Virginia Mason Medical Center v. Executive Risk Indemnity, Inc.
Docket: No. 08-35184
Court: Court of Appeals for the Ninth Circuit; May 26, 2009; Federal Appellate Court
Executive Risk Indemnity, Inc. appeals the district court's summary judgment in favor of Virginia Mason Medical Center regarding breach of contract claims, and the appellate court affirms the lower court's decision. Key points include: 1. The district court correctly determined that the entire settlement payment made by Virginia Mason was a covered loss under the insurance policy. Executive Risk's interpretation of "loss" was rejected because the policy explicitly includes payments for damages resulting from omissions and misleading statements. Virginia Mason's settlement arose from a non-disclosure claim under the Washington Consumer Protection Act, which allows for compensatory damages linked to unfair competition. 2. The court found that the exclusion for "gaining any profit, remuneration or advantage to which [an] insured was not legally entitled" did not apply. Executive Risk claimed coverage was excluded because Virginia Mason purportedly refunded charges in violation of the Act. However, the court reasoned that Virginia Mason did not return anything it was not entitled to, thus entitling it to full coverage under the policy, including defense costs and attorneys’ fees. 3. The award of attorneys’ fees to Virginia Mason was upheld for costs incurred while compelling Executive Risk to fulfill its obligations under the insurance policy. The court emphasized that insurers must cover legal fees when they force the insured to take legal action to secure benefits from their contract. The court affirmed the decisions made by the district court, noting that Virginia Mason's request for attorneys' fees and costs related to the appeal must be submitted through a separate motion as per the relevant rules. This ruling is not intended for publication and does not serve as precedent except as specified in the Ninth Circuit rules.