American Medical Response Northwest, Inc. v. Ace American Insurance , 526 F. App'x 754 ( 2013 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 15 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
AMERICAN MEDICAL RESPONSE No. 11-35956
NORTHWEST, INC. and AMERICAN
MEDICAL RESPONSE, INC., D.C. No. 3:09-cv-01196-JO
Plaintiffs - Appellants,
MEMORANDUM*
v.
ACE AMERICAN INSURANCE
COMPANY and NATIONAL UNION
FIRE INSURANCE COMPANY OF
PITTSBURGH, PENNSYLVANIA,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Oregon
Robert E. Jones, Senior District Judge, Presiding
Argued and Submitted March 5, 2013
Portland, Oregon
Before: TASHIMA, CLIFTON and BEA, Circuit Judges.
American Medical Response, Inc. and American Medical Response
Northwest, Inc. (collectively “AMR”), an ambulance service provider, appeal the
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
district court’s summary judgment in favor of ACE Ins. Co. and National Union
Fire Ins. Co. in AMR’s diversity insurance coverage action. We review de novo a
district court’s grant of summary judgment, choice of law determinations, and
underlying legal questions. Narayan v. EGL, Inc., 616 F.3d 895, 898–99 (9th Cir.
2010). We view the evidence “in the light most favorable to the nonmoving
party.” Id. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we reverse and
remand.
This action arises out of the insurance companies’ denial of coverage to
AMR in connection with fourteen underlying state court actions filed by third-
party plaintiffs against AMR and its employee Lannie Haszard. Thus far, one case
went to trial with a jury verdict in favor of the plaintiff; AMR has settled six of the
suits; and the Oregon state court granted summary judgment to AMR in another
seven cases, but they are each on appeal.
These third-party plaintiffs alleged Haszard improperly touched or sexually
abused female ambulance passengers while they were being transported in one of
AMR’s ambulances. The parties and the district court are familiar with the facts of
the case so we recite them only as necessary to our disposition.
AMR’s insurance policies issued by ACE and National Union during the
relevant time period cover “bodily injury . . . caused by an occurrence.” The
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Policies each define “occurrence” as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.”
Each of the Policies contains a “separation of insureds” provision requiring
that the Policies be applied separately to each insured as if each insured were the
only insured under the Policies.
The Policies contain an exclusion for “intentional acts.” Thus, we must
determine whether that insured’s potential basis of liability falls within the
intentional acts exclusion. The intentional acts exclusion can be applied to a
particular insured—here, AMR—only if that insured intended to cause injury to
the plaintiff when performing the acts for which it is being sued—here, the hiring,
retaining, training and supervising of Haszard.
In short, (1) who is seeking coverage and (2) for what actions or omissions
do they seek coverage? Here, the answer is (1) AMR seeks coverage for (2) claims
that it negligently hired, trained, retained and supervised Haszard. AMR does not
seek coverage for any vicarious liability for Haszard’s intentional acts.
As to the choice of law issue, we need not decide whether the district court
should have applied Oregon or Colorado law because both states recognize that an
insured’s negligent conduct is covered as an “occurrence.”
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Neither ACE nor National Union disputes that AMR is covered for negligent
acts and omissions under Oregon law, even where the insured’s employee’s actions
that caused the plaintiff’s injuries were intentional. See N. Clackamas Sch. Dist. v.
Or. Sch. Bds. Ass’n Prop. & Cas. Trust, 991 P.2d 1089, 1091-92 (Or. Ct. App.
1999).
AMR is also covered for negligent acts under Colorado law. Under
Colorado law, liability policies extend coverage to “occurrences” and other events
defined as “accidents,” unless the insured subjectively intended the harm that
occurred. “‘Ordinary negligence does not constitute an intention to cause damage;
neither does a calculated risk amount to an expectation of damage. To deny
coverage, then, the fact finder must find that the insured intended to cause
damage.’” Blackhawk-Cent. City Sanitation Dist. v. Am. Guar. & Liab. Ins. Co.,
214 F.3d 1183, 1193 (10th Cir. 2000) (construing Colorado law in an intentional
discharge of pollutants case) (quoting City of Johnstown v. Bankers Standard Ins.
Co., 877 F.2d 1146, 1150 (2d Cir. 1989)). The Colorado Supreme Court explicitly
adopted the Second Circuit’s reasoning in City of Johnstown in Hecla Mining Co.
v. N.H. Ins. Co., 811 P.2d 1083, 1088 (Colo. 1991).
The district court here, and both ACE and National Union, rely exclusively
on Mountain States Casualty Co. v. Hauser, 221 P.3d 56 (Colo. Ct. App. 2009), to
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urge there was no coverage. Hauser, however, is distinguishable because in
Hauser the employer insureds seeking coverage were found by a jury to be liable
for the employee’s actions under theories of respondeat superior and vicarious
liability based on the insured’s own willful, wanton and reckless conduct.
The jury awarded damages against the insured because the owners of the business
“knew full well what was potentially going to happen with [the supervisor] and the
female employees and did not care.” 221 P.3d at 58.
Thus, the insured was guilty of intentional conduct, not negligence. As in
the case before us, the Mountain States’ policy had an exclusion for intentional
conduct. Therefore, the trial court granted summary judgment to the insurance
company, and the court of appeals affirmed.
Two facts make Hauser a very different case from the one here. First, in
Hauser the insureds were the father and uncle of the abusing manager. They had
knowledge of his proclivities given that he had sexually abused other female
employees before Hauser. Yet, despite this knowledge, they chose to keep him in
a management position, with power over Hauser. The Hauser court specifically
did not decide the issue put here by AMR: “whether an injury resulting from the
foreseeable harm in a negligent hiring or supervision case could ever be found to
be ‘unexpected’ under an insurance policy provision in different circumstances.”
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221 P.3d at 61 (emphasis added). Here, the parties have not pointed to any
allegations in the underlying complaints, nor findings by the 1998 jury, that
AMR’s acts or omissions were more culpable than negligence.
Second, the insureds were sued under a vicarious liability theory. That
wrinkle is not present in this case. The parties have not pointed to any allegations
that AMR is liable under a vicarious liability theory. Here, the claims are under a
direct liability theory.
On remand, the district court will need to look at the allegations in each of
the fourteen underlying third-party complaints, and at the 1998 jury verdict, to
determine whether coverage applies under our analysis.
REVERSED AND REMANDED.
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