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

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 30 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ST. LUKE'S HEALTH SYSTEM, LTD.; No. 15-35767
ST. LUKE'S REGIONAL MEDICAL
CENTER, LTD., D.C. No. 1:14-cv-00475-BLW
Plaintiffs-Appellees,
MEMORANDUM*
v.
ALLIED WORLD NATIONAL
ASSURANCE COMPANY; ALLIED
WORLD SPECIALTY INSURANCE
COMPANY,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Idaho
B. Lynn Winmill, Chief Judge, Presiding
Submitted August 28, 2017**
Seattle, Washington
Before: HAWKINS and McKEOWN, Circuit Judges, and ROTHSTEIN,***
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Barbara Jacobs Rothstein, United States District Judge
for the Western District of Washington, sitting by designation.
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
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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., 647 P.2d 754, 756 (Idaho
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., 66 P.3d
242, 245 (Idaho 2003).
AFFIRMED.
3