy and denied coverage.

During the policy period, United requested that its broker, L/P Insurance

Services (“L/P”), provide notice to Steadfast of the problems at Military Road. L/P

did not do so until after the policy expired. United sued L/P for professional

negligence, and L/P’s insurer, Appellant Capitol Specialty Insurance Corporation

(“Capitol”), settled the suit in exchange for United’s assignment of its claims with

respect to the Military Road and Milan properties. Capitol then brought this action

against Steadfast for breach of contract, bad faith, and violations of Nevada’s

Unfair Claims Practices Act.

The district court correctly granted summary judgment to Steadfast on the

Military Road claim because United failed to give Steadfast timely notice. On

appeal, Capitol contends that notice was timely because earlier, timely notice had

been provided on a different project, the Virginia Street project, and the Military

Road project should be considered part of the same “Claim.” The policy provision

on which Capitol relies relates to the limit of policy liability, however, and not to

notice. The provision that does apply requires notice within 60 days of the policy’s

2 24-2314 expiration, and notice of the Military Road claim was not provided within that

period.

As to the Milan claim, Steadfast denied coverage because United incurred

remediation costs without first obtaining Steadfast’s written consent. United’s

policy required such consent, and it is undisputed that United did not obtain it.

Capitol now contends that consent was required only for costs related to “Claim

Expenses,” and no “Claim” had been made at the time United incurred the

remediation costs. The consent requirement is not so limited. It provides that

“[n]o costs, charges or related ‘Claim Expenses’ shall be incurred without

[Steadfast’s] written consent.” That provision meant that United would not cover

any costs or charges, or “Claim Expenses” related to those costs or charges, unless

it consented before they were incurred. See McDaniel v. Sierra Health & Life Ins.

Co., 53 P.3d 904, 906 (Nev. 2002) (instructing that insurance terms must be given

their “plain, ordinary, and popular meaning”). The district court therefore

correctly granted summary judgment to Steadfast on the breach-of-contract claim

regarding the Milan project.

The district court was also correct to grant summary judgment to Steadfast

on United’s remaining claims because there were no triable issues as to whether

Steadfast performed in a manner that was “unfaithful to the purpose of the

[policy],” Hilton Hotels Corp. v. Butch Lewis Prods., Inc., 808 P.2d 919, 923 (Nev.

3 24-2314 1991), or whether Steadfast committed any of the violations enumerated in Nevada

Revised Statutes section 686A.310.

AFFIRMED.

4 24-2314