Pitzer College v. Indian Harbor Insurance Co.

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 11, 2019
• Docket: 14-56017
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 11 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

PITZER COLLEGE, No. 14-56017

Plaintiff-Appellant, D.C. No. 2:13-cv-05863-GW-E

v. MEMORANDUM* INDIAN HARBOR INSURANCE COMPANY,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding

Argued and Submitted October 5, 2016 Submission Withdrawn January 13, 2017 Resubmitted October 10, 2019** Pasadena, California

Before: GRABER, PAEZ, and HURWITZ, Circuit Judges.

After Pitzer College appealed the district court’s grant of summary judgment

in favor of Indian Harbor Insurance Company in this insurance coverage dispute, we

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** Judge Graber and Judge Hurwitz were drawn to replace Judge Pregerson and Judge Noonan. Judge Graber and Judge Hurwitz have read the briefs and reviewed the record. certified two questions to the California Supreme Court: (1) “Is California’s

common law notice-prejudice rule a fundamental public policy for the purpose of

choice-of-law analysis?”; and (2) “If the notice-prejudice rule is a fundamental

public policy for the purpose of choice-of-law analysis, can a consent provision in a

first-party claim insurance policy be interpreted as a notice provision such that the

notice-prejudice rule applies?” Pitzer Coll. v. Indian Harbor Ins. Co., 845 F.3d 993,

994 (9th Cir. 2017). The California Supreme Court accepted certification and issued

an opinion concluding that (1) the notice-prejudice rule is a fundamental public

policy of California in the insurance context, and (2) “the rule generally applies to

consent provisions in the context of first party liability policy coverage and not to

consent provisions in third party liability policies.” Pitzer Coll. v. Indian Harbor

Ins. Co., 447 P.3d 669, 671 (Cal. 2019). The California Supreme Court left

undecided “whether the consent provision at issue here contemplates first party or

third party coverage.” Id.

We then received supplemental briefing from the parties addressing the

California Supreme Court’s opinion. Having considered that briefing, we vacate the

judgment of the district court and remand for further proceedings.

1. The district court held that a provision in Indian Harbor’s policy requiring

the application of New York law applied because Pitzer failed to demonstrate that

the California “notice-prejudice” rule was a fundamental state public policy.

2 Because the California Supreme Court has now held to the contrary, it remains to be

determined whether California also has a “materially greater interest” than New

York in the resolution of the issue. See Nedlloyd Lines B.V. v. Superior Court, 834

P.2d 1148, 1151 (Cal. 1992) (quoting Restatement (Second) of Conflict of Laws §

187 (1971)). Because the district court never reached that issue, it should do so in

the first instance on remand.

2. If California law governs this dispute, the dispositive choice-of-law

question is the one left open by the California Supreme Court – whether the Indian

Harbor policy “contemplates first or third party coverage.” Indian Harbor Ins. Co.,

447 P.3d at 671. Because the district court never addressed this issue, we remand

for it do so in the first instance if necessary.

3. Finally, if California law governs and the Indian Harbor policy provides

first party coverage, application of the California “notice-prejudice” rule will turn

on whether the insurer suffered any prejudice from delayed notice of Pitzer’s claim.

Again, the district court did not address this issue, and it should do so on remand if

necessary.

VACATED AND REMANDED. Each party will bear its own costs.