Insurance Company of the State of Pennsylvania v. Associated International Insurance Company

In this diversity action for breach of contract and declaratory relief, plaintiff-appellant, Insurance Company of the State of Pennsylvania (ICP), appeals from a decision in favor of defendant-appellee, Associated International Insurance Company (Associated), entered in the United States District Court for the Central District of California after a trial without a jury.

In essence, ICP is seeking damages and a determination of its rights and liabilities under a reinsurance contract with Associated. ICP contends that Associated breached its duty to indemnify ICP under the reinsurance contract. Associated alleges that ICP did not comply with the notice provision of the reinsurance contract and that Associated was prejudiced by the noncompliance. Hence, Associated contends that, under California law, it is relieved of liability under the reinsurance contract. Associated also submits that, regardless of whether ICP breached the notice clause, the settlement for which ICP seeks to be indemnified is beyond the scope of the reinsurance contract.

The questions presented on this appeal are: (1) whether the district court erred in holding that the notice by ICP to Associated in 1987 was…