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Insurance Company of State of Pennsylvania v. Gemini Insurance Co.

United States District Court, D. Nevada

April 17, 2014

GEMINI INSURANCE CO. et al., Defendants.


ROBERT C. JONES, District Judge.

Plaintiff Insurance Company of the State of Pennsylvania sued three Defendants in diversity in this Court, seeking several declarations as to the parties' rights and responsibilities under excess liability insurance policies, as well as monetary damages under theories of equitable subrogation and indemnity. The only Defendant to have been served has now asked the Court to abstain or to dismiss for failure to join an indispensable party. For the reasons given herein, the Court dismisses the case as unripe and denies the present motion as moot.


In two ongoing state court actions, homeowner associations have sued their respective developers for construction defects. ( See Compl. ¶¶ 11, 26, Dec. 2, 2013, ECF No. 1). Those developers are insureds of Plaintiff Insurance Co. of the State of Pennsylvania ("ICSOP") and Defendant Gemini Insurance Co. ("Gemini"); Gemini is their primary insurer, and ICSOP is their secondary (excess) insurer. ( See id. ¶¶ 12, 18, 27, 32). Gemini's primary policy has a $2, 000, 000 limit and a $100, 000 "self insured retention" ("SIR"). Although ICSOP is adamant that the SIR is "not a deductible, " it appears to function as one, as ICSOP has described it in the Complaint, and ICSOP has noted that Gemini has referred to the amount as a deductible in communications to its insureds. ( See id. ¶¶ 14, 18). ICSOP alleges that the SIR clause reads in relevant part, "Our obligation under the policy to the insured applies only to the amount excess [sic] of the Self Insured Retention.... [T]he first named insured shall have the obligation and is ultimately responsible for paying the Self Insured Retention." ( See id. ¶ 43). The SIR therefore appears to function like a deductible. In summary, Gemini, as the primary insurer, is liable for up to $2, 000, 000 beyond the first $100, 000 per occurrence, and ICSOP, as the secondary insurer, is ultimately liable for any amount beyond $2, 100, 000, not to exceed $8, 000, 000. ICSOP appears aggrieved that Gemini has been improperly interpreting the term "occurrence" in its own policies too narrowly, and therefore improperly "eroding" the primary coverage, such that Gemini's insureds are more likely to have to invoke their secondary policies with ICSOP.

ICSOP sued Gemini in diversity in this Court for a declaration as to the proper interpretation of Gemni's policies with its insureds and as to Gemini's rights and duties under its policies with its insureds. It also seeks subrogation or indemnity. ICSOP joined two insureds as defendants but has not served them. The Court denied ICSOP's motions for offensive summary judgment filed before the Clerk had even issued any summonses. Gemini has asked the Court to abstain or dismiss for failure to join indispensable parties.


This case is simply unripe. Plaintiff does not allege that it is Defendant's reinsurer and that there is a live controversy as to the interpretation of a putative reinsurance contract between it and Defendant. Plaintiff alleges only that Defendant is the primary insurer of certain insureds, that Plaintiff is a secondary (excess) insurer of those same insureds, and that Plaintiff suspects Defendant is implementing its primary policies in a way that improperly erodes the insureds' primary coverage, thereby potentially exposing Plaintiff to higher claims from those insureds that would not arise if Defendant were to properly interpret and apply the primary policies. Critically, Plaintiff does not allege anywhere in the Complaint that any of the insureds have made any demands under the secondary policies as a result or even that such demands are imminent, as opposed to hypothetical. See Calderon v. Ashmus, 523 U.S. 740, 745-46 (1998).[1] Plaintiff essentially asks the Court to issue an advisory opinion as to how the Court would rule if some of the insureds were to make such demands. The Court cannot issue such an opinion. See, e.g., Coffman v. Breeze Corp., 323 U.S. 316, 324 (1945) (collecting cases).


IT IS HEREBY ORDERED that the case is DISMISSED without prejudice as unripe.

IT IS FURTHER ORDERED that the Clerk shall close the case.

IT IS FURTHER ORDERED that the Motions to Dismiss (ECF Nos. 28, 41) ...

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