Allied Professionals Insurance Co. v. Anglesey , 680 F. App'x 586 ( 2017 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
FEB 28 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
ALLIED PROFESSIONALS No. 15-55231
INSURANCE COMPANY, A Risk
Retention Group, Inc., an Arizona D.C. No.
corporation, 8:14-cv-00665-CBM-SH
Plaintiff-Appellant,
MEMORANDUM*
v.
MICHAEL SCOTT ANGLESEY, M.D.;
ELISEO GUTIERREZ; VERONICA
GUTIERREZ,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Consuelo B. Marshall, District Judge, Presiding
Argued and Submitted February 7, 2017
Pasadena, California
Before: THOMAS, Chief Judge, NGUYEN, Circuit Judge, and AMON,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Carol Bagley Amon, United States District Judge for
the Eastern District of New York, sitting by designation.
Allied Professionals Insurance Company (“APIC”) appeals the district
court’s dismissal for lack of standing of its complaint against Dr. Michael
Anglesey, his patient, Eliseo Gutierrez, and the patient’s wife, Veronica Gutierrez
(“Defendants”). We have jurisdiction under 28 U.S.C. § 1291, and we reverse and
remand. Because the parties are familiar with the history of this case, we need not
recount it here.
The district court erred by dismissing the case for lack of standing. APIC’s
complaint sought: (1) declaratory relief as to the rights and duties it owed to each
of the Defendants; (2) rescission of the 2012 and 2013 insurance policies; and (3)
compulsory arbitration of “all claims that Defendants may have against APIC in
any way arising out of or relating to the 2013 Policy or to Dr. Anglesey’s alleged
malpractice.” At oral argument, APIC clarified that the claims it sought to compel
were only for “rescission,” a declaration of the “assignability of the contract,” and
“coverage.” Therefore, we need not decide whether APIC lacked standing to bring
any claims other than those three identified by APIC at oral argument.
For an insurer to have Article III standing to pursue a declaratory judgment
that a policy was not in effect, the insurer need only “allege it was threatened with
injury by virtue of being held to an invalid policy.” Government Employees Ins.
Co. v. Dizol, 133 F.3d 1220, 1222 n.2 (9th Cir. 1998) (en banc). In addition, an
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insurer has standing to seek declaratory relief in a coverage dispute with its
insured. “Indeed, we have consistently held that a dispute between an insurer and
its insureds over the duties imposed by an insurance contract satisfies Article III’s
case and controversy requirement.” Id. (first citing American Nat’l Fire Ins. v.
Hungerford, 53 F.3d 1012, 1015–16 (9th Cir. 1995); then citing Am. States Ins. Co.
v. Kearns, 15 F.3d 142, 144 (9th Cir. 1994)).
Here, Anglesey tendered defense of the malpractice action asserted against
him to APIC, and it denied coverage. This denial created an actual dispute
between APIC and Anglesey as to whether coverage existed under the policy.
APIC therefore possessed Article III standing to pursue its declaratory judgment
action.1 For the same reason, APIC had standing to bring a claim against Anglesey
for judicial rescission of the insurance contract. See Sec. Life Ins. Co. of Am. v.
Meyling, 146 F.3d 1184, 1191 (9th Cir. 1998) (noting that federal courts have
routinely identified a right to pursue insurance rescission).
Relatedly, because APIC had standing to bring claims for declaratory relief
and rescission against Anglesey, APIC also had standing to seek to compel
1
Indeed, we note that the insured and the underlying plaintiffs have filed a
declaratory relief action in Washington. It would certainly be an odd result to hold
that the insurer lacked standing to pursue the very declaratory relief sought by the
insured and underlying plaintiffs.
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Anglesey to arbitrate those two claims. See 9 U.S.C. § 4 (authorizing a United
States district court to entertain a petition to compel arbitration if the court would
have jurisdiction, “save for [the arbitration] agreement,” over “a suit arising out of
the controversy between the parties”); Int’l Bhd. of Elec. Workers, AFL-CIO Local
1245 v. Citizens Telecomms. Co. of Cal., 549 F.3d 781, 788 (9th Cir. 2008)
(explaining that refusal to arbitrate is “an invasion of a legally protected interest”
for purposes of Article III).
However, our conclusion that APIC had standing to bring claims for
declaratory relief and rescission against Anglesey does not end the inquiry, because
we must also consider whether APIC had standing to bring those claims against the
Gutierrezes, as Anglesey’s putative assignees. Defendants argue that the risk
APIC would be sued by the Gutierrezes as Anglesey’s assignees was not
sufficiently imminent to create an injury in fact at the time APIC filed this case
because, in the underlying tort case between Anglesey and the Gutierrezes, the
settlement assigning Anglesey’s claims against APIC to the Gutierrezes had not yet
been approved by the court. However, we conclude that the risk of a lawsuit from
the Gutierrezes was sufficiently imminent to satisfy Article III because, according
to APIC’s complaint, APIC and Anglesey had entered into and sought court
approval of a settlement assigning his claims to the Gutierrezes, and Anglesey’s
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attorney had notified APIC that Defendants intended to execute a consent
judgment whereby the Gutierrezes would agree to not execute the judgment against
Anglesey, but instead seek to recover from APIC. See Susan B. Anthony List v.
Driehaus, 134 S. Ct. 2334, 2341, 189 L. Ed. 2d 246 (2014) (“An allegation of
future injury may suffice if the threatened injury is ‘certainly impending,’ or there
is a ‘substantial risk that the harm will occur.’” (quoting Clapper v. Amnesty Int’l
USA, 133 S. Ct. 1138, 1150 n.5 (2013)). Indeed, this risk of imminent harm came
to fruition when Defendants’ settlement was later reinstated and approved by the
Washington court.
The parties assert other theories and highlight other issues involved in this
case, as well as in the related litigation in Washington. However, we need
not—and do not—reach any of those questions. The only question before us is
whether the insurer had Article III standing, which it did.
REVERSED AND REMANDED.
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