Slip Opinion
9th Cir.Oct 10, 2023Background:
- Plaintiff insureds AV Builder, RestorCorp, and their president Madureira faced a sexual-harassment/employment-claims demand and suit by former employee Laura Dusina.
- Plaintiffs had claims-made-and-reported employment-practices liability insurance with Houston Casualty Company (HCC); HCC denied coverage and plaintiffs sued for breach of contract and breach of the implied covenant of good faith and fair dealing.
- The policy required notice of a "claim" (defined to include a written demand or filing of suit) within specified timing provisions; the parties disputed whether 60 days or a 30/60 hybrid governed and whether those provisions were ambiguous.
- Dusina sent communications on August 1 and August 14, 2018 (and her counsel provided a draft complaint later), and plaintiffs notified HCC on October 15, 2018.
- The district court granted summary judgment for HCC; the Ninth Circuit affirmed, holding the August communications constituted a "claim," so October 15 notice was untimely even under the longest applicable period.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy's notice provisions are ambiguous (30 vs 60 days) | Policy ambiguous; ambiguities construed for insured | Provisions read plainly; 60-day notice governs | Court assumed longer (60 days) for plaintiffs but did not decide ambiguity; result unchanged |
| Whether August communications constituted a "claim" under the policy (written demand) | No claim until later (Sept. 13 draft complaint); earlier emails were not a demand for damages | Aug. 1 and Aug. 14 communications were written demands triggering a claim | August communications were claims as a matter of law |
| Whether plaintiffs' Oct. 15, 2018 notice to HCC was timely | Oct. 15 was within applicable period | Oct. 15 was more than 60 days after claim notice (Aug. 14) and therefore untimely | Notice was untimely; coverage not triggered |
| Whether a triable dispute exists about actual notice by Aug. 14 | Plaintiffs argue factual dispute about when they actually received a claim | HCC argues written notices put insureds on actual notice; no reasonable juror could disagree | No reasonable juror could find lack of actual notice by Aug. 14; summary judgment for HCC affirmed |
Key Cases Cited
- Adir Int’l, LLC v. Starr Indem. & Liab. Co., 994 F.3d 1032 (9th Cir. 2021) (standard of review for summary judgment cited)
- Pension Tr. Fund for Operating Eng’rs v. Fed. Ins. Co., 307 F.3d 944 (9th Cir. 2002) (in claims-made policy, notice triggers coverage)
- E.M.M.I. Inc. v. Zurich Am. Ins. Co., 84 P.3d 385 (Cal. 2004) (ambiguities in insurance contracts construed for insured)
- Westrec Marina Mgmt., Inc. v. Arrowood Indem. Co., 163 Cal. App. 4th 1387 (Cal. Ct. App. 2008) (threat letters demanding compensation can constitute a written demand/claim)
- Abifadel v. Cigna Ins. Co., 8 Cal. App. 4th 145 (Cal. Ct. App. 1992) (formal lawsuit not required; a demand can constitute a claim)