Court Opinion

ID: 4198078
Source: CourtListenerOpinion
Date Created: 2017-08-22 20:01:25.015837+00
Date Added: 2024-06-11T07:47:30.871240
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       AUG 22 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

ALASKA INTERSTATE                               No.    15-35973
CONSTRUCTION, LLC,
                                                D.C. No. 3:14-cv-00126-RRB
                Plaintiff-Appellant,

 v.                                             MEMORANDUM*

CRUM & FORSTER SPECIALTY
INSURANCE COMPANY, INC.,

                Defendant-Appellee.

                   Appeal from the United States District Court
                            for the District of Alaska
                   Ralph R. Beistline, District Judge, Presiding

                      Argued and Submitted August 15, 2017
                               Anchorage, Alaska

Before: GRABER, CLIFTON, and M. SMITH, Circuit Judges.

      Alaska Interstate Construction, LLC (AIC) brought this action against its

insurer, Crum & Forster Specialty Insurance Company, Inc. (C&F), after C&F

denied AIC coverage for a claim it brought under its professional errors and

omissions (E&O) liability policy. The district court granted summary judgment

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
for C&F, and AIC appeals. We affirm the district court.

      C&F issued AIC an initial policy with a policy period of December 1, 2011,

to May 1, 2013, and then a renewal policy with a policy period of May 1, 2013, to

May 1, 2014. Both were “claims-made” policies; they limited E&O coverage to

claims made and reported during the “policy period,” which was defined as “the

period shown in the Declarations.” AIC concedes that a “claim,” within the

meaning of the policy, was made against it by VC Sellers Reserve, LLC on

January 10, 2013, during the initial policy period. AIC further concedes that it did

not report the claim until June 19, 2013, during the renewal policy period. The

district court held that C&F was entitled to summary judgment because the claim

was not made against AIC and reported to C&F during the same policy period, as

the policies required.

      Following Alaska law, we construe the policies “in such a way as to honor a

lay insured’s reasonable expectations [of coverage].” State Farm Mut. Auto. Ins.

Co. v. Dowdy, 192 P.3d 994, 998 (Alaska 2008). “Ambiguities in . . . insurance

policies are to be construed most favorably to an insured, but ambiguities only

exist when there are two or more reasonable interpretations of particular policy

language.” Id.

      AIC argues that the definition of “policy period” as “the period shown in the

Declarations” does not narrow “Declarations” to those in one specific policy, and

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thus “policy period” can reasonably be interpreted as encompassing both the initial

and renewal policy periods (i.e., December 1, 2011, to May 1, 2014). Under this

interpretation, AIC would have made and reported the claim within the single,

continuous policy period.

      AIC’s proposed interpretation of “policy period” is not reasonable.

According to the plain language of the policies, a claim must be made and reported

within a single policy period, as stated in the Declarations for a given policy. The

parties agree that the claim was made against AIC during the initial policy period

and reported to C&F about six months later, during the renewal policy period. An

insured cannot reasonably expect coverage under such circumstances.

      AIC’s citations to distinguishable, non-binding cases are unavailing. See,

e.g., Cast Steel Prods., Inc. v. Admiral Ins. Co., 348 F.3d 1298 (11th Cir. 2003);

Helberg v. Nat’l Union Fire Ins. Co., 657 N.E.2d 832 (Ohio Ct. App. 1995) (per

curiam). While it appears that Alaska has not addressed this issue, “most courts

that have confronted [this issue] have concluded that a renewal [of a claims-made

policy] does not extend the reporting period for claims made during the earlier

policy period.” Checkrite Ltd., Inc. v. Ill. Nat’l Ins. Co., 95 F. Supp. 2d 180, 194

(S.D.N.Y. 2000). AIC’s cited line of cases represents a minority view that has

been criticized. See, e.g, GS2 Eng’g & Envtl. Consultants, Inc. v. Zurich Am. Ins.

Co., 956 F. Supp. 2d 686, 693 n.11 (D.S.C. 2013) (finding Cast Steel

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“unpersuasive as it appears to have followed Helberg based on a generalized

notion of fairness, rather than based on analysis of the language in the policy

before the court”). We predict that Alaska would follow the majority position and

hold that, unless policy language provides otherwise, renewals of claims-made

policies generally do not extend claims reporting periods.

      AIC should not be granted an extended reporting period (ERP) after the

conclusion of the initial policy period. The policy provided an automatic 90-day

ERP for an insured when the policy “is canceled or not renewed by [C&F] for any

reason except non-payment of premium.” AIC argues that if the policies are

viewed separately for purposes of determining the “policy period,” then a policy

must be viewed as effectively canceled when its policy period ends, making the

automatic ERP applicable. However, the plain language of the policy states that

cancellation and non-renewal are the events that trigger the ERP. Thus, because

AIC renewed its policy, the ERP did not apply.

      AFFIRMED.

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