Court Opinion

ID: 4200255
Source: CourtListenerOpinion
Date Created: 2017-08-30 20:01:21.488136+00
Date Added: 2024-06-11T09:23:50.973696
License: Public Domain

NOT FOR PUBLICATION                           FILED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

                                           2
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.

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