St. Luke's Health System, Ltd. v. Allied World National Assurance Co.

Ninth Circuit

St. Luke's Health System, Ltd. v. Allied World National Assurance Co.

706 F. App'x 341

CourtCourt of Appeals for the Ninth Circuit

DecidedAugust 30, 2017

Docket15-35767

StatusUnpublished

This text of 706 F. App'x 341 (St. Luke's Health System, Ltd. v. Allied World National Assurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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St. Luke's Health System, Ltd. v. Allied World National Assurance Co., 706 F. App'x 341 (9th Cir. 2017).

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Opinion

MEMORANDUM ***

Allied World National Assurance Company and Allied World Specialty Insurance Company (collectively, “Allied World”) appeal the district court’s grant of judgment on the pleadings in favor of St. Luke’s Health Systems, Ltd,, and St. Luke’s Regional Medical Center, Ltd. (collectively, “St. Luke’s”). We review de novo. Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 883 (9th Cir. 2011). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

In a previous appeal, we upheld the district court’s determination that St. Luke’s anti-competitive merger with another regional health care provider violated § 7 of the Clayton Act. Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775, 788, 792 (9th Cir. 2015). The sole question here is whether the insurance contract between St. Luke’s and Allied World indemnifies St.. Luke’s for the attorneys’ fees incurred in defense of that suit.

Under the plain terms of the contract, attorneys’ fees are covered. The contract covers “Loss arising from a Claim ... against [St. Luke’s] for Antitrust Activities.” “Antitrust Activities” is defined as including “a violation of ... the Clayton Act.” Allied World does not dispute that “Loss” covers attorneys’ fees.

Allied World’s contention that the contract doesn’t cover instances in which the insured loses its antitrust suit hinges on the notion that a finding that a merger is anti-competitive under § 7 of the Clayton Act is equivalent to the insured having “gain[ed] ... financial advantage” under Exclusion A of the contract. See Saint Alphonsus, 778 F.3d at 783. But under Idaho law, insurance contracts are to be construed strictly against the insurer and insurance exclusions in favor of the insured, See Moss v. Mid-Am. Fire & Marine Ins. Co., 103 Idaho 298, 647 P.2d 754, 756 (1982). “The burden is on the insurer to use clear and precise language if it wishes to restrict the scope of coverage and exclusions not stated with specificity will not be presumed or inferred.” See Clark v. Prudential Prop. & Cas. Ins. Co., 138 Idaho 538, 66 P.3d 242, 245 (2003).

AFFIRMED.

***

This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3,

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MEMORANDUM ***

Allied World National Assurance Company and Allied World Specialty Insurance Company (collectively, “Allied World”) appeal the district court’s grant of judgment on the pleadings in favor of St. Luke’s Health Systems, Ltd,, and St. Luke’s Regional Medical Center, Ltd. (collectively, “St. Luke’s”). We review de novo. Lyon v. Chase Bank USA, N.A., 656 F.3d 877, 883 (9th Cir. 2011). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

In a previous appeal, we upheld the district court’s determination that St. Luke’s anti-competitive merger with another regional health care provider violated § 7 of the Clayton Act. Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775, 788, 792 (9th Cir. 2015). The sole question here is whether the insurance contract between St. Luke’s and Allied World indemnifies St.. Luke’s for the attorneys’ fees incurred in defense of that suit.

Under the plain terms of the contract, attorneys’ fees are covered. The contract covers “Loss arising from a Claim ... against [St. Luke’s] for Antitrust Activities.” “Antitrust Activities” is defined as including “a violation of ... the Clayton Act.” Allied World does not dispute that “Loss” covers attorneys’ fees.

Allied World’s contention that the contract doesn’t cover instances in which the insured loses its antitrust suit hinges on the notion that a finding that a merger is anti-competitive under § 7 of the Clayton Act is equivalent to the insured having “gain[ed] ... financial advantage” under Exclusion A of the contract. See Saint Alphonsus, 778 F.3d at 783. But under Idaho law, insurance contracts are to be construed strictly against the insurer and insurance exclusions in favor of the insured, See Moss v. Mid-Am. Fire & Marine Ins. Co., 103 Idaho 298, 647 P.2d 754, 756 (1982). “The burden is on the insurer to use clear and precise language if it wishes to restrict the scope of coverage and exclusions not stated with specificity will not be presumed or inferred.” See Clark v. Prudential Prop. & Cas. Ins. Co., 138 Idaho 538, 66 P.3d 242, 245 (2003).

AFFIRMED.

***

This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3,

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706 F. App'x 341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-lukes-health-system-ltd-v-allied-world-national-assurance-co-ca9-2017.

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