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Insurance Co. of State v. Great Northern Ins. Co.

United States Court of Appeals, First Circuit

May 29, 2015

INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Plaintiff, Appellant,
v.
GREAT NORTHERN INSURANCE COMPANY, Defendant, Appellee

As Amended June 2, 2015.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Denise J. Casper, U.S. District Judge.

Aaron S. Bayer, with whom Michael P. Thompson, David R. Roth, and Wiggin and Dana LLP were on brief, for appellant.

Jennifer C. Sheehan, with whom Richard J. Shea and Hamel, Marcin, Dunn, Reardon & Shea, P.C. were on brief, for appellee.

Before Torruella, Thompson, and Kayatta, Circuit Judges.

OPINION

Page 633

KAYATTA, Circuit Judge.

The parties ask us to decide a question of Massachusetts law on which Massachusetts' highest court has not spoken. The question arises when, as here, an insured buys two insurance policies that cover the same loss. In such a case, may the insured opt to have one insurer cover the entire loss or, instead, may either insurer insist that both share equitably in covering the loss? Given the competing considerations implicated by this question of state law and policy, and the lack of clear guidance that would allow us confidently to predict how Massachusetts' highest court would weigh these considerations, we certify the question to the Massachusetts Supreme Judicial Court (" SJC" ), pursuant to SJC Rule 1:03. See, e.g., Boston Gas Co. v. Century Indem. Co., 529 F.3d 8, 14-15 (1st Cir. 2008).

I. Background

The parties do not dispute any material facts. In January 2010, an employee of

Page 634

Progression, Inc.[1] (" Progression" ), suffered serious injury while on a business trip. The employee pursued a workers' compensation claim before the Massachusetts Department of Industrial Accidents (" DIA" ). Progression had two insurance policies that covered this work-related injury: one with Insurance Company of the State of Pennsylvania[2] (" ISOP" ), and one with Great Northern Insurance Company[3] (" Great Northern" ). Progression tendered the claim to ISOP only. Progression did not notify Great Northern. ISOP immediately made payments pursuant to the policy and defended the claim before the DIA.[4]

ISOP later learned of Progression's policy with Great Northern. In October 2011, ISOP wrote Great Northern, notifying it of the claim against Progression and requesting contribution. In March 2012, Great Northern replied, informing ISOP that it had contacted Progression after receiving notice from ISOP, and learned that Progression purposefully tendered the claim to ISOP only.[5] Great Northern observed that ISOP was " legally obligated to handle [Progression's] claim," and that there was " no practical reason whatsoever for Great Northern to assume" handling the claim.

Invoking diversity jurisdiction, ISOP filed this suit and promptly moved for summary judgment declaring that the Massachusetts doctrine of equitable contribution required Great Northern to pay half of the past and future defense costs and indemnity payments related to the claim. Cross-moving for summary judgment, Great Northern argued that it had no coverage obligation because Progression chose not to comply with its duty under the policy to notify Great Northern of the claim. ISOP responded that, under Massachusetts law, Progression's failure to notify Great Northern would only excuse Great Northern from its coverage obligation if the lack of notice caused prejudice. Neither party pointed to any " ...


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