Icrmp v. Northland

Decision Date02 April 2009
Docket NumberNo. 34375.,34375.
Citation147 Idaho 84,205 P.3d 1220
PartiesIDAHO COUNTIES RISK MANAGEMENT PROGRAM UNDERWRITERS, Plaintiff-Appellant, v. NORTHLAND INSURANCE COMPANIES, a Minnesota corporation, Defendant-Respondent.
CourtIdaho Supreme Court

Anderson, Julian & Hull, Boise, for appellant. Phillip Collaer argued.

Hall, Farley, Oberrecht & Blanton, Boise, for respondent. Donald J. Farley argued.

HORTON, Justice.

This case arises out of an insurance dispute. Idaho Counties Risk Management Program Underwriters (ICRMP) appeals the district court's grant of summary judgment in favor of ICRMP's insurer, Northland Insurance Companies (Northland), holding that Northland had no duty to reimburse ICRMP for costs it incurred on behalf of its insureds in the defense and settlement of a lawsuit filed by Donald M. Paradis. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

On June 22, 1980, the bodies of Kimberly Palmer and Scott Currier were discovered in the woods outside of Post Falls, Idaho. Detective George Elliott transported Ms. Palmer's and Mr. Currier's bodies to Portland, Oregon, where the Chief Medical Examiner for the State of Oregon, William Brady, M.D., performed autopsies. The following day, June 24, 1980, a meeting was held with members from the Spokane County Sheriff's Office and the Kootenai County Sheriff's Office to discuss investigation of the killings. Kootenai County Deputy Prosecuting Attorney D. Marc Haws also attended the meeting; his supervisor at the time, the prosecuting attorney, was Glen Walker. During the course of the meeting, Haws took notes that reflected his understanding of the murders.

In late 1980, Paradis was arrested and charged with the murder of Ms. Palmer, and the State presented its theory, based on the opinion of Dr. Brady and conveyed to the court through Haws, that Ms. Palmer had aspirated water from the creek near Post Falls in which her body was found partially submerged, suggesting that she had been alive when she went into the creek and was thus killed in Idaho. On December 10, 1981, following a trial conducted by Haws and another deputy Kootenai County prosecutor, Peter Erbland, Paradis was found guilty of first degree murder and sentenced to death.

Paradis sought review of his conviction by appeal, post-conviction relief, and federal habeas corpus. While one of his habeas petitions was pending in January 1996, Paradis' counsel obtained copies of the notes Haws had made during the June 24, 1980 meeting, which revealed significant inconsistencies in Dr. Brady's opinions the day after the autopsy as to the cause and location of Ms. Palmer's death and the opinions Dr. Brady offered at trial. While Paradis was awaiting trial in Kootenai County in 1980-1981, Paradis' attorney had made a routine request for disclosure, but the prosecutor did not reveal Haws' notes or any of the potentially exculpatory information in or related to them.

Eventually, Paradis' case went before the United States Court of Appeals for the Ninth Circuit, which held that the non-disclosure of this exculpatory evidence amounted to a violation of the prosecution's duty under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and remanded Paradis' case. The federal district court granted Paradis' habeas petition and ordered the State to initiate a new trial against Paradis or release him. Paradis pled guilty to a lesser charge of accessory to a felony and was released on April 10, 2001.

Following Paradis' release from custody, he filed a notice of tort claim with Kootenai County on October 9, 2001. On April 9, 2003, Paradis filed a complaint in the U.S. District Court for the District of Idaho, naming Dr. Brady, Kootenai County, Walker, Haws, Erbland, and Elliott as defendants, alleging violations of his civil rights, negligence, false arrest, malicious prosecution, false imprisonment, negligent and intentional infliction of emotional distress, and defamation. The defendants filed a number of motions to dismiss, and the federal district court did dismiss a number of claims, but permitted Paradis to file an amended complaint and held that Paradis had alleged at least some continuing torts that were not barred by statutes of limitation. Paradis filed an amended complaint, naming the same defendants and adding claims for false light and invasion of privacy.

ICRMP was formed in 1985 and sold insurance to its members, including Kootenai County. Beginning in 1986 and continuing through 2001, ICRMP purchased insurance from Northland. Upon receiving a copy of Paradis' initial complaint from Kootenai County in 2003, ICRMP forwarded a copy to Northland. ICRMP also analyzed the initial complaint and, based on the allegations of continuing torts, decided that it had a duty to defend Kootenai County and the individual defendants, subject to exclusions and limitations in ICRMP's policy. ICRMP retained separate counsel for Kootenai County, Haws, Erbland, and Elliott, and Northland did not object. ICRMP managed the Paradis litigation for the next two years, keeping Northland informed of the proceedings, until a settlement was finally reached.1 On February 13, 2006, Northland first informed ICRMP of its position that coverage did not exist for any of the claims alleged in the Paradis complaints. Northland definitively denied ICRMP's claim for reimbursement of defense and settlement costs on July 20, 2006.

ICRMP filed a complaint and demand for jury trial against Northland on September 14, 2006. The complaint alleged damages for breach of contract based upon Northland's refusal to reimburse ICRMP. ICRMP moved the district court for partial summary judgment asking that the court hold that ICRMP had a duty to defend its Kootenai County insureds; the court granted the motion on May 29, 2007. On March 1, 2007, Northland filed a motion seeking summary judgment that it had no obligation to reimburse ICRMP, which the district court granted on June 11, 2007.

II. STANDARD OF REVIEW

When reviewing an order for summary judgment, the standard of review for this Court is the same standard used by the district court in ruling on the motion. Watson v. Weick, 141 Idaho 500, 504, 112 P.3d 788, 792 (2005). Summary judgment is proper when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Idaho R. Civ. P. 56(c).

A court must first decide, when construing a contract, whether it is ambiguous, which is a question of law. Lovey v. Regence BlueShield of Idaho, 139 Idaho 37, 46, 72 P.3d 877, 886 (2003). A contractual provision is ambiguous if it is reasonably subject to conflicting interpretations. Id. If the policy at issue does not appear ambiguous on its face, and if neither party asserts that it contains an ambiguity, then this Court exercises free review over its interpretation. Id. The meaning of the contract and the intent of the parties must be determined from the plain meaning of the words used. Id.

III. ANALYSIS
A. Northland is not ICRMP's reinsurer and is liable to ICRMP only according to the terms of Northland's own policy.

ICRMP urges that its decision to extend coverage to the Kootenai County insureds was taken in good faith, as evidenced by the district court's summary judgment holding that ICRMP had a duty to defend against that lawsuit,2 and that therefore Northland, as ICRMP's reinsurer, must extend corresponding coverage. Northland argues that the policy it sold ICRMP is a reimbursement policy, which does not bind Northland to extend coverage beyond the terms of that policy. The district court, while recognizing that the parties thoroughly discussed this issue of reinsurance versus reimbursement insurance, declined to rule on it, stating that Northland did not request a decision on this issue in its motion for summary judgment. The parties have renewed the discussion before this Court, however, and because the question is a question of law that is before this Court on a motion for summary judgment, it is appropriate for the Court to address it now. Bakker v. Thunder Spring-Wareham, LLC, 141 Idaho 185, 189, 108 P.3d 332, 336 (2005).

A reinsurer, in the strict sense of the term, is liable only according to the terms and conditions of the reinsurance contract, and only if the reinsured is liable. 44A Am. Jur.2d Insurance § 1819. However, "[a] `following form' clause in a policy of reinsurance incorporates by reference all the terms and conditions of the reinsured policy, except to the extent that the reinsurance contract by its own terms specifically defines the scope of coverage differently, i.e., via an exclusion." Aetna Cas. and Sur. Co. v. Home Ins. Co., 882 F.Supp. 1328, 1345 (S.D.N.Y.1995). ICRMP argues that the Northland policy is a reinsurance policy that incorporates ICRMP's policy with Kootenai County, and as such, where ICRMP is bound by the terms of its policy, so too is Northland, as a reinsurer, bound to reimburse ICRMP.

ICRMP further argues that Northland, as ICRMP's reinsurer, is also bound by the "follow the fortunes" doctrine, which requires a reinsurer to indemnify the insured for payments reasonably within the terms of the original policy, even if not technically covered by it. Int'l Surplus Lines Ins. Co. v. Certain Underwriters and Underwriting Syndicates at Lloyd's of London, 868 F.Supp. 917, 920 (S.D.Ohio 1994). ICRMP argues that even if the defense and settlement costs related to the Paradis litigation were not technically covered by ICRMP's policy, Northland, as a reinsurer, is nonetheless bound to reimburse ICRMP for those costs.

The problem with these arguments is that both the "follow the forms" and "follow the fortunes" rules apply only to reinsurers. Northland is not ICRMP's reinsurer. It is true, as ICRMP points out, that in one instance the Northland policy refers to ICRMP...

To continue reading

Request your trial
14 cases
  • Am. Safety Cas. Ins. Co. v. City of Waukegan, Case No. 07 C 1990.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • July 6, 2011
    ...... See Idaho Counties Risk Mgmt. Program Underwriters v. Northland Ins. Co., 147 Idaho 84, 205 P.3d 1220, 1224 (2009) (rejecting application of the multiple trigger ......
  • Gulf Underwriters Ins. Co. v. City of Council Bluffs
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • December 20, 2010
    ......Program Underwriters v. Northland Ins. Cos., 147 Idaho 84, 205 P.3d 1220, 1226–28 (2009) (“The policy also makes clear that an ......
  • Chi. Ins. Co. v. City of Council Bluffs
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • March 12, 2012
    ......Risk Mgmt. Program Underwriters v. Northland Ins. Cos., 147 Idaho 84, 205 P.3d 1220, 1226–28 (2009) (“The policy also makes clear that an ......
  • Mortensen v. Stewart Title Guar. Co., 35949.
    • United States
    • United States State Supreme Court of Idaho
    • July 1, 2010
    ...... . Idaho Counties Risk Mgmt. Prog. Underwriters v. Northland Ins. Cos., 147 Idaho 84, 86, 205 P.3d 1220, 1222 (2009). The generally accepted rule is that ......
  • Request a trial to view additional results
1 books & journal articles
  • Investigating coverage
    • United States
    • James Publishing Practical Law Books How Insurance Companies Settle Cases
    • May 1, 2021
    ...a violation of civil rights, or the like. See, for example , Idaho Counties Risk Management Program Underwriters v. Northland Ins. Cos. , 205 P.3d 1220 (Idaho 2009); Sarsfield v. Great American Ins. Co. of New York , 335 Fed. Appx. 63 (1st Cir. 2009); Selective Ins. Co. of South Carolina v.......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT