North River Insurance Company v. H.K. Construction Corporation
20-16207
| 9th Cir. | Jul 13, 2021Background
- H.K. Construction Corp. held a commercial general liability (CGL) policy issued by The North River Insurance Co.
- H.K. caused a landslide that damaged a third party, who later sued H.K. for the damage.
- North River filed a declaratory-judgment action seeking a ruling that the policy’s "earth movement" exclusion barred coverage for the landslide-related claims.
- North River had provided the injured party a consultant report (described by H.K. as an "overly‑engineered" solution) and denied coverage one day after delivering that report and about 18 months before the third party sued.
- The district court granted summary judgment for North River; H.K. appealed.
- H.K. also asserted equitable estoppel based on North River’s pre‑denial conduct; the district court rejected that defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the earth movement exclusion bars coverage when H.K.'s work was a causal factor | H.K.: exclusion ambiguous or should not apply when insured’s work contributed | North River: exclusion unambiguously excludes earth‑movement damage even if insured's work was a causal factor | Exclusion unambiguously precludes coverage |
| Whether North River is estopped from denying coverage by its pre‑denial conduct | H.K.: insurer's report and conduct misled and prejudiced H.K., so estoppel should apply | North River: no prejudice or manifest injustice; denial occurred early and H.K. could still defend or hire experts | Equitable estoppel rejected for lack of prejudice/manifest injustice |
Key Cases Cited
- Trishan Air, Inc. v. Fed. Ins. Co., 635 F.3d 422 (9th Cir. 2011) (de novo review of insurance‑policy interpretation)
- Lukovsky v. City & County of San Francisco, 535 F.3d 1044 (9th Cir. 2008) (abuse‑of‑discretion review for estoppel rulings)
- Hart v. Ticor Title Ins. Co., 272 P.3d 1215 (Haw. 2012) (policy interpretation follows ordinary meaning and reasonable lay reading)
- Chase v. State Farm Fire & Cas. Co., 780 A.2d 1123 (D.C. 2001) (reasonable‑expectations doctrine does not authorize rewriting clear policy language)
- AIG Haw. Ins. Co. v. Smith, 891 P.2d 261 (Haw. 1995) (equitable estoppel cannot expand policy coverage absent prejudice)
- Delmonte v. State Farm Fire & Cas. Co., 975 P.2d 1159 (Haw. 1999) (no detriment or manifest injustice where insured retained some control of defense)