COLUMBIAN FINANCIAL CORP. v. BancInsure, Inc.

functory complaint if this were decided on allegations

this form and alone.” He

therefore directs us to order transcripts cases, underlying

from one of his because charges]

“when [the substantiated would

represent a scandalous misconduct

judicial officer and a stain to complainant’s

Court.” But nowhere six-

page complaint ten-page supplement he explain specific

does what misconduct reveal, transcripts

those or where transcripts

within the the alleged miscon duct can be found. In re Complaint Cf. Misconduct,

Judicial F.3d 969-70. pointing anything specific,

Without com

plainant’s suggestion that we order tran

scripts proof misconduct, isn’t but rath

aner invitation for the Judicial Council to fishing

conduct a expedition. As we’ve

previously explained, “vague accusations

and convoluted satisfy demands don’t com

plainant’s obligation provide objective misconduct,”

evidence of so this must Complaint dismissed. In re Judicial

Misconduct, (9th 2009).

Cir.Jud.Council

DISMISSED.

COLUMBIAN FINANCIAL CORPO

RATION; McCaffree, Carl

Plaintiffs-Appellees,

BANCINSURE, INC., Defendant

Appellant.

No. 10-3077.

United States Court Appeals,

Tenth Circuit.

June

HARTZ, Judge. Circuit

I. INTRODUCTION (Banclnsure) Banclnsure, appeals a Inc. favor of declaratory judgment Colum- a former Corporation Financial and bian McCaffree, (collectively, the director, Carl Insureds) by the United handed down for the District States District Court held that the claims- Kansas. The court liability policy made directors-and-officers (the Banclnsure covered Policy) issued expiration until the claims made 11, 2010, May though even Policy on Bank had de- Kansas State Commissioner appointed bank insolvent and clared the Deposit Corpora- Insurance the Federal (FDIC) August receiver on tion judgment below because vacate the We jurisdiction when the district court lacked may have Although there was entered. the De- an actual under been Act, Judgment 28 U.S.C. claratory filed, 2201(a), suit no such was by the time of the controversy existed ruling. Only one claim had district court’s Policy might made for which litigation coverage, during provide Policy that the stipulated Banclnsure had failed to the claim. The covered any reason to to the district court against the Insureds that a claim believe that would lead arise in the future LLP, Oliver, Foulston Siefkin D. and the James to a between (Keith Witten, Park, KS, Gilli- Nor did regarding coverage. Overland Insureds Park, KS, P.A., Hayes, why they Overland land other reason & they suggest briefs), Defendant- with him on the of the Poli- judicial construction needed Appellant. cy. (Micheál Thompson Lyndsey J. Conrad II. BACKGROUND brief), Husch Blackwell on the

with her Policy A. The MO, Plaintiffs-Ap- LLP, City, Kansas pellees. Policy a claims-made was May May ran from

whose term Policy 11, 2010, on which MURPHY, HARTZ, “or the date Before terminated, effeсtively whichever GORSUCH, Judges. [wa]s Circuit practicable 17. Under a Aplt.App. together sooner.” soon as with such [wa]s request. information as the Insurer policy, “coverage may effective claims-made act is if a discovered [covered] interpret Id. at 21. this lan- company attention of the insurance differently. guage rather The Insureds no during period policy, the matter if goes contend that Columbian into receiv- Berry & Mur- the act occurred.” Policy ership, the covers all made claims Co., Ins. P.C. v. Carolina Cas. phy, through the end of the original policy peri- (10th Cir.2009) (internal 803, 809 n. 3 F.3d od, only for although Wrongful Acts com- omitted). Policy The cov- quotation marks mitted the Bancln- receivership. before any claim reported ered to Banclnsure Policy sure that the contends covers during policy period the that was made (or made) claims made deemed to be- against a Columbian officer or director for receivership. fore the Act,” “any “Wrongful which meant actual provisions Two further men- need to be misstatement, error, alleged misleading or IX.B, § tioned. Under a claim after made statement, omission, neglect act or or or Policy the terminates having is treated as duty by any of Person breach Insured during if policy period the Co- made acting solely Capacities.” in their Insured provides po- lumbian written notice of the at 16. Aplt-App. tential claim to days Banclnsure within 30 addition, of period. of the end the In if Policy The provision upon the renewed, Policy § the is canceled or not II X.E, § appeal focused on permits purchase Columbian to additional scope coverage which concerns the of coverage for claims during made an Ex- is placed receivership Columbian in or oth- Reporting tended Period up of to three ceases to in engage banking erwise active years Wrongful for Acts during committed business. Entitled “Reorganization/Cessa- the policy period. Business,” of tion the states in section part: relevant Receivership Litigation B. The If after the Policy, effective date of this operation of X.E became relevant Company engage the shall in cease to 22, 2008, on August when the Kansas State banking active business or cease to ac- Bank Commissioner declared Columbian reason, deposits cept any coverage for appointed insolvent and the as its FDIC shall cease as of the the date of cessa- receiver. stopped accepting Columbian of business, and, tion such spe- absent a deposits and engaging banking active agreement cific written contrary, day. the same business Company the shall not be entitled to coverage provided obtain the extended Soon thereafter Banclnsure received Policy. under Section II. of the For August letter dated purposes clause, of FDIC, this cessation of providing notice of “potential claims include, banking business of shall the former directors and officers of to, but not be appointment limited mismanagement [Columbian] of lend- any by banking regu- federal or ing by state institution and for activi- other receiver, lators of a liquidator person or may ties which constitute a ‘wrongful act’ similar capacity ‘wrongful act,’ Transac- lending as defined occurring tion request Policy].” [the September On federal or state regulator. Compa- attorney representing Columbian ny shall provide written notice such its and directors sent a noti- officers letter cessation of business to Insurer as fying potential Banclnsure of claims by the [La- to the claim regard September on and others. And FDIC ” Id. at 167. The same Banclnsure Fund.... borers] forwarded to Columbian record, letter, allegedly from the Construction which is 12 letter September (the deny La- Training [Banclnsure] Fund “indicated Industry Laborers Fund) brought by the claim demanding payment [the borers McGowan, against Brian $486,998.06, of its uninsured Fund Laborers] the amount provided was not dur- August claiming that notice Columbian deposits with Policy Id. at 77. ing that it received these Period.” admits Columbian, joined by now response, claims both notices days April filed on 28 a plaintiff, Fund within 30 McCaffree as a and the FDIC added a complaint, second amended August that: seeking III declaration Count 2008, 18, filed Columbian On December claims sent to potential the notices of seeking a declar- in court an action federal 3, September about Banclnsure on or noted dis- complaint The atоry judgment. 18, September regarding and and Banclnsure Columbian putes between FDIC, by claims unin- filed Policy and meaning of the regarding the depositors, sured and the [Laborers] controversy ex- actual that “[a]n asserted timely that In- [the Fund were and Banc[I]n- and between Columbian isted] are therefore entitled sureds] liabilities, rights, regarding the[ir] sure any specifically which were iden- claims Policy.” Id. at ... under the and duties as claims tified in those notices treated I a determination sought 12. Count during Policy Period. made Policy, coverage the terms of “[u]nder receiver, of a Id. at 80. by appointment ceased canceled”; “that the policy was not

but the The about for McGow- full ... in force Policy remainfed] 3, 2009, September an was short-lived. On effect”; that “notice of a Claim stipulated that the “claim as- [timely] Act such Wrongful [wa]s [wa]s Brian McGowan” serted May Banclnsure on or before reсeived Fund in Missouri state by the Laborers (internal 11, quotation marks 2008.” Id. Policy.” under the court covered “[wa]s omitted). (An extend- complaint amended and Bancln- Id. at 167. Both the Insureds timely notice to deadline for alleged ed the summary judg- motions for sure then filed 2010.) 11, II in the May pleaded Count Bancln- The district court denied ment. if the court treated alternative granted motion and the Insureds’ as sure’s canceled, Policy it should declare language I. It ruled that “the to Count purchase “an had the Columbian and that unambiguous” the policy [was] Reporting Period under Section Extended May until period continue[d] “[t]he Policy.” Id. at II of the 10, It 2010.” Id. at 332. determined in not address the alternative claim need later, early A months in March few II. it held that the Insureds Count And a lawsuit the Laborers Fund filed preserving III waived Count state court Brian Missouri pretrial issue in the order. McGowan, a former officer of Columbian. claim, lеarning

After III. DISCUSSION him notifying “that McGowan letter sent defend, issue that we must resolve duty no The sole Policy include[d] jurisdiction. court’s appeal is the district duty pay reasonable but include d[id] has raised this is- costs, Although party neither rights its defense ‍​​‌​​​​‌‌‌​​​‌​‌‌​‌​‌‌​‌​‌​‌​‌‌​‌​​‌‌‌​‌‌​‌​​‌‌‌‍and reserved sue, duty sponte tempt we have a to do so sua declaratory- at a formulation in the question when we notice substantial re- judgment context is set forth Aetna Life garding jurisdiction. Tafoya our See Haworth, Insurance v.Co. 300 U.S. Justice, Dep’t (1937), which, 81 L.Ed. 617 (10th Cir.1984). words, Justice Jackson’s later “used the whole catalogue phrases of familiar to de- Declaratory Judgment Act fine and delimit proper the measure of [a provides: “In a case of actual controversy Pub. Serv. action].” jurisdiction, within its court of the Co., Inc., v. Wycoff Comm’n States, upon filing United of an appro (1952). 97 L.Ed. 291 priate pleading, may rights declare the Aetna said: legal other relations of par interested ty seeking declaration, such whether or must be definite and not further sought.” relief is or could be concrete, touching legal relations of 2201(a) added). 28 U.S.C. parties having legal adverse interests. phrase ‘case of actual controversy’ “[T]he It must be a real and substantial con- in the Act refers type of ‘Cases’ and troversy admitting specific relief justiciable ‘Controversies’ that are under through decree of a conclusive charac- Article III” of the United States Constitu ter, distinguished as opinion Medlmmune, Genentech, tion. Inc. v. advising what the law would be upon a Inc., 118, 127, 549 U.S. 127 S.Ct. 166 hypothetical state offacts. (2007). L.Ed.2d 604 240-41, Id. at 461 (emphasis S.Ct. add- long Article III has interpret ed) (citations omitted). Supreme As the forbidding ed as federal courts from ren observed, recently however, Court “Aetna dering advisory opinions. See Flast v. Co and following the cases it do not draw the hen, 83, 96, 392 U.S. 88 S.Ct. brightest of lines between those declarato- (1968) (“[T]he L.Ed.2d 947 implicit policies ry-judgment satisfy actions that the case- embodied Article III impose the or-controversy requirement and those that against advisory rule opinions on federal Medlmmune, Inc., do not.”' courts.”). sure, To advisory opinion 127, 127 S.Ct. 764. The question comes may sometimes be valuable. Often two “ (or down to more) alleged, “whether the facts under persons many disagree about circumstances, all the one, both, what the show that requires law there is substantial willing controversy, to incur expense between having the courts having legal interests, resolve the matter. But adverse of sufficient required more is before can one invoke the immediacy and reality to warrant the is- ” authority of courts created Article III. suance of a declaratory judgment.’ It is not the role of federal courts to added) (quoting Maryland Cas. Rather, resolve abstract issues of law. Co., Co. Coal & Oil 312 U.S. Pacific they are to disputes review arising out of 273, (1941)); 85 L.Ed. 826 see specific facts when the resolution of the Rio Grande Silvery Minnow v. Bureau of dispute practical will have consequences to Reclamation, 1111 n. 12 the conduct of parties. (10th (courts Cir.2010) presented with de- claratory-judgment

Unfortunately, actions “face the there is no formula to diffi- every determine in cult task of distinguishing whether the between actual Article III Controversy” “Case or require- controversies and attempts obtain advi- ment has been satisfied. The classic at- sory opinions on hypothetical the basis of (internal was, and Aetna absent resolution in its quotation marks controversies” omitted)). favor, [presumably by state “compelled to maintain reserves in excess of law] Nevertheless, of Supremе review $20,000” respect policies. with quite instructive. decisions can be Court short, itself, the de- with Aetna first begin We file suit on is- the insured could identical Court under Supreme cision and, success, upon sues be entitled to and, Declaratory Judgment appropri- Act insurer, payments from the the insurer policy, an insurance ately, involving one bring can not, here, liability policy. although insured, waiting without for suit policies insurance had issued five

Aetna factual ful- at least when the issues have policies life. If the were on Haworth’s (that is, effect, ly Haworth could collect the cash matured the factual premise beneficiary could or his collect “hypothetical”), values is not his death. The upon amounts formally their on expressed differences disability provided (there also benefits. policies the issue is a “real and substan- presented formal claims to Aet- Haworth controversy”), tial likelihood of contending that he become dis- na insured, or his beneficiary, eventual- disability and that his had both abled ly high, a claim is bringing not inevit- obligation pay him of the relieved (the controversy is “of im- able sufficient him to and entitled receive premiums mediacy reality”). rejected disability payments. Aetna opinion Supreme most recent Aetna, 237-39, See claims. declaratory-judgment jurisdiction 461. But instead of Haworth’s 57 S.Ct. gloss. adds a patent Medlmmune to challenge rejec- suit Aetna’s bringing licensee, royal- who had continued pay to tion, filed an action for declara- Aetna ties for the patent, brought use of a declar- tory judgment that Haworth was not atory-judgment patent action the had policies and that his there- disabled patent holder to whether determine the lapsed nonpayment. Reversing for fore was invalid or unenforceаble. at 549 U.S. appeals, Supreme the the court Court 121-25, appeared 127 764. What to S.Ct. that there was to hear held missing requisite in the case was the noted, by As a suit the case. the Court immediacy little was likelihood —there disability for currently payable Haworth patent bring the would holder ever suit have undoubtedly would benefits licensee, because the licensee 243,

justiciable. Id. at 57 S.Ct. 461. royalties. continuing pay was Never- controversy Yet “the character of theless, Supreme Court that there held issue and of the to be determined is es- was actual case or because present- it is sentially the same whether payment was royalties licensee’s by the insurer.” ed insured looming “coerced” by the threat of 244, at 57 fact of S.Ct. having pay damages licensee’s treble was “a definite disability Haworth’s patent it halted and the was payments 461, fact,” 243, id. 57 S.Ct. and the ultimately upheld. Avoidanсe of such di- positions adopted “adverse very purpose lemmas of the De- “was existing respect to their obli- with 129, claratory Act.” Judgment Id. at (em- gations.” Id. 57 S.Ct. 461 added). Aetna, said, phasis it should not As and Medlmmune illustrate to wait until Haworth sued Aetna because juris- declaratory-judgment facts could be lost the breadth of evidence current diction, Supreme Court decisions dismiss- tion Act. But it refused to consider wheth- ing such actions best illustrate the limits er the questions asked on the registration procedure. We summarize several of forms proper. were Noting that the forms those decisions. registrants advised government regu- lations allowed them apply for waivers

Perhaps simplest case rejecting ju- of inappropriate or unduly burdensome re- Zwickler, risdiction is Golden 394 U.S. quirements, (1969). said: “Since petitioners 89 S.Ct. L.Ed.2d 113 have made no attempt Zwickler determine which challenging questions the constitutionality of a must be answered and how New York prohibiting law the distribution much disclosed, information this issue is anonymous literature in connection with not ripe adjudication.” Id. at an election campaign. But the candi- Rusk, S.Ct. 919. And in Zemel v. date whom Zwickler wished to criticize (1965), L.Ed.2d 179 anonymous literature was a candidate for Court refused to consider Zemel’s claim ‍​​‌​​​​‌‌‌​​​‌​‌‌​‌​‌‌​‌​‌​‌​‌‌​‌​​‌‌‌​‌‌​‌​​‌‌‌‍Congress placed who had been on the that he was constitutionally entitled to Supreme state the time of the travel to Cuba. explained The Court that it argument before the United States Su- would need to know the specifics of the preme Court. The Court said that “the travel: fact that it was unlikely most The complaint filed this case does not Congressman again be a candidate specify the sort of appel- travel to Cuba Congress precluded a finding that lant has in e.g., plans whether he mind — there was immеdiacy ‘sufficient and reali- ” proceed directly to Cuba or travel ty’ to present a controversy. case or there via one or more other countries. rejected 89 S.Ct. 956. It the notion Nor can we tell from papers filed the importance of the constitutional will, the Government in the jurisdiction, sufficed to confer stat- event appellant journeys Cuba, ing: “It enough was not to say, as did the 215(b) charge him under with Court, leaving District that nevertheless Zwickler the United a States on carrier has a bound for ‘further and far broader to a Cuba with a general adjudication passport not validated of unconstitutionality Cuba; leaving his own interest the as well as that United States of others with who would with such a anonymity passport like with the practise intent of travel- ” speech free in a political ing environment.’ home; Cuba before he returns 109-10, (alterations Id. at 89 S.Ct. 956 leaving the United States with such a omitted). “The question,” constitutional it passport journey on a which in fact explained, be presented “must in the con- Cuba; takes him to re-entering the text a specific grievance.” live Id. at United States with passport such a after 110, added). 89 S.Ct. 956 (emphasis Cuba; having visited some other act—or it will charge him at all.

Two cases concerning foreign policy il- Whether each or gradations these lustrate the need for the facts to mature of fact or charge would before make a differ- jurisdiction ence as liability arises. In to criminal is an Rabinowitz v. issue on Kennedy, 376 605, 919, U.S. the District wisely S.Ct. L.Ed.2d 940 took no (1964), the position. Court held that petitioner the Nor do we. For if we are to attorneys were not exempt registra- avoid rendering a series of advisory tion under Foreign the Agents Registra- opinions, adjudication of the reach and 215(b) presented. Id. at 65 S.Ct. 298. must аwait was constitutionality of that “the constitution- explained The Court fact situation. a concrete ality legal significance of the Act is without 19-20, 85 S.Ct. Id. at justiciable question un- and can involve no Moreover, if all the relevant even recovery until seeks [Coffman] less and are legal issue regarding particular facts only if royalties, the and then [Breeze] knowable, a court does not known the Act a defense.” Id. at relies on the issue unless to resolve complaint merely 65 S.Ct. 298. The dispute having specific arises in a advisory opinion “an as to the valid- sought consequences. real-world Coffman recovery of the defense to a suit for ity Inc., 316, 65 Corporations, Breeze royalties.” the (1945), L.Ed. 264 the Court could have made such a defense [Breeze] declaratory-judgment action considered appear does not to have done so but constitutiоnality of the the challenging accounting suit and not pending the does Coffman, Act. Adjustment Royalty validity assert its here. The bill of com- prede Breeze’s patent, licensed owner of any ground thus fails to disclose plaint device at a 6% patented cessor to sell any question for the determination of id. at 65 S.Ct. royalty. See fact which could be the basis of a law or entered into contract Breeze then adjudicating rights judgment See government. device to the supply the permit parties. Act Royalty Adjustment id. royalty to reduce the government

ted when it de products purchased rate Bank, Similarly, Peoples Eccles v. unreasonable; rate was that the termined (1948), 92 L.Ed. 784 products licensee who sold declaratory-judgment action held that a pay not the excess was government sought Bank to chal- licensor, ripe. charge was could not royalty to on its member- excess, lenge imposed a condition and was government for System that in the Federal Reserve patent ship from the against suit protected by Trans- 319-20, ownership of its stock 65 S.Ct. 298. restricted See id. at holder. acquired could, however, Corp. america Transameriea recover The licensor of stock but for invest- by suing the United few shares unpaid royalties ment, any control over the not to obtain 65 S.Ct. 298. The States. See id. Bank, membership royalty rate which was what had reduced the government See id. at prevent. or condition was meant to and had owed Breeze Coffman 430-31, Apparently, the con- 68 S.Ct. pay the excess dered Breeze that caused the Bank to file suit was cern Treasury. See id. at Deposit Corpo- Federal Insurance action that the ‍​​‌​​​​‌‌‌​​​‌​‌‌​‌​‌‌​‌​‌​‌​‌‌​‌​​‌‌‌​‌‌​‌​​‌‌‌‍separate had Coffman that if the Bank lost its ration had said accounting for an fоr against Breeze not in- membership, deposits its id. The suit before royalties owed. See id. at 68 S.Ct. 641. of unconsti sured. See When sought a declaration the Court however, the Bank Adjustment brought, Act suit was tutionality Royalty actuality need [its] failed to show “[t]he under that Act that and of the order of rights.” Id. at royalties [its] to the Trea a declaration pay Breeze excess added). 321-22, But 68 S.Ct. 641 sury. 65 S.Ct. 298. See id. had “disavow[ed] Federal Reserve Board to resolve the constitu the Court refused the Bank’s mem- any action to terminate no case or tional issue because bership” existing Supreme under the circumstances. therefore held that Id. As Court described suit: lower courts had improperly considered case, saying: “The disagreement must Bank seeks declaration of its

[T]he not be contingent nebulous or but must if it rights independence should lose its have taken on fixed and final shape so that Transamerica], or if the [from Board of a court can legal see what it issues is policy Governors should reverse its deciding, what effect its decision will have seek though to invoke the condition even adversaries, on the and some pur- independent the Bank remains useful pose to be achieved deciding them.” Id. then the Directors of the Federal De- added). 73 S.Ct. 236 (emphasis posit Corporation Insurance should not The case before it fell far short: change grant their not to deposit insurance to Bank as a non-member The complainant in this case does not System. the Federal Reserve request adjudication that it has a view, the Court’s “The concurrence do, have, or to anything par- events, contingent necessary these ticular. It does not judgment ask a realized, injury to be speculative too the Commission is power without to en- warrant аnticipatory judicial determina- ter any specific order any or take con- concluded, tions.” Id. It “[The] Bank’s regulatory crete step. It simply seeks grievance here is too remote and insub- that, conducted, establish presently stantial, nature, speculative too justi- carriage goods [its] points between fy injunction the Board of within as well as without Utah is all Governors, and equally inappro- therefore interstate commerce. naturally One priate for a rights.” declaration of asks, so what? 434, 68 S.Ct. 641. The Bank’s desire to added). Id. (emphasis The Court made rid itself of an obnoxious condition on its clear that generally one bring cannot System Federal Reserve membership was just to resolve enough jurisdic- itself to support one isolated in possible future con- tion. troversy. A declaratory judgment early Another holding decision practical would not have consequences there nowas to hear a declara- without later additional litigation is not tory-judgment action was Public Service proper. The Court wrote: Wycoff, Commission Utah v. Wycoff L.Ed. 291. The carrier’s idea seems to alleged that he engaged in “a can now major course of establish the premise of importing, processing transporting an exemption, not as an any incident of picture film and newsreels” and that their declaration of specific right “carriage points in between Utah immunity, was so but to hold in readiness for integrated with their interstate movement use should the Commission at future that the whole constituted interstate com- attempt apply time any part of a merce,” subject which was not to regula- complicated regulatory statute to it.... by tion the Commission. Id. at If there is risk of suffering penalty, S.Ct. 236. found, The trial court liability how- proseсution, or which a declara- ever, that the Commission had not avoid, inter- tion would it is pointed not out to fered or threatened to interfere with the us. If and when the State Commission within-state transportation of the materi- takes some action that raises issue of als. See at id. 73 S.Ct. 236. The power, its some declaration further prisoner termination necessary complete to re- was [of would be sought ... to entitled habeas was in relief] this lief. Instead, prisoner] action. [the carved out 245-46, (emphasis S.Ct. 236 add- Id. whether, that only question ed). up: summed “[W]hen The Court relief, when he sought habeas California ultimate determination request is not for governed by [special provisions would be findings and rights preliminary but for fortify litigant qualify].” for which intended to the State must conclusions Id. it a regulation, future would be Coffman, in prisoner] As here [the seeks rare in the relief case should a declaratory judgment validity as 246, 73 S.Ct. granted.” Id. at not, may, may of a the State or defense prec- The followed these Supreme Court raise in a proceeding. habeas Such a rejecting recent decision edents its most merely suit does not allow resolution jurisdiction. declaratory-judgment Cal- controversy’ of a ‘case in an or alterna- Ashmus, deron v. 118 S.Ct. Aetna, format, tive as but at- rather (1998), a 140 L.Ed.2d California tempts gain litigation advantage prisoner bring ac- sought state a class obtaining ruling an advance affir- establishing tion that State had not mative Any judgment defense.... qualify conditions to for cer- satisfied the this action thus would not resolve the procedural advantages tain ha- federal entire controversy case or as to any by the Antiterror- litigation provided beas [prisoner], merely but would determine Death Act of Penalty ism and Effective legal governing collateral cеrtain prisoner particular, 1996. In wished to aspects of pending their or future suits. prisoners that were entitled to establish one-year the ordinary period limitations Id. at 118 S.Ct. 1694. The Court said actions, bringing federal habeas rather that the it case before “illustrates need 180-day period than apply prevent litigants federal-court statutory if the met the State conditions. seeking by declaratory judgment to liti- ruled that Ninth Circuit “the case-or- gate single issue in a must controversy requirement was satisfied ... complete aivait another lawsuit resolu- because the State’s threats [the invoke 748,118 tion.” S.Ct. 1694 180-day period] significant- limitations will added). ly plaintiff-class’s ability affect the to ob- Turning to the case before this tain review corpus habeas a federal court, there appears to have been nec (internal court.” 118 S.Ct. 1694 essary controversy” “actual when Colum omitted). quotаtion marks But the Su- initially bian filed suit. A claim had been preme rejected the view that this officer, made a Columbian legal properly issue could characterized initially coverage. disclaimed “controversy.” “underlying ‘con- controversy But the actual must exist not troversy’ petitioners and [the between only filed; at the is complaint time that the said, prisoner],” prison- [the “is whether it must continue until the district court is to federal habeas er] entitled relief set- declaratory judgment. issues its aAs ting or aside his sentence conviction ob- leading presence “The treatise states: of a tained in the California courts.” Id. at controversy at the must be measured time 1694. It was not proper enough the court It acts. there limit issue, may important, in one however “final action was controversy. subsequent No de- commenced conclusive controversy, Perhaps may an claim put have end to the cation. some still events the as- But we cannot opposing party specif- or if the disclaims arise. know now the countervailing rights.” 10B to of ic facts relevant As in sertion indemnification. R. Zemel, Arthur Miller & Wright, predi- Alan and Charles Rabinowitz the factual Kane, Kay Federal Practice and Mary for a claim cate indemnification (3d 2757, 1998); ed. at 495-96 permit judicial Procedure to too uncertain interven- Steed, Prier v. 1213 tion; see claim no has “taken fixed on (10th Cir.2006) (“Actions the Declar- under shape.” Wycojf, final U.S. comport Act with atory Judgment must And, Eccles, in Coffman, S.Ct. 236. as principles as other the same mootness Wycojf, parties the issue that the wish us suit,” deter- question [in crucial “[t]he may resolve be irrelevant future granting mining is whether mootness] instance, dispute because, poli- other — determination of offered the issues cy may provisions require or disallоw in- in real will have some effect the world.” (The parties may demnification. even quotation and internál marks (ellipses that, agree provi- based on those other omitted)). sions, is or coverage they there is not —as ultimately agreed that there was by in is that problem this case McGowan.) against for the claim A decla- judgment, the time of Banclnsure had rights ration in this case would not Policy only the the agreed covered complete provide party relief to in either an in against claim had been made the of a future against event Colum- sured, against the claim Columbian former sought bian for which it indemnification McGowan. Absent another identifi officer Calderon, from Banclnsure. As in stated Columbian, against able claim there was to prevent we “need liti- federal-court no actual to be resolved the gants seeking by declaratory judg- declaratory-judgment action. litigate single ment to issue in a issue that the parties wish this await that must another lawsuit for com- court to resolve boils down to notice plete resolution.” 523 U.S. at given by of a claim must be an insured for will party S.Ct. 1694. We not allow a obligation Banclnsure have indem- gain invoke our simply “to nify it loss. asserts litigation advantage by an ad- obtaining notice given must have been within 30 ruling vance on an affirmative defense” or days receivership. the initiation element its cause of action. The Insureds contend that notice could be This is not a case in given up days to 30 after expiration present- legal resolution (which, original term of the policy per- ed an im- “requiref ] further). haps, could be But extended significant [par- mediate and change in Supreme Wycojf, Court asked “so conduct of their ties’] affairs.” Abbott what?” 344 73 S.Ct. 236. Gardner, Labs. v. “useful purpose What achieved [would] 1507,18 (1967). L.Ed.2d 681 deciding” this issue? From what the sure, presented us, have question mat- To posed practical consequence ter of is whether parties might be characterized as indemnify ‍​​‌​​​​‌‌‌​​​‌​‌‌​‌​‌‌​‌​‌​‌​‌‌​‌​​‌‌‌​‌‌​‌​​‌‌‌‍Banclnsure will Columbian Policy when the receiver- terminated instituted, a liability they claim. But ship was and Aetna Su- to identify any they failed claim which preme jurisdic- held that there was disagree regarding to indemnifi- tion to hear

1383 (D.Md.1995) 454, F.Supp. (coverage 458 life-insur- Haworth’s regarding inBut dispute regarding ripe still in force. claims was were future policies ance claim, filed a formal Haworth had establishing Aetna the salient facts “[a]ll because occurred, and the facts had relevant all right declaratory already to relief ha[d] immedi- judgment would have declaratory occurred,” injured several third won, If Ha- consequences: he practical ate claims, had submitted and settlement ne- receive disаbili- be entitled to worth would gotiations injured parties with seven had paid to and have a be ty payments Dowdy’s T.H.E. v. begun); Ins. Co. and Aetna policies; value of his the cash Park, 238, 240 F.Supp. Amusement 820 require- won, relieved of the it would be (suit (E.D.N.C.1993) had not been filed maintaining respect a reserve with ment insured, injured party but had re- Here, party neither has policies. attorney gave tained who insurer notice of consequence such asserted claim; pursue intent to failure to resolve necessarily result from our decision. coverage would affect settlement discus- suggested Banclnsure has not particular, claims); investigation sions State would affect what reserves that a decision Sampson, Farm Mut. Auto. Ins. Co. v. 305 maintain; legally required to it would be (M.D.Fla.1969) (lack 50, F.Supp. 52 of a has not asserted that Ban- and Columbian injured pending claim was not a required Columbian position has clnsure’s jurisdiсtion barrier to because was “obvi- that it be- coverage insurance purchase pending ous that suit imminent [was] Ban- already provided by the lieved to be litigation”); outcome of this Manhattan policy. clnsure v. Fire & Marine Ins. Co. Nassau Estates us, has cited to nor has party Neither (D.N.J.1963) II, F.Supp. (ju- 217 198 discovered, any declaratory- our research though injured par- even risdiction court to con- judgment action federal ty yet had not sued insured because the liability-insurance coverage strue “on actual of the occur- insurer was notice has failed to in which the insured accident, severity of the and of the rence potential claim or identify specific injuries,” and could other- insurer True, injured party may against it. put unnecessary to an wise be burden See, e.g., yet not have sued the insured. accident). But Union investigating cf. Dynamics v. Aetna Cas. & Sur. Co. Gen. Inc., Group, 465 Ins. Cо. v. Soleil Cir.1992) (8th F.2d Corp., 968 (insur- (D.S.C.2006) F.Supp.2d. 573-75 though insured (jurisdiction present even cannot be determined duty er’s defend yet respect sued with had not been can complaint allegations until filed so that claims because insured several Georgia compared policy language); payment “had made clear demand Johnson, F.Supp. Am. Ins. Co. indemnity costs” and insurer defense (insurer’s (S.D.Miss.1989) declaratory- demands”); Firemen’s “disputed those premature action was because judgment Repair, v. Kline Son Cement Ins. Co. & injured father of had not filed insured (E.D.Ya.2007) Inc., F.Supp.2d “only suit insured and it was con- (court declaratory-judg- had jecture as to whether suit w[ould] by insurer even ment action filed”); Drug, AMCO Ins. Co. v. Western yet been sued be- though insured had (D.Ariz. Inc., Sept. *2 2008 WL pursuing a injured party cause had been 2008) (declaratory-judg- (unpublished) claim, and facts relevant dismissed; attorney had insurer); ment insured and stipulated Md., Icarom, threatening insured a letter civil Cnty., 904 written PLC v. Howard filed, passed complaint existed when the ex- suit, year than had with- was but more negotiations plaining: and no settlement out suit underway).

were complaint AGL filed its before insur- companies ance received the notice of qua non is identifiable But the sine potential liability AGL mailed to them that has risen above the specific claim previous day. only The insurers not v. Alumi- Corp. horizon. Olin Consol. Cf. respond had no chance to no- AGL’s (2d Cir.1993) 10, 17 5 F.3d Corp., num filed, complaint they tice before the was (declaratory-judgment action to determine knowledge had no that notice had been of hazardous-waste site seller given. It is to under- indemnify buyer for environmental must therefore difficult stand how could AGL assert that liability arising from sites owned third companies insurance to de- from site purchased where waste failed indemnify its cleanup of; ripe disposеd was because fend MGPs when the insurers had taken no any pend- “no mention of the record made position regard time with claim as to third- ing environmental policies. their duties under AGL’s To site”); party Barge Am. Commercial Line claims, support complaint its AGL’s as- (In v. Monsanto Co. re Am. Commer- Co. serts the defendant insurers (8th Lines, Inc.), cial 781 F.2d similar denied utilities under Cir.1985) (plaintiff declaratory sought similar circumstances in the past. judgment barge that defendant company essence, complaint AGL filed its as an indemnify it if plaintiff must was held lia- anticipatory designed maneuver injuries third-party stemming ble for from preempt whatever actions the insurers accident; barge controversy no actual be- may they have taken after received no probability” cause “substantial that a AGL’s notice. brought against claim plaintiff). Regardless of how well-founded Moreover, even a claim cаn be identi- may AGL’s concerns about its insurers fied, there must be a disagreement about been, speculation in- based on the coverage. The decision in Atlanta Gas companies’ dealings surance with other Co., Light Casualty Co. v. Aetna Surety & insureds does not a concrete (11th Cir.1995), 68 F.3d 409 is illustrative. controversy. case or At the time the (AGL) Atlanta Light Company Gas filed a filed, complaint was AGL could claim declaratory-judgment action “to determine injury neither actual nor threatened re- liability extent of its insurers’ for envi- conduct, sulting from the insurers’ nor cleanup arising ronmental costs any injury traceable to the insurance gas twelve its former manufactured companies sought at all. When AGL plants.” day Id. at 411. filing before guidance through the court’s a declara- declaratory-judgment action, AGL had tory judgment, presented the issues it sent notice to 23 insurers of their conjectural no more than questions were liability cleaning up for costs of its former based on the fact that other utilities had notice, sites. See id. At the time of this battled with ... cleanup insurers over however, no one had filed costs.

AGL, any government agency nor had or- clean-up. added); dered a And the insurers had Id. at 414-15 see Solo Co., position taken no on their duties Cup under the Co. Fed. Ins. (7th Cir.1980) (“The

policies brought. possibility should future claims be mere The court controversy proceedings might held no actual be commenced an act of the between the regarding against an insured might judgment the insurer was entered and that the district as to which insured’s to create coverage, jurisdiction. is not sufficient contest court therefore lacked meaning of the controversy within the parties recognize We that both con Article III of Declaratory Judgment Act or jurisdiction tend that the district court had added)); the Constitution.” cf. judgmеnt. They its apparently to enter Indiantown Co. v. Caulkins Fire Ins. U.S. judicial Policy desire a construction of the (11th Co., 744, 747-49 Citrus meaning “coverage of regarding shall Cir.1991) (settlement in agreement and, §in X.E perhaps, regarding cease” indemnify to agreed defend insurer right purchase an insured’s to extended jurisdiction court over deprived insured But, after a coverage receivership. to re to construe in peat Supreme what the Court said Aet policy). na, an actual exists controversy in this The lack of an actual “hafye] positions taken adverse in even clearer than Atlanta Gas case is respect existing obligations.” to their with held that it In that case the court Light. at 461. The “obli enough that the insurers had de- was not gation” obligation issue here is the to in similar cases coverage allegedly nied provide coverage; long as there is no coverage to they had not denied because dispute that pro real Banclnsure would contrast, insurer, Here, in stark AGL. coverage any vide foreseeable claim Banclnsure, in coverage had conceded § of the IX.B language (provid because situation, only comparable claim 30-day grace a it is ing period), irrelevant former officer McGowan. The § whether X.E would or would not also parties provided no reason believe in coverage. meaning result of that deny coverage with re-

Banclnsure would provision would not affect Banclnsure’s spect any claim described the notices days “obligation.” to Banclnsure sent within 30 receivership, and no reason believe an insured would made IV. CONCLUSION

that was not described one of the no- and REMAND to the We REVERSE contrary, response tices. On the court with vacate district instructions to its interrogatories, Insureds’ Banclnsure stat- judgment. brought “by deposit ed that a claim insurance organization acting as receiver” GORSUCH, concurring. Judge, Circuit covered if “notice of Columbian I lack agree we for two rea- potential provided claim was to Ban- (30) First, sons. haven’t offered thirty days following within clnsure judicial suggesting evidence that a de- Period,” Policy ApltApp. the end of the resolving cision their would make stipulated it that it had received any difference to either of them. Unlike notice of FDIC claims written Aetna, example, Ac- the insurer in Bancln- days August within 30 argued requires judi- actual hasn’t that it cordingly, we hold that there was no sure jurisdic- did raise—the 1. We also note that even if we had And tion, meaning cessation-of-coverage we whether Colum- of ‍​​‌​​​​‌‌‌​​​‌​‌‌​‌​‌‌​‌​‌​‌​‌‌​‌​​‌‌‌​‌‌​‌​​‌‌‌‍the lan- would not address guage § purchase in X.E—is irrelevant to whether Co- bian had a extended cover- purchase age party аppealed lumbian is entitled to extended cov- under II. Neither erage. this issue. district court’s refusal address the level of court to determine December district issued cial resolution maintain. 300 policy’s it must that the reserves declaration re- part, 461. For its Columbian mained in effect until its expiration stated fall- purchase that it had to hasn’t claimed May date But the time any other harm coverage or suffered back argument place, oral in this court took ’ cancellation purported due Banclnsure’s gone. date had come and And at oral fact, despite having policy. argument both sides conceded that no summary judg- fought past the matter during claims had been filed ment, party has shown harm neither they period disagreed and on which about suffered) (or suffering as a result of has obligations. Banclnsure’s insurance Nei- differing interpretations their contrаct parties —no ther have the suggested their opportunity, po- lost business no actual or any way in appellate briefs which a deci- distress, emotional expense, tential no sion this court about the propriety of sleepless night. even the risk of a Without declaratory judgment district court’s suggesting something a record is at stake make a difference to them now that litigants, the outcome of this suit for the policy period passed uneventfully. has controversy this case lacks a “substantial 28(a)(4)(B) 28(b)(1) P. RApp. See Fed. & immediacy reality of sufficient (requiring parties to set forth a factual declaratory judg- of a warrant the issuance establishing appellate jurisdiction); basis Medlmmune, Inc., ment.” U.S. Bustillos, United States v. course, hardly 764. Of this S.Ct. (10th Cir.1994) (noting that sup- the “facts means we never have to settle porting jurisdiction must affirmatively until policy disputes insurance unless and alleged”). All this mеans that even losses are incurred or claims arise. No existed, live once plaintiff likely doubt a future could—and obligation failed their to show that it re- easily resulting could some harm —show now, mains live rather than having come from a disagreement about whether he gone, mooted march of time. (or liable) remains covered for future loss- so, parties’ failure to do their failure es, any putatively and do so well before a continuing basis for this insured loss or claim occurs. And under jurisdiction, appellate court’s stands Aetna a dispute “manifestly such would be independent dismissing basis for this case. susceptible judicial un- determination” Intenor, Wyoming Dep’t See v. der Article III because would call “for (10th Cir.2009). 1245,1254 F.3d adjudication present right upon es- tablished facts.” 300

461. The lack of a substantial imme- controversy

diate in this case is thus es-

sentially peculiar proof or, really, presented in

have— haven’t—

this case.

Second, there exists an even narrower why

reason this case must dismissed. Even assuming the district court had faced CUMMINGS, Plaintiff-Appellant, Dave justiciable Article III case granted summary when it judgment, any such dispute appears to have become moot

during pendency appeal. of this In WASHINGTON MUTUAL, Defendant,

Case Details

Case Name: COLUMBIAN FINANCIAL CORP. v. BancInsure, Inc.

Court Name: Court of Appeals for the Tenth Circuit

Date Published: Jun 21, 2011

Citation: 650 F.3d 1372

Docket Number: 10-3077

Court Abbreviation: 10th Cir.