Mitchell B. Haisten, Individually and as the Administrator of the Estate of Jean E. Haisten v. Grass Valley Medical Reimbursement Fund, Ltd.

CHOY, Senior Circuit Judge:

This appeal concerns the ability of the district court, sitting in California under diversity jurisdiction, to assert personal jurisdiction and to apply California regulations against a foreign insurance company which was designed not only to indemnify California physicians, but also to avoid the reach of California law. The district court, concluding that personal jurisdiction could be exercised and that the state’s regulations were applicable, granted summary judgment against the insurer. The court also ordered the insurer to pay attorney’s fees under California Insurance Code § 1619. We affirm the grant of summary judgment and the award of attorney’s fees.

I

BACKGROUND

In early 1977, Harold Nachtrieb, attorney for the Sierra-Nevada Memorial Miners’ Hospital (“Hospital”), went to the Cayman Islands to arrange for the formation of the Grass Valley Medical Reimbursement Fund, Ltd. (“Fund”). The purpose of the Fund was to provide self-funding indemnity insurance for doctors at the Hospital. Approximately twenty-two of the Hospital’s physicians were insured by the Fund. The Hospital is located in Nevada City, California. The insureds are California…