Alex Jones v. St. Paul Fire & Marine Ins.
15-35856
| 9th Cir. | Dec 12, 2017Background
- Plaintiffs Alex, Ken, and Jo Anne Jones and the Estate of Felipe Vargas sued St. Paul Fire & Marine Insurance Co. (St. Paul), the Washington Rural Counties Insurance Program (WRCIP), and related administrator Canfield over insurance coverage and alleged duties arising from payment of a self-insured retention and defense of criminal cases.
- WRCIP is a non-diverse insured (not an insurer under Washington law) that paid its self-insured retention; St. Paul provided excess coverage under policies at issue.
- Plaintiffs argued WRCIP breached contract and owed extra-contractual duties (including duties of good faith) and that their public defense attorneys should be covered as "appointed officials" under St. Paul’s policies.
- District court granted summary judgment for defendants, dismissed WRCIP as fraudulently joined, and found the public defenders were not covered "appointed officials." Plaintiffs appealed.
- The Ninth Circuit affirmed: WRCIP was fraudulently joined because plaintiffs failed to state viable claims against it, and the attorneys were not insured "appointed officials" under the policies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WRCIP was properly joined and liable on breach of contract | WRCIP failed to pay part of its self-insured retention for plaintiffs' benefit; plaintiffs may be third-party beneficiaries | WRCIP satisfied its contractual duty by paying the self-insured retention; any coverage dispute is with St. Paul | WRCIP fraudulently joined; plaintiffs did not state a breach of contract claim |
| Whether WRCIP owed extra-contractual/common-law or statutory duties to plaintiffs | WRCIP owed duties of good faith and fiduciary duties related to insurance handling | WRCIP is not an "insurer" under Wash. law and therefore owes no insurer duties; no special relationship or fiduciary duty existed | No plausible extra-contractual duties; claims fail |
| Whether plaintiffs preserved argument that WRCIP must share self-insured retention | Plaintiffs contend entitlement to portion of retention | Defendants note plaintiffs forfeited the argument by not raising it below | Argument forfeited; alternatively, meritless on the merits |
| Whether public defense attorneys are "appointed officials" under St. Paul policies | Attorneys were appointed officials and thus covered by policy | Policies’ plain meaning and policy definitions distinguish appointed officials from independent contractors; contracts and malpractice insurance indicate they were independent contractors | Attorneys are not covered as appointed officials; summary judgment for insurer affirmed |
Key Cases Cited
- Morris v. Princess Cruises, Inc., 236 F.3d 1061 (9th Cir. 2001) (fraudulent joinder standard and burden on defendant to show joinder is fraudulent)
- Tibble v. Edison Int’l, 843 F.3d 1187 (9th Cir. 2016) (appellate forfeiture doctrine for arguments not raised in district court)
- Shell Oil Co. v. Nat’l Union Fire Ins. Co., 52 Cal. Rptr. 2d 580 (Cal. Ct. App. 1996) (insurer must treat co-insureds equally — inapplicable where party is an insured, not an insurer)
- Liebergesell v. Evans, 613 P.2d 1170 (Wash. 1980) (elements for establishing a common-law fiduciary relationship)
- Panorama Vill. Condo. Owners Ass’n Bd. of Directors v. Allstate Ins. Co., 26 P.3d 910 (Wash. 2001) (undefined contract terms construed by plain, ordinary meaning)