Court Opinion

ID: 4149089
Source: CourtListenerOpinion
Date Created: 2017-02-28 21:01:07.884689+00
Date Added: 2024-06-11T07:46:29.216028
License: Public Domain

NOT FOR PUBLICATION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

                                            4
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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