San Francisco Bay Area Rapid Transit District v. General Reinsurance Corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SAN FRANCISCO BAY AREA RAPID
TRANSIT DISTRICT,
Plaintiff-counter-
defendant-Appellant,
v.
GENERAL REINSURANCE
CORPORATION,
Defendant-counter-claimant-
Appellee.
No. 16-15406
D.C. No. 3:14-cv-01866-JSC
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Jacqueline Scott Corley, Magistrate Judge, Presiding
Argued and Submitted November 16, 2017
San Francisco, California
Before: RAWLINSON and BYBEE, Circuit Judges, and FRIEDMAN,** District
Judge.
FILED
MAR 06 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Paul L. Friedman, United States District Judge for the
District of Columbia, sitting by designation.

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Plaintiff-Appellant San Francisco Bay Area Rapid Transit District
(“BART”) appeals the district court’s entry of judgment in favor of Defendant-
Appellee General Reinsurance Corp. (“GRC”), BART’s excess insurer for
workers’ compensation liability from July 1, 1985 to July 1, 1992, in this breach of
contract action. The parties are familiar with the facts and proceedings, and we
will not state them except as necessary to explain our decision.
The central issue in this coverage litigation is whether GRC is bound by the
determination of the date of injury of a former BART employee made during a
proceeding before the California Workers’ Compensation Appeals Board
(“WCAB”). If GRC is not bound, then BART concedes it cannot prove its breach
of contract claim because the date of injury falls outside the GRC policy period and
its losses are not covered.1 The district court held that GRC was not bound by the
WCAB’s findings as to the date of injury, and subsequently entered judgment for
GRC. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The district court did not lack subject matter jurisdiction. This action was
properly removed. This breach of contract coverage action does not involve an
1 After the district court determined that GRC was not bound by the
WCAB’s date of injury finding, BART stipulated to the entry of judgment in favor
of GRC because both GRC and BART’s experts found that the employee’s
exposures during his employment with BART were injurious after the GRC policy
period ended.
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adjudication of an employee’s workers’ compensation benefits and does not
“aris[e] under” California workers’ compensation laws. 28 U.S.C. § 1445(c).
Accordingly, 28 U.S.C. § 1445(c) did not bar removal. See U.S. Fid. & Guar. Co.
v. Lee Invs. LLC, 641 F.3d 1126, 1132 (9th Cir. 2011). The Rooker-Feldman
doctrine is also inapplicable. BART’s breach of contract action against its excess
insurer is not a de facto appeal of the WCAB award against BART. Moreover,
GRC was not a party to the WCAB proceeding and the Rooker-Feldman doctrine
cannot be applied to a non-party to the state court action, see S. Cal. Edison Co. v.
Lynch, 307 F.3d 794, 805 (9th Cir. 2002), and Rooker-Feldman does not apply to
review of state agency actions, id.; see also Verizon Md. Inc. v. Pub. Serv. Comm’n
of Md., 535 U.S. 635, 644 n.3 (2002).
California law does not preclude GRC from litigating the date of injury
determination in this coverage action. An insurer may be precluded from
relitigating a judgment against its insured in a coverage action if it was duly
notified of the underlying action and had a full opportunity to protect its own
interests in that action. Exec. Risk Indem., Inc. v. Jones, 89 Cal. Rptr. 3d 747, 759
(Cal. Ct. App. 2009). GRC does not challenge BART’s liability to the employee or
the amount of the award against BART, however. Instead, GRC seeks to litigate a
factual question that goes to coverage under its policy. It is not barred from doing
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so by the stipulation between BART and its employee or by the WCAB’s finding
in approving that agreement. See id. at 760. Moreover, GRC was not notified of
the underlying proceeding until one week after BART’s compromise and release
had been approved by the WCAB. It therefore was not duly notified of the
underlying action against its insured and would not be bound by the judgment
against its insured under Executive Risk. See id. at 759.
As BART concedes its claim is not covered under the policy, GRC is not
estopped from denying coverage. GRC has not raised a late notice defense. It
argues instead that the policy does not cover the claim in the first instance.
Equitable estoppel is thus inapplicable. Equitable estoppel is “not available to
bring within the coverage of a policy risks not covered by its terms, or risks
expressly excluded therefrom . . . .” Supervalu, Inc. v. Wexford Underwriting
Managers, Inc., 96 Cal. Rptr. 3d 316, 326 (Cal. Ct. App. 2009), as modified
(quoting Manneck v. Lawyers Title Ins. Corp., 33 Cal. Rptr. 2d 771, 777 (Cal. Ct.
App. 1994)).
Because GRC is not bound in this coverage litigation by the date of injury
determination in the WCAB proceeding, judgment was properly entered in favor of
GRC. The judgment of the district court is AFFIRMED.
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