This disposition is not appropriate for publication and is not precedent *

except as provided by 9th Cir. R. 36-3.

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

XL SPECIALTY INSURANCE

COMPANY

 Plaintiff - Appellee,

 v.

PROGRESSIVE CASUALTY

INSURANCE COMPANY

 Defendant - Appellant,

 and

DARRELL E. BOWMAN, PATROL

HELICOPTERS, INC.; et al.

 Defendants.

No. 10-35057

D.C. No. CV-08-73-BU-RFC-JCL

MEMORANDUM *

XL SPECIALTY INSURANCE

COMPANY

 Plaintiff - Appellant,

 v.

No. 10-35066

D.C. No. CV-08-73-BU-RFC-JCL

FILED

JAN 20 2011

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
The Honorable David Alan Ezra, United States District Judge for the **

District of Hawaii, sitting by designation.

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PROGRESSIVE CASUALTY

INSURANCE COMPANY, et al.

 Defendant - Appellees.

Appeal from the United States District Court

for the District of Montana

Richard F. Cebull, Chief District Court Judge, Presiding

Argued and Submitted December 7, 2010

Seattle, Washington

Before: O’SCANNLAIN and TALLMAN, Circuit Judges, and EZRA, District ** 

Judge.

This case arises out of a fatal accident between a passenger vehicle and a

fuel truck, owned and operated by Patrol Helicopters, Inc. (“Patrol”) and insured

by Progressive Casualty Insurance Company (“Progressive”). The truck was en

route to refuel a helicopter owned by Patrol and insured by XL Specialty Insurance

Company (“XL”). XL brought a declaratory judgment action in district court to

determine whether its policy covered Patrol’s liability on the underlying accident. 

Progressive and Patrol filed counterclaims seeking coverage under XL’s policy. 
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All parties moved for summary judgment before Magistrate Judge Jeremiah C.

Lynch.

The magistrate judge found that XL’s policy covered the accident and XL

was not prejudiced by any late notice given by Patrol. The magistrate judge also

determined, however, that Progressive’s counterclaim seeking coverage was, in

effect, one for equitable contribution under Montana law and that the “selective

tender rule” barred Progressive from seeking equitable contribution from XL. 

Chief District Court Judge Richard F. Cebull adopted the magistrate judge’s

Findings and Recommendations. All parties appealed. We have jurisdiction under

28 U.S.C. § 1291 and we affirm. 

The Montana Supreme Court has adopted a specific test to determine

whether a policy provides coverage when the insurance contract states that

coverage “arises out of” the ownership, maintenance or use of an instrumentality. 

Specifically, a court should consider whether the injury “originate[s] from, or

grow[s] out of, or flow[s] from” the insured entity. Wendell v. State Farm Mut.

Auto. Ins. Co., 974 P.2d 623, 639 (Mont. 1999). According to the Wendell court,

this test is satisfied if the insured instrument is “a prime accessory, without which

the injury-producing incident or the severity of the injuries would not have

occurred.” Id. In adopting this test, the court “align[ed] [itself] with those
4

jurisdictions adopting an expansive . . . interpretation of the [arising out of]

phrase.” Id.

Here, XL’s policy provided coverage for any accident “arising out of the

ownership, maintenance or use of the aircraft.” The fuel truck involved in the

accident was en route to refuel the helicopter. Although not involved in the

accident itself, the helicopter was “a prime accessory, without which the injuryproducing incident” would not have occurred. Id. The injuries therefore

originated from, grew out of, and flowed from the maintenance of the aircraft. See

id. We consequently hold that the district court did not err in determining that

there was coverage under the XL policy per Montana law. Cf. Georgeson v.

Fidelity & Guar. Ins. Co., 48 F. Supp. 2d 1262, 1267 (D. Mont. 1998) (finding

coverage under a utility truck’s “arising out of” insurance policy when another

vehicle hit the truck and hooked a cable to which both the truck and the underlying

claimant working on a telephone poll were attached); Fire Ins. Exch. v. Tibi, 51 F.

Supp. 2d 1065 (D. Mont. 1995) (finding coverage under a vehicle’s “arising out

of” insurance policy when a firearm discharged while unloading the vehicle).

The district court also appropriately determined that XL was not prejudiced

by late notice. Montana has adopted a “no prejudice” rule, which states that in the

absence of “some showing of material prejudice to the underinsurance carrier, a
Although Sorenson dealt with underinsurance coverage and the instant case 1

deals with third party liability insurance, we agree with the district court that

Montana courts would apply the Sorenson test here. See In re Kirkland, 915 F.2d

1236, 1239 (9th Cir. 1990) (“[A] federal court must predict how the highest state

court would decide the issue using intermediate appellate court decisions, decisions

from other jurisdictions, statutes, treatises, and restatements as guidance.”).

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claim for underinsured motorist coverage may not be precluded on a technicality.”

Sorenson v. Farmers Ins. Exch., 927 P.2d 1002, 1004 (Mont. 1996); see also Lee v.

Great Divide Ins. Co., 182 P.3d 41, 45 (Mont. 2008); Augustine v. Simonson, 940

P.2d 116, 119–20 (Mont. 1997).1

XL was given notice of the accident four months before the underlying suit

went to trial. XL has not, however, demonstrated it suffered any prejudice. Its

argument that it could have convinced the underlying claimants to settle for less

than Progressive’s policy limit of one million dollars is without merit; as is the

contention that it was denied a meaningful opportunity to participate in the defense

at the underlying trial. This is especially so in light of the fact that it declined to

participate in the defense and also received a significant amount of pre-trial

discovery from Progressive and Patrol. Cf. Lee, 182 P.3d at 45 (finding prejudice

based on an insurers showing that the “most significant information concerning

this claim and suit was omitted from . . . [the] notice”). 
6

The district court was also correct in determining that Progressive could not

recover from Patrol. First, Progressive’s counterclaim was, in effect, one for

equitable contribution. Montana courts “look[] to the gravamen of the action

rather than relying on the label given to the claim by the plaintiff.” N. Mont. Hosp.

v. Knight, 811 P.2d 1276, 1278 (Mont. 1991). Equitable contribution “permits an

insurer, which has paid a claim, to seek contribution directly from other insurers

who are liable for the same loss. . . . [I]t is applied in those cases where an insure[r]

discharges a common obligation of another insure[r].” Cas. Indem. Exch. Ins. Co.

v. Liberty Nat’l Fire Ins. Co., 902 F. Supp. 1235, 1237, 1238 & n.3 (D. Mont.

1995); see also Mut. of Enumclaw Ins. Co. v. USF Ins. Co., 191 P.3d 866, 872

(Wash. 2008) (“In the context of insurance law, contribution allows an insurer to

recover from another insurer where both are independently obligated to indemnify

or defend the same loss.”).

Given that Progressive’s claim was one for equitable contribution, it was

barred by the “selective tender rule.” This rule states that for two insurers to have

a common obligation “the insured, or someone on the insured’s behalf, [must]

tender[] the defense of an action potentially within the policy coverage.” Cas.

Indem., 902 F. Supp. at 1238. In other words, “the obligation of an insurer to

provide a defense is ‘triggered’ when the insured, or someone at the direction of
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the insured, tenders the defense[.]” Id. at 1239 (citation omitted); see also Mut. of

Enumclaw, 191 P.3d at 873 (defining the selective tender rule as the “rule [that]

states that where an insured has not tendered a claim to an insurer, that insurer is

excused from its duty to contribute to a settlement of the claim” (citing Cas.

Indem., 902 F. Supp. at 1239)).

There is insufficient evidence here to demonstrate that the claim had been

tendered from Patrol to XL. At most, Patrol sent informal emails to XL requesting

a determination of whether coverage existed under the XL policy. This does not

rise to the level of an affirmative request for assistance, especially because Patrol

had already tendered the claim to Progressive more than a year earlier. We

therefore hold that the district court did not err in reaching this conclusion.

AFFIRMED.