Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-00960/USCOURTS-caed-2_13-cv-00960-2/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

RSUI INDEMNITY COMPANY,

Plaintiff,

v.

DISCOVER P&C INSURANCE 

COMPANY, DISCOVER REMANAGERS, et al.,

Defendants.

No. 2:13-cv-00960-TLN-EFB

ORDER

This matter is before the Court pursuant to the Ninth Circuit Court of Appeal’s Mandate. 

(ECF No. 31.) In this Court’s previous order, the Court was presented with a spilt in the 

California Appellate Courts as to whether an excess litigated judgment was a prerequisite for an 

equitable subrogation claim. Compare Fortman v. Safeco Ins. Co., 271 Cal. Rptr. 117 (Cal. Ct. 

App. 1990) (holding that an excess insurer’s equitable subrogation claim does not depend on the 

entry of an excess judgment to prove damages to the insured), with RLI Ins. Co. v. CNA Cas. of 

Cal., 45 Cal. Rptr. 3d 667 (Cal. Ct. App. 2006) (expressly rejecting Fortman). This Court 

concluded that RSUI Indemnity Company’s (hereinafter referred to as Plaintiff) claim for 

equitable subrogation against the primary insurer, Discover P&C Insurance Company and 

Discover Re-Managers Inc.’s (hereinafter collectively referred to as “Defendants”), was barred 

for a lack of a litigated excess judgment. In doing so, the Court followed the holding in Safeco 

Case 2:13-cv-00960-TLN-EFB Document 32 Filed 06/21/16 Page 1 of 2
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Insurance Company v. Superior Court, 71 Cal. App. 4th 782, 788 (1999), and thus determined 

that Plaintiff’s claim was barred. (Order, ECF No. 24.)

The Ninth Circuit Court of Appeals reversed this Court opining that “the rule announced 

in Fortman is more likely to be adopted by the California Supreme Court because it more 

faithfully applies California insurance law.” (Mem., ECF No. 31 at 5.) Consequently, this Court 

will follow Fortman, and Plaintiff has stated a claim upon which relief can be granted. As such, 

Plaintiff’s claim for equitable subrogation is hereby reinstated. 

The parties are thus ordered to meet and confer as to proposed dates for a revised 

scheduling order as to this case and to file a joint status report with this Court within thirty (30) 

days of the entry of this order.

IT IS SO ORDERED.

Dated: June 20, 2016

Case 2:13-cv-00960-TLN-EFB Document 32 Filed 06/21/16 Page 2 of 2