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{\title IN THE SUPREME COURT OF GUAM}{\author lroberto}{\operator blake_r}{\creatim\yr2005\mo8\dy12\hr9\min5}{\revtim\yr2006\mo3\dy10\hr11\min25}{\version4}{\edmins6}{\nofpages24}{\nofwords10004}{\nofchars57025}{\*\company Superior Court of Guam}
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\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\i\fs20\insrsid5338257 National Union v. GHURA}{\fs20\insrsid5338257 , Amended Opinion\tab \tab Page }{\field{\*\fldinst {\fs20\insrsid5338257 PAGE }}{\fldrslt {
\fs20\lang1024\langfe1024\noproof\insrsid10838210 24}}}{\fs20\insrsid5338257  of 33
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\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\insrsid5338257\charrsid10838210 IN THE SUPREME COURT OF GUAM}{\insrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 NATIONAL UNION FIRE INSURANCE CO.
\par OF PITTSBURGH, PA,}{\insrsid5338257\charrsid10838210 
\par Plaintiff-Appellant
\par 
\par }{\b\insrsid5338257\charrsid10838210 v.}{\insrsid5338257\charrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 GUAM HOUSING AND URBAN RENEWAL AUTHORITY,}{\insrsid5338257\charrsid10838210 
\par Defendant-Appellee}{\insrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 AMENDED OPINION}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {
\super\insrsid5338257 1}{\fs20\insrsid5338257  Subsequent to the issuance of the Opinion in this case filed on September 19, 2003, the court }{\i\fs20\insrsid5338257 sua sponte}{\fs20\insrsid5338257 
 discovered that a portion of footnote 6 was inadvertently omitted from the Opinion. Furthermore, the court detected three typographical or editing errors in the Opinion, which include the misprint of the attorneys}{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  addresses on the cover page,  a reference in a parenthetical explanation in paragraph 63 to }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 Section 553}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 of the California Insurance Code, which should instead read }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 Section 533,}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL
 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  as well as the appearance of an extraneous word }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257 that}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 in paragraph 77.  This Amended Opinion is issued to correct those errors, and, aside from the addition of this footnote, 
does not otherwise alter the substance of the Opinion filed on September 19, 2003.  This Amended Opinion shall supercede the Opinion filed on September 19, 2003.      }}}{\insrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 Filed: November 4, 2003}{\insrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 Cite as: 2003 Guam 19}{\insrsid10838210 
\par 
\par }{\insrsid5338257\charrsid10838210 Supreme Court Case No.: CVA02-012
\par Superior Court Case No.: CV1849-01}{\ul\insrsid10838210 
\par 
\par }{\insrsid5338257\charrsid10838210 Appeal from the Superior Court of Guam
\par Argued and submitted on February 13, 2003
\par Hag\'e5t\'f1a, Guam
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
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\par }{\ul\insrsid5338257\charrsid10838210 Appearing for Plaintiff-Appellant:}{\insrsid5338257\charrsid10838210 
\par Michael D. Flynn, Jr., }{\i\insrsid5338257\charrsid10838210 Esq}{\insrsid5338257\charrsid10838210 .
\par }{\insrsid10838210 McKeown, Vernier, Price, Maher}{\insrsid5338257\charrsid10838210 
\par A Joint Venture of McKeown Price, LLP
\par and Vernier & Maher, LLP
\par 115 Hesler Place, Ground Floor
\par Governor Joseph Flores Bldg.
\par Hag\'e5t\'f1a, Guam 96910\cell 
\par }{\ul\insrsid5338257\charrsid10838210 Appearing for Defendant-Appellee:}{\insrsid5338257\charrsid10838210 
\par Daniel J. Berman, }{\i\insrsid5338257\charrsid10838210 Esq.
\par }{\insrsid5338257\charrsid10838210 Berman, O}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Connor, Mann & Shklov 
\par Suite 503, Bank of Guam Bldg.
\par 111 Chalan Santo Papa
\par Hag\'e5t\'f1a, Guam 96910\cell }\pard \ql \li0\ri0\widctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0 {\insrsid5338257\charrsid10838210 \trowd \irow0\irowband0\lastrow 
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\par }{\insrsid5338257\charrsid10838210 BEFORE: F. PHILIP CARBULLIDO, Chief Justice; FRANCES M. TYDINGCO-GATEWOOD, Associate Justice; PETER C. SIGUENZA, JR., Justice }{\i\insrsid5338257\charrsid10838210 Pro Tempore}{\insrsid5338257\charrsid10838210 .}{
\insrsid10838210 
\par 
\par }{\b\insrsid5338257\charrsid10838210 CARBULLIDO, C.J.:}{\b\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [1]}{\insrsid5338257\charrsid10838210 \tab Guam Housing and Urban Renewal Authority (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
) purchased a Public Officials and Employees Liability Insurance Policy (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Policy}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ) from National Union Fire Insurance Co. of Pittsburgh, PA (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Invoking the terms and benefits under the Policy, GHURA requested a defense in three lawsuits filed against it by former GHURA employees.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 National Union paid the defense costs subject to a reservation of the right to seek reimbursement.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
At the conclusion of the cases, National Union filed the present underlying action in the Superior Court of Guam seeking reimbursement of defense costs pursuant to the reservation of rights letter.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
National Union filed a motion for summary judgment arguing that there was no possibility that the acts alleged in the three complaints were covered under the Policy, that National Union therefore had no du
ty to defend GHURA, and that because there was no duty to defend, National Union is entitled to a reimbursement for the defense costs.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The Superior Court denied National Union}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s motion for summary judgment and granted summary judgment in favor of GHURA.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The trial court found that under the Policy, National Union had a duty to defend GHURA in the underlying suits and was therefore not entitled to a reimbursement of defense costs.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 We find that National Union had a duty to pay defense costs for claims which were covered under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
We further find that several claims in the underlying lawsuits were not covered under the Policy, and that National Union is therefore entitled to a reimbursement for costs expend
ed to defend those non-covered claims provided that National Union is able to produce evidence of allocation of costs expended on covered and non-covered claims.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
We further find that National Union may only recover defense costs if it filed its government claim within the limitations periods set forth in the Government Claims Act.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Accordingly, we affirm in part, reverse in part, and remand for findings on the issues of allocation and the timeliness of National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 s government claim.
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 I.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [2]}{\insrsid5338257\charrsid10838210 \tab In September of 1995, GHURA purchased a Public Officials and Employees Liability Insurance Policy from National Union.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The Policy was in effect from September 14, 1995 to September 14, 1998.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 GHURA is a named insured under the Policy.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [3]}{\insrsid5338257\charrsid10838210 \tab On December 5, 1997, Margarita D. Perez and Jesse C. Toves, former employees of GHURA (collectively referred to as }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ), sued GHURA in the District Court of Guam, (Case No. CV97-00080), alleging that they were wrongfully terminated from their positions at GHURA in v
iolation of their rights as provided for by statute and guaranteed under the United States Constitution.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [4]}{\insrsid5338257\charrsid10838210 \tab On December 9, 1997, GHURA requested that National Union defend it in the District Court suit.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
In a letter dated January 8, 1998, National Union accepted the tender of defense on behalf of GHURA subject to a reservation of rights.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Specifically, in the letter, National Union maintained that there was no potential for coverage under the Policy and therefore denied GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 s claim for indemnity.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Nonetheless, National Union agreed to defend GHURA but specifically reserved }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 its right to withdraw from the defense . . . upon a judicial determination of non-coverage}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  and to }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 seek reimbursement of defense costs incurred defending claims for which there is no potential for coverage.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. II, Ex. }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 F}
{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 , pp. 220-225 (Guam Ins. Adjusters, Ins. Ltr.).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 

\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [5]}{\insrsid5338257\charrsid10838210 \tab The Employees thereafter filed two other suits in the Superior Court of Guam, both claiming relief based on the alleged wrongful termination.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 These included a civil action filed on February 26, 1999 (Case No. CV0410-99) and a petition for alternative writ of mandate filed on February 10, 2000 (Case No. SP0051-00).}{\cs15\super\insrsid5338257\charrsid10838210 
\chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
The Employees also filed a petition for writ of review of a Civil Service Commission decision filed on March 13, 2000 (Superior Court Case No. SP0081-00).  It is unclear from the record wheth
er National Union defended GHRUA in the petition for writ of review.  In the present action, National Union did not claim reimbursement for defense costs related to that proceeding.}{\insrsid5338257  }}}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [6]}{\insrsid5338257\charrsid10838210 \tab National Union defended GHURA in all three actions.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The suits wer
e ultimately dismissed on procedural grounds, primarily as being time-barred.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See}{\insrsid5338257\charrsid10838210  Excerpts of Record, vol. II, pp. 487-506 (Orders Dismissing Suits).}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 No case was decided on its merits.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [7]}{\insrsid5338257\charrsid10838210 \tab On June 14, 2000, National Union filed an amended c
omplaint for declaratory relief in the Superior Court (Case No. CV0873-00), seeking a declaration of whether it was entitled to reimbursement of defense costs for defending GHURA in the three prior suits.}{\cs15\super\insrsid5338257\charrsid10838210 
\chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
It appears form the record on appeal that a declaratory judgment has not yet been issued in that case.}{\insrsid5338257  }}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [8]}{\insrsid5338257\charrsid10838210 \tab In the interim, on January 25, 2001, National Union filed a government claim for amounts paid for the defense.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The claim was later supplemented on August 14, 2001.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 GHURA denied the claim on July 18, 2001.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [9]}{\insrsid5338257\charrsid10838210 \tab Thereafter, on November 7, 2001, National Union filed the instant action claiming reimbursement from GHURA for the defense costs pursuant to its reservation of rights.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 National Union filed a motion for summary judgment, arguing that there
 was no possibility that the acts alleged in the complaints were covered under the Policy and, therefore, that GHURA was obligated to reimburse National Union for the defense costs.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote 
\pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
GHURA also contemporaneously filed a motion to consolidate the instant case with the declaratory judgment action.}}}{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [10]}{\insrsid5338257\charrsid10838210 \tab In a Decision and Order filed on May 3, 2002, the lower court denied National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s motion for summary judgment.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 In the Decision and Order, the lower court also denied GHURA}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s motion to consolidate.  That decision has not been challenged in this appeal.}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The court instead granted summary judgment in favor of GHURA, finding that, pursuant to the Policy, National Union had a duty to defend GHURA in the underlying suits, and that National Union was therefore not entitled to a reimbursement of defense costs.}
{\insrsid10838210  }{\insrsid5338257\charrsid10838210 A judgment for GHURA was thereafter entered on the docket.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 This appeal followed.
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 II.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [11]}{\insrsid5338257\charrsid10838210 \tab This court has jurisdiction over appeals of final judgments entered in the Superior Court pursuant to Title 7 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}{\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3107 and 3108(a) (1994).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 III.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [12]}{\insrsid5338257\charrsid10838210 \tab National Union appeals the lower court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s denial of its motion for summary judgment and its grant of summary judgment in favor of GHURA.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We review a grant or denial of summary judgment }{
\i\insrsid5338257\charrsid10838210 de novo}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Aguon v. Gutierrez}{\insrsid5338257\charrsid10838210 , 2002 Guam 14, }{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  5.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Summary judgment is appropriate if there are no genuine issues of material fact and the movant is entitled to judgment in his or her favor as a matter of law.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See }{\insrsid5338257\charrsid10838210 
Guam R. Civ. P. 56(c); }{\i\insrsid5338257\charrsid10838210 GHURA v. Dongbu Ins. Co.}{\insrsid5338257\charrsid10838210 , 2002 Guam 3, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid10838210  8.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \li0\ri0\keep\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 [13]}{\insrsid5338257\charrsid10838210 \tab This case involves the interpretation of an insurance policy, which is also reviewed }{
\i\insrsid5338257\charrsid10838210 de novo}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Conestoga Servs. Corp. v. Executive Risk Indem., Inc.}{\insrsid5338257\charrsid10838210 ,
 312 F.3d 976, 981 (9th Cir. 2002); }{\i\insrsid5338257\charrsid10838210 Cort v. St. Paul Fire & Marine Ins. Co.}{\insrsid5338257\charrsid10838210 , 311 F.3d 979, 982 (9th Cir. 2002) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 The interpretation of an insurance policy, as applied to undisputed facts, is a question of law.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Specifically, the question of whether certain undisputed acts of an insured fall within the coverage or exclusionary provisions of an insurance policy requires contract interpretation and is reviewed }{\i\insrsid5338257\charrsid10838210 de novo}{
\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Brown & Lacounte, LLP}{\i\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 v. Westport Ins. Corp.}{\insrsid5338257\charrsid10838210 
, 307 F.3d 660, 662 (7th Cir. 2002)}{\i\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 A court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s interpretation of the terms and coverage of an insurance policy is a question of law and therefore appropriately resolved on summary judgment.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 see also B.M. Co. v. Avery}{\insrsid5338257\charrsid10838210 , 2001 Guam 27, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  9 (finding that an interpretation of a contract is reviewed }{\i\insrsid5338257\charrsid10838210 de novo}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
Because the interpretation of an insurance policy is a question of law, this [c]ourt must make its own determination of the meaning of the relevant contract language.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Conestoga Servs. Corp.}{\insrsid5338257\charrsid10838210 , 312 F.3d at 981; }{\i\insrsid5338257\charrsid10838210 see also B.M. Co.}{
\insrsid5338257\charrsid10838210 , 2001 Guam 27 at }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  9 (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 When the trial court looks merely to the contract language in interpreting the contract, and not to extraneous facts, the court}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s interpretation is a legal conclusion and is thus reviewed }{\i\insrsid5338257\charrsid10838210 
de novo}{\insrsid5338257\charrsid10838210 .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 )}{\insrsid5338257 
\par }{\b\insrsid10838210\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 A.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Duty to Defend vs. Duty to Pay Defense Costs.}{\insrsid5338257\charrsid10838210 

\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [14]}{\insrsid5338257\charrsid10838210 \tab In rendering summary judgment for GHURA, the lower court made two findings.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
First, that National Union had a duty to defend GHURA in the underlying suits, and, second, that because there was a duty to defend, National Union was not entitled to reimbursement of defense costs.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
National Union challenges both findings on appeal.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [15]}{\insrsid5338257\charrsid10838210 \tab The lower court and the parties have concentrated primarily on whether National Union had a duty to defend GHURA.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The lower court reasoned and the parties contend that if the insurer had a duty to defend the insured, then the insurer is not entitled to a reimbursement of defense costs.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
We agree that this is the rule to be applied when the policy contains a duty to defend.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
In such cases, the insurer is not entitled to a reimbursement of defense costs if the contractual duty to defend was triggered.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See United Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Ins. Co. v. SST Fitness Corp.}{\insrsid5338257\charrsid10838210 , 309 F.3d 914, 919 (6th Cir. 2002) (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[C]ourts . . . consistently have held that an insurer is entitled to reimbursement for defense costs when the insurer did not have the duty to defend any of the asse
rted claims and the insurer makes a valid reservation of rights to recoup defense costs. . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 However, a court must first determine whether the insurer had a duty to defend under the policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We find that th
e Policy here did not contain a duty to defend.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [16]}{\insrsid5338257\charrsid10838210 \tab }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[T]he duty to defend has no roots in the common law.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 
Allstate Ins. Co. v. RJT Enters.,}{\insrsid5338257\charrsid10838210  692 So. 2d 142, 144 (Fla. 1997); }{\i\insrsid5338257\charrsid10838210 Stamford Wallpaper Co. v. TIG Ins.}{\insrsid5338257\charrsid10838210 ,}{\i\insrsid5338257\charrsid10838210  }{
\insrsid5338257\charrsid10838210 138 F.3d 75, 79 (2d Cir. 1998) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 The nature of the insurer}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s duty to defend is purely contractual.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
There is no common law duty as to which the courts are free to devise rules.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ) (citation omitted); }{
\i\insrsid5338257\charrsid10838210 see also Horesh v. State Farm Fire & Cas. Co.}{\insrsid5338257\charrsid10838210 , 625 A.2d 541, 544 (N.J. Super. Ct. App. Div. 1993) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 The duty to defend is not a product of . . . common law, but is solely a contractual undertaking made in the insurance policy.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Rather, the duty to defend is }{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 purely a statutory or contractual duty.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Allstate Ins. Co.}{\insrsid5338257\charrsid10838210 , 692 So. 2d at 144.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, in determining whether the insurer has a duty to defend, the court must look to the contract, i.e., the insurance policy, or to any statute imposing such a duty.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Buss v. Superior Court}{
\insrsid5338257\charrsid10838210 , 939 P.2d 766, 774 (Cal. 1997) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 The duty to defend is contractual.}
{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [17]}{\insrsid5338257\charrsid10838210 \tab Most commercial general liability (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 CGL}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 )}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote 
\pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\fs20\insrsid5338257  }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 Before 1986, }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 commercial general liability insurance
}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  was called }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257 comprehensive general liability insurance}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 .}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Thommes v. Milwaukee Ins. Co.}{\fs20\insrsid5338257 , 641 N.W.2d 877, 880 n.1 (Minn. 2002); }{\i\fs20\insrsid5338257 
see Am. Star Ins. Co. v. Ins. Co. of the West}{\fs20\insrsid5338257 , 284 Cal. Rptr. 45, 46, n.1 (Ct. App. 1991) (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
The standard commercial insurance forms undergo revisions from time to time. The last major overhaul took effect 1986, when the name of the standard commercial policy was changed from }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 62 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 comprehensive}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  general liability to }{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 commercial}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257  general liability.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
).  The pre-1986 comprehensive general liability policies are also referred to, by courts, as CGL policies.  }{\i\fs20\insrsid5338257 See, e.g., Foster-Gardner, Inc. v. Nat}{\i\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\i\fs20\insrsid5338257 l Union Fire Ins. Co.}{\fs20\insrsid5338257 , 959 P.2d 265, 267 (Cal. 1998)}{\i\fs20\insrsid5338257 .}{\fs20\insrsid5338257   Notwithstanding, both}{\i\fs20\insrsid5338257  }{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
standard comprehensive [and] . . . commercial general liability insurance policies provide that the insurer has a duty to defend the insured in any action brought against the insured seeking damages for a covered claim.}{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Aerojet-General Corp. v. Transport Indem. Co.}{\fs20\insrsid5338257 , 948 P.2d 909, 920 (Cal. 1997).}}}{
\insrsid5338257\charrsid10838210  insurance policies contain a standard clause explicitly imposing a duty to defend.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 FMC Corp. v. Plaisted and Cos.}{\insrsid5338257\charrsid10838210 
, 72 Cal. Rptr. 2d 467, 508 (Ct. App. 1998) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
Primary CGL policies typically provide that . . . the insurer }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
shall have the right and duty, subject to [specified policy] provisions . . . , to defend any suit against the }{\i\insrsid5338257\charrsid10838210 insured}{\insrsid5338257\charrsid10838210  seeking damages on account of such }{
\i\insrsid5338257\charrsid10838210 personal injury}{\insrsid5338257\charrsid10838210  or }{\i\insrsid5338257\charrsid10838210 property damage,}{\insrsid5338257\charrsid10838210 
 even if any or all of the allegations of the suit are groundless, false or fraudulent.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ) (citation omitted) (alteration and second omission in original).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
However, the Policy in the present case is not a CGL policy; rather, it is a Public Officials and Employees Liability Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The Policy provided in pertinent part:
\par }{\insrsid10838210 
\par }\pard \qj \li720\ri0\nowidctlpar\faauto\rin0\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 2.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Defense Costs, Charges & Expenses (Included in the Limits of Liability)
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
With respect to any such Wrongful Act for which insurance is afforded by this policy under Insuring Agreement 1, above, the Company shall, as part of and subject to the limits of liability, pay on behalf of the Insured Defense Costs, Charges and Expenses.

\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid10838210 {\i\insrsid5338257\charrsid10838210 The Company shall at all times have the right but not the duty to assume the defense of any claim or suit against the Insured}{
\insrsid5338257\charrsid10838210 , and in the event of the exercise of this right the Insured shall provide the Company with full cooperation.
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Excerpts of Record, vol. I, p. 190 (Policy) (emphasis added).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 As referenced above, the Policy did not contain an express duty to defend.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote 
\pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
The Policy here resembles a professional liability policy such as a directors and officers (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 D&O}{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 ) policy.  }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
The defense obligations of D & O carriers typically differ in nature and in scope from the defense obligations of general liability carriers.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Helfand v. Nat}{\i\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\i\fs20\insrsid5338257 l Union Fire Ins. Co. of Pittsburgh}{\fs20\insrsid5338257 
, 13 Cal. Rptr. 2d 295, 298 (Ct. App. 1992).  Unlike a CGL policy, D&O policies generally do not }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
obligate the carriers to provide the insured with a defense.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Id}{\fs20\insrsid5338257 .; }{
\i\fs20\insrsid5338257 see Nat}{\i\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\i\fs20\insrsid5338257 l Union Fire Ins. Co. of Pittsburgh v. Ambassador Group, Inc.}{\fs20\insrsid5338257 
, 556 N.Y.S.2d 549, 553 (App. Div. 1990) (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 [M]ost directors and officers liability policie
s do[ ] not impose an obligation to provide a defense, but only to reimburse expenses incurred in the defense.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 ); }{
\i\fs20\insrsid5338257 Gon v. First State Ins. Co.}{\fs20\insrsid5338257 , 871 F.2d 863, 868 (9th Cir. 1989) (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
Directors and officers liability policies generally do not contain a duty to defend.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 ).}}}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Cf. Univ. of Ill. v. Cont}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Cas. Co.}{
\insrsid5338257\charrsid10838210 , 599 N.E.2d 1338, 1343-44 (Ill. App. Ct. 1992) (noting that the policy did not provide a duty to defend).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [18]}{\insrsid5338257\charrsid10838210 \tab Under Guam law, the fact that the insurance policy does not contain a duty to defend is not necessarily determinative.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Pursuant to Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  30107}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote 
\pard\plain \qj \fi720\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 Title 18 GCA }{\fs20\insrsid5338257 {\field{\*\fldinst 
SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  30107 provides:
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 
\par }\pard \qj \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0 {\fs20\insrsid5338257 In the interpretation of a contract of indemnity, the following rules are to be applied, }{\i\fs20\insrsid5338257 unless a contrary intention appears}{
\fs20\insrsid5338257 :
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 . . . .
\par }\pard \qj \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0 {\fs20\insrsid5338257 4. }{\i\fs20\insrsid5338257 
The person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity,}{\fs20\insrsid5338257  
but the person indemnified has the right to conduct such defenses, if he chooses to do so;
\par . . . .
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\insrsid5338257 
\par }\pard \qj \li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 Title 18 GCA }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 30107 (1994) (emphasis added).  This section applies to the interpretation of insurance contracts because }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
[a]ll insurance policies are contracts of indemnity . . . .}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Univ. of Ill.}{\fs20\insrsid5338257 
, 599 N.E.2d at 1346.}}}{\insrsid5338257\charrsid10838210 , }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 [a] policy whi
ch does not contain an express duty to defend should nevertheless be interpreted to include a duty to defend unless a contrary intention appears.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Save Mart Supermarkets v. Underwriters at Lloyd}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\i\insrsid5338257\charrsid10838210 s London}{\insrsid5338257\charrsid10838210 , 843 F. Supp. 597, 602 (N.D. Cal. 1994) (interpreting Cal. Civ. Code }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  2778, which mirrors Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 30107).
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [19]}{\insrsid5338257\charrsid10838210 \tab The Policy specifically stated that National Union had the }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 right }{\i\insrsid5338257\charrsid10838210 but not the duty to assume the defense of any claim or suit against the Insured}{\insrsid5338257\charrsid10838210 .}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, p. 190 (Policy) (emphasis added).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
This language expresses an intent that there be no duty to defend.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Cf. Save Mart Supermarkets}{\insrsid5338257\charrsid10838210 
, 843 F. Supp. at 603 (finding that the policy language which gave the insurer the }{\i\insrsid5338257\charrsid10838210 option }{\insrsid5338257\charrsid10838210 to join in the defense directly contradicted any possible }{
\i\insrsid5338257\charrsid10838210 duty}{\insrsid5338257\charrsid10838210  to defend; therefore, the insurer did }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 not have a duty to defend under Cal. Civ. Code }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 2778(4) because a contrary intention appears}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 
Valassis Communications, Inc. v. Aetna Cas. & Sur. Co.}{\insrsid5338257\charrsid10838210 , 97 F.3d 870, 876 (6th Cir. 1996) (determining that the insurer did not have a duty to defend because the policy specifically declared that }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 nothing in this paragraph is intended, nor shall it be construed, to create any duty to defend . . . .}
{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ) (citation omitted).}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain 
\qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 This interpretation is not affected by the clause in t
he Policy which provides that National Union was required to pay defense costs.  }{\i\fs20\insrsid5338257 See}{\fs20\insrsid5338257  }{\i\fs20\insrsid5338257 Gon}{\fs20\insrsid5338257 , 871 F.2d at 867-68 (rejecting the insured}{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s argument that the requirement of payment of defense costs as incurred amounts to a duty to defend);}{\i\fs20\insrsid5338257  Valassis}{
\fs20\insrsid5338257 , 97 F.3d at 876 (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
A commitment by the insurance company to reimburse the defense costs does not create a duty to defend on the part of the insurance company.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257 ).  The clause which allows National Union the }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 right}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL
 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  to assume the defense on GHURA}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
s behalf similarly does not create a duty to defend.  A policy with a duty to defend }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
typically contains a clause that provides that the insurer chooses the attorney and controls the strategy of the litigation, a valuable right to protect the insurer}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s own interest.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Gon}{\fs20\insrsid5338257 
, 871 F.2d at 868.  While the Policy here presents an }{\i\fs20\insrsid5338257 opportunity }{\fs20\insrsid5338257 to control the defense, the Policy does not mandate that National Union be }{\i\fs20\insrsid5338257 required}{\fs20\insrsid5338257 
 to choose an attorney and control the litigation strategy in all cases.}}}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [20]}{\insrsid5338257\charrsid10838210 \tab Thus, under the Policy, National Union did not have a duty to defend GHURA.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Consequently, the lower court}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s conclusion that National Union was not entitled to a reimbursement }{
\i\insrsid5338257\charrsid10838210 because it had a duty to defend}{\insrsid5338257\charrsid10838210  was erroneous in light of the Policy language.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Gon v. First State Ins. Co.}{
\insrsid5338257\charrsid10838210 , 871 F.2d 863, 867-68 (9th Cir. 1989) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
The district court . . . conclude[d] that First State had a duty to defend. We disagree with that conclusion, and believe there is no duty to defend under the terms of the First State policy.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The issue remaining is whether National Union is entitled to a reimbursement of costs it expended in defending GHURA.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 In answering that question, we must look to the relevant provisions of the Policy.

\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [21]}{\insrsid5338257\charrsid10838210 \tab Section 2 of the Insuring Agreement of the Policy provided that National Union would }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 pay on behalf of the insured Defense Costs}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 with respect to a
ny such Wrongful Act for which insurance is afforded by th[e] policy under Insuring Agreement 1.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Excerpts of Record, vol. II, p. 471 (Policy).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We interpret this in accordance with its plain meaning, that Natio
nal Union was responsible for paying defense costs incurred in defending claims for covered, non-excluded, wrongful acts.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Indep. Sch. Dist. No. 697, Eveleth v. St. Paul Fire & Marine Ins. Co.}{
\insrsid5338257\charrsid10838210 , 515 N.W.2d 576, 579 (Minn. 1994) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
Generally, an insurance contract must be construed as a whole, and unambiguous language must be given its plain and ordinary meaning.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ) (citatio}{\insrsid10838210 n and quotation marks omitted).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [22]}{\insrsid5338257\charrsid10838210 \tab 
In determining whether National Union was required to pay defense costs, we review the allegations in the third-party complaint and compare it with the coverage afforded under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
If the allegations in the underlying complaints stated a claim for which there was a possibility of coverage under the Policy, National Union was obligated to pay defense costs.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 
See Okada v. MGIC Indem. Corp.}{\insrsid5338257\charrsid10838210 , 823 F.2d 276, 282 (9th Cir. 1986);}{\i\insrsid5338257\charrsid10838210  Gon}{\insrsid5338257\charrsid10838210 , 871 F.2d at 868.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
This inquiry is similar to the inquiry made in determining whether the duty to defend is triggered, and cases discussing the duty to defend are therefore instructive.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain 
\qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
The test for determining whether the duty to defend was triggered is especially appropriate for application in this case because under the Policy, National Union was given the option to control the defense of claims filed against GHURA.}}}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Lowy v. Travelers Prop. & Cas. Co.}{\insrsid5338257\charrsid10838210 , 2000 WL 526702, *2, n.1 (S.D.N.Y. 2000) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 [T]here is no relevant difference between the allegations that trigger an insurer}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s duty to defend and the allegations that trigger an insurer}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 s obligation to pay defense expenses.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 In determining whether the duty to defend, or, as here, whether the obligation to pay defense costs, is triggered, the focus is on the facts in the complaint and those known to the insurer }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 regardless of the technical legal cause of action pleaded by the third party.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Cort}{\insrsid5338257\charrsid10838210 ,}{\i\insrsid5338257\charrsid10838210  }{
\insrsid5338257\charrsid10838210 311 F.3d at 983.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 There is no duty to defend or obligation to pay defense costs }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 [i]f a third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 . (citation omitted) (stating the test for determining
 whether the duty to defend is triggered); }{\i\insrsid5338257\charrsid10838210 Fuisz v. Selective Ins. Co. of Am.}{\insrsid5338257\charrsid10838210 , 61}{\insrsid10838210  F.3d 238, 242 (4th Cir. 1995).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [23]}{\insrsid5338257\charrsid10838210 \tab The insured carries the initial burden to show that the }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 claim }{\i\insrsid5338257\charrsid10838210 may }{\insrsid5338257\charrsid10838210 fall within the policy coverage.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Pension Trust Fund for Operating Eng}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\i\insrsid5338257\charrsid10838210 rs v. Fed. Ins. Co.}{\insrsid5338257\charrsid10838210 , 307 F.3d 944, 949 (9th Cir. 2002) (citation omitted).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The insur
er carries the higher burden of showing that the claim cannot.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Furthermore, }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[w]hen an exclusionary clause is relied upon to deny coverage, the burden rests upon the insurance company to demonstrate that the allegations of the complaint can be interpreted only to exclude coverage.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Town of Massena v. Healthcare Underwriters Mut. Ins. Co.}{\insrsid5338257\charrsid10838210 
, 779 N.E.2d 167, 170 (N.Y. 2002); }{\i\insrsid5338257\charrsid10838210 Fuisz}{\insrsid5338257\charrsid10838210 , 61 F.3d at 242 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 [T]he burden rests on the insurer to establish the clear applicability of a particular exclusion from coverage.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Like any other contract, the intent of the parties should be gleaned from the unambiguous language.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Yasuda Fire & Marine Ins. Co. v. Heights Enters.}{\insrsid5338257\charrsid10838210 , 1998 Guam 5, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  13.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Generally, the words of the policy }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 should be given an ordinary meaning . . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Camacho v. Camacho}{\insrsid5338257\charrsid10838210 , 1997 Guam 5, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  33.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 However, if the language of the policy is ambiguous, the ambiguity must be interpreted in light of the objective reasonable expectations of the insured.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Yasuda Fire & Marine Ins. Co.}{\insrsid5338257\charrsid10838210 , 1998 Guam 5, at }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  13}{\i\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 [I]f found to be ambiguous, the terms of a promise are to be interpreted in the manner in which the promisor believed the promisee understood it at the time of its making.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
If application of the doctrine of reasonable expectations fails to resolve the ambiguity, the ambiguity is to be construed in favor of the insured.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id}{\insrsid5338257\charrsid10838210 .}{
\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 B.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Whether National Union had a Duty to Pay Defense Costs.}{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [24]}{\insrsid5338257\charrsid10838210 \tab On appeal, National Union does not contest that the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  allegations of wrongful termination were }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Wrongful Acts
}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  as defined under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Rather, National Union cites various exclusions in the Policy, as well as statutory authority, as support for its contention that the wrongful acts alleged in the complaints were excluded from coverage.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn 
{\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
Reliance on exclusions in determining whether there was a duty to pay defense costs is proper in this case because the Policy specifically limit
ed coverage for defense costs to costs associated with claims for wrongful acts for which coverage was afforded under the Policy.}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [25]}{\insrsid5338257\charrsid10838210 \tab In accordance with the Policy language, National Union was required to provide coverage for }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Wrongful Acts.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Under the Policy, a }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Wrongful Act}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  was defined as follows:}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
Wrongful Act means any actual or alleged error or misstatement or misleading statement or act or omission or neglect or breach of duty, including misfeasance, malfeasance and nonfeasance.
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Excerpts of Record, vol. I, p. 191 (Policy).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 National Union contends that the following types of risks were excluded from coverage under the Policy thereby frustrating GHURA}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s expectation of coverage for defense costs:}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 b) claims alleging . . . malicious acts;
\par c) any claim seeking non-pecuniary relief;
\par . . . 
\par n) any awards . . . of back salary or wages or other employee compensation;
\par . . . 
\par p) any Wrongful Act committed with knowledge that it was a Wrongful Act.
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Excerpts of Record, vol. I, p. 191-192 (Policy).
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [26]}{\insrsid5338257\charrsid10838210 \tab 
We must therefore determine whether the allegations of the complaints and facts known to National Union at the time of the complaints stated a claim for which there was a potential for coverage in light of the relevant Policy exclusions.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Andover Newton Theological Sch. v. Cont}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\i\insrsid5338257\charrsid10838210 l Cas. Co.}{\insrsid5338257\charrsid10838210 , 930 F.2d 89, 96 (1st Cir. 1991) (finding that the claims alleged conduct which was covered under the policy and the only relevant question was the scope of the exclusion).}{
\i\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 1.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 District Court Case No. CV97-00080}{\cs15\super\insrsid5338257\charrsid10838210 
\chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 
This action was filed against GHURA and all then-members of GHURA}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s Board of Commissioners, individually, and in the
ir capacities as Board members.  }{\i\fs20\insrsid5338257 See}{\fs20\insrsid5338257  Excerpts of Record, vol. I, pp. 9-10.}{\insrsid5338257   }}}{\insrsid5338257\charrsid10838210  }{\b\insrsid5338257\charrsid10838210 and Superior Court Case No. CV0410-99}
{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{
\fs20\insrsid5338257 GHURA was the named defendant in this action.}}}{\insrsid5338257\charrsid10838210 .
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }\pard \qj \fi1440\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 a)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Allegations in the Complaint.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [27]}{\insrsid5338257\charrsid10838210 \tab The first two complaints for which N
ational Union seeks reimbursement of defense costs, (Dist. Ct. Case No. CV97-00080; Super. Ct. Case No. CV0410-99), contained virtually identical factual allegations.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain 
\qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\i\fs20\insrsid5338257 See }{\fs20\insrsid5338257 
Excerpts of Record, vol. I, Ex. A, pp. 10-22 (Complaint, Dist. Ct. Case No. CIV97-00080), pp. 105-112 (Complaint, Super. Ct. Case. No. CV0410-99).}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
These are summarized as follows: The Employees were hired at GHURA during Former Governor Joseph Ada}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s administration.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The Employees had no particular political affiliation but did not support or campaign for Carl T.C. Gutierrez in the 1994 gubernatorial race.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  respective positions did not entail
 duties which would render relevant the political affiliation of their occupants.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
GHURA could not demonstrate that an affiliation with a political party, and in particular, Carl T.C. Gutierrez, was necessary for the effective performance of their job duties.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [28]}{\insrsid5338257\charrsid10838210 \tab Without notice of possible adverse action, notice of reclassification hearing, and an opportunity to respond to the charges, as guaranteed to the government}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s classified employees under 48 U.S.C. }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  1422c, Title 4 GCA, Chapter 4, and GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}
{\insrsid5338257\charrsid10838210 s Personnel Rules and Regulations, the defendants, including GHURA, through a Board of Commissioner}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s Resolution dated February 22, 1995, converted the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 classified positions into unclassified positions, in violation of the above-mentioned statutes and rules.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Furthermore, on Friday, Marc
h 3, 1995, the defendants, without cause, notice, and pre-termination hearing or an opportunity to respond, informed the Employees that as of that date, they were terminated.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [29]}{\insrsid5338257\charrsid10838210 \tab The Employees further alleged that the dismissals from their positions were }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 due to their lack of political affiliation with the administration of Governor Carl T.C. Gutierrez.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, p. 18 (Complaint).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 They additionally alleged that their dismissals were }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
the result of their exercising their freedom of speech and freedom of association rights guaranteed them by the [F]irst Amendment of the U.S. Constitution,}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  and that as a result, the defendants }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
have acted beyond their authority and in direct violation of the law.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Excerpts of Record, vol. I, p. 19 (Complaint).
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [30]}{\insrsid5338257\charrsid10838210 \tab Finally, the Employees alleged that as a result of the defendants}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  actions, they were grievously damaged in having lost a valuable property right in their employment with GHURA, and suffered emotional and mental anguish.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 

\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [31]}{\insrsid5338257\charrsid10838210 \tab In the District Court complaint (CV97-00080), the Employees asserted jurisdiction under 42 U.S.C. }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  1983.}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 That section provides: }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt
\f36\fs20}}}{\fs20\insrsid5338257 Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia
, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, }{\i\fs20\insrsid5338257 
shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress}{\fs20\insrsid5338257 , except that in any action brought against a judicial officer for an act or omission taken in such officer}{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s judicial capacity, injunctiv
e relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
  Title 42 U.S.C.A. }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  1983 (2002) (emphasis added).}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Simi
larly, in the Superior Court suit (CV0410-99), the Employees alleged the same claims as those enumerated in the District Court action, but the precise nature of their theory of recovery is unclear from the allegations and claims.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, pp. 114-16 (Complaint).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
In both complaints, the Employees presented the following causes of action or }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 counts}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\fs20\insrsid5338257  In both complaints, the Employees identified their separate claims as }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 counts.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}}}{\insrsid5338257\charrsid10838210 :}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-540\li1260\ri720\nowidctlpar\tx-1440\tx-720\tx0\tx720\tx1260\tx2160\faauto\rin720\lin1260\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (1)\tab damages for violating their Due Process rights under the Fourteenth Amendment 
\par (2)\tab damages for violating their guarantee to equal protection of the law under the Fourteenth Amendment for terminating them without affording rights available to other classified government employees;
\par (3)\tab damages for violating their rights to free speech, expression, and association by illegally terminating them on the }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 same day . . at the same time . . .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 for the same reasons, allegedly for }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 non-support of Governor Carl T.C. Gutierrez during his campaign for governor}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  and }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 high visibility}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  support for the republican opponent of Governor Gutierrez . . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ;
\par (4)\tab penalty damages for violating Title 42, Chapter 2, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  46030(a), which mandates that an employee
}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s last paycheck is due on the date of termination;
\par (5)\tab breach of employment contract which were }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 willfully, unlawfully and maliciously done,}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  because classified employees have property rights in their employment;
\par (6)\tab injunctive relief to being restored to their positions for the acts which were }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
willfully, unlawfully, and maliciously done}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  and back pay commencing from the date of termination;

\par (7)\tab punitive damages for the acts of wrongful termination and the infliction of emotional distress because }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 Defendants}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  termination of Plaintiffs were delibe
rate, cruel, malicious, spiteful, vulgar, nasty, vindictive, mean spirited and vicious . . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\tx-720\tx0\tx720\tx1260\tx2160\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 Excerpts of Record,}{\insrsid10838210  vol. I, pp. 26-31 (Complaint).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi1440\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 b)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Comparison to the Policy.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [32]}{\insrsid5338257\charrsid10838210 \tab Viewing the allegations of the complaints, it is clear that the Employees alleged claims for violation of their constitutional and statutory rights.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 As stated earlier, National Union does not contest that the above-mentioned complaints were prompted by GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 s actions which are }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Wrongful Acts}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  as defined in the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We agree.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Indep. Sch. Dist. No. 697, Eveleth}{\insrsid5338257\charrsid10838210 , 515 N.W.2d at 579 (finding that a claim against employees for age discrimination was covered under a policy covering }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
wrongful acts based on: an error or omission, negligence, breach of duty, misstatement or misleading statement}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The determinative question is whether the wrongful acts could not potentially fall within coverage under the Policy because they fell exclusively within an exclusion.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 
New Madrid County Reorganized Sch. Dist. No. 1, Enlarged v. Cont}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Cas. Co.}{
\insrsid5338257\charrsid10838210 , 904 F.2d 1236, 1240 (8th Cir. 1990) (finding that coverage applied to the employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  19
83 action because the allegations amounted to wrongful acts and there was no exclusion prohibiting coverage).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 This requires an analysis of the complaint in light of the exclusions.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [33]}{\insrsid5338257\charrsid10838210 \tab National Union contends that the claims in the complaints should be v
iewed in light of the basic allegation that GHURA acted in a purposeful and malicious way to deny the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  rights based on their political affiliation.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Viewed this way, GHURA argues that the entire complaints would fall within one or more exclusions under the Policy.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 We think the proper course is to separately consider the individual claims within each complaint.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Cort}{\insrsid5338257\charrsid10838210 
, 311 F.3d at 983-87 (reviewing separately whether the insurer had a duty to defend a claim in the complaint alleging violating }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  106A of the Visual Artists}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  Rights Act of 1991 (}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 VARA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ), and another claim alleging violation of section 17200 of the California Bus. & Prof. Code).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The claims are discussed below. 
\par }{\b\insrsid10838210 
\par }\pard \qj \fi2160\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 1)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Due Process, Equal Protection, and First Amendment Claims.}{
\b\insrsid5338257 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [34]}{\insrsid5338257\charrsid10838210 \tab In their complaints, the Employees alleged that GHURA violated their due process, equal protection, and First Amendment rights.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 We find that these claims were not excluded from coverage under the Policy.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [35]}{\insrsid5338257\charrsid10838210 \tab With regard to these claims, National Union highlights Exclusion (p) in the Policy which bars coverage for }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 any Wrongful Act committed with knowledge that it was a Wrongful Act.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, p. 191-92 (Policy).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
National Union argues that Exclusion (p) is an intentional acts exclusion.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We disagree.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
First, National Union has not cited any cases that have interpreted this exclusion to bar intentional acts.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Moreover, in covering }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Wrongful Acts}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 as defined in the Policy, it is clear that the Policy covered intentional acts.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See New Madrid}{\insrsid5338257\charrsid10838210 , 904 F.2d at 1239 (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 The term }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 wrongful acts}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 can fairly be read to encompass more affirmative, willful behavior than can the phrase }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 negligen
t acts, errors, and omissions.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 To read Exclusion (p) to bar intentional acts would be completely inconsistent with the insuring clause thus creating an ambiguity w
hich is to be interpreted in light of the reasonable expectations of the insured.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See W. Cas. Co. v. Adams County}{\insrsid5338257\charrsid10838210 , 534 N.E.2d 1066, 1070 (Ill. App. Ct. 1989).}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Exclusion (p) is not reasonably interpreted to exclude intentional acts.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Rather, it is reasona
bly interpreted as barring coverage for acts of the insured which are accomplished with the awareness that such act is a wrongful act.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
If National Union intended the exclusion to cover intentional acts, it could have drafted the exclusion more precisely.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See, e.g., Chandler v. Ala. Mun. Ins. Co.}{\insrsid5338257\charrsid10838210 
, 585 So. 2d 1365, 1366 (quoting a policy covering wrongful acts which excluded }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
Claims or Suits for Damages which result from a Wrongful Act committed intentionally with knowledge of wrongdoing.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [36]}{\insrsid5338257\charrsid10838210 \tab Thus, we interpret Exclusion (p) in accordance with its plain language, as only barring coverage for intentional acts which were done with appreciation of its wrongfulness.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Furthermore, the obligation to pay defense costs is not defeated merely because the claimant alleges that the insured had knowledge that what he or she was doing was wrongful.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Solo Cup Co. v. Fed. Ins. Co.}{\insrsid5338257\charrsid10838210 , 619 F.2d 1178, 1184-85 (7th Cir. 1980).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Rathe
r, the court must look to the elements necessary to recover on the underlying cause of action.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
If liability could have been found without a determination that GHURA had knowledge of the wrongfulness of its actions towards the Employees, National Union had an obligation under the Policy to pay defense costs.}{
\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{
\fs20\insrsid5338257 We acknowledge that there are few, if any, causes of action which require a claimant to prove awareness of wrongfulness.  This fact, however, is not our concern.  We are merely required to in
terpret the contract as written, in light of the plain language and the reasonable expectations of the insured.  If the Policy is drafted in a way that will never be of benefit to the insurer, the disadvantage created therein must fall on the shoulders of
 the drafter. }}}{\insrsid5338257\charrsid10838210  
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [37]}{\insrsid5338257\charrsid10838210 \tab Having considered Exclusion (p) as interpreted above, we find that the claims for violations of the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  due process, equal protection, and First Amendment rights did not fall within the exclusion and were potentially covered under the Policy.}{\insrsid5338257 

\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [38]}{\insrsid5338257\charrsid10838210 \tab All three constitutional claims were actionable under 42 U.S.C. }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  1983.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Zinermon v. Burch}{\insrsid5338257\charrsid10838210 , 494 U.S. 113, 125, 110 S. Ct. 975, 983 (1990) (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 A }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 1983 action may be brought for a violation of procedural due process . . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 Birnbaum v. Trussell}{\insrsid5338257\charrsid10838210 , 371 F.2d 672, 679 (2d Cir. 1966);}{\i\insrsid5338257\charrsid10838210  Carey v. Piphus}{\insrsid5338257\charrsid10838210 
, 435 U.S. 247, 254-67, 98 S. Ct. 1042, 1047-54, n.11 (1978) (recognizing that in an action under section 1983 for a procedural due process violation, the plaintiff may recover damages, either nominal, actual, or punitive); }{
\i\insrsid5338257\charrsid10838210 Annis v. County of Westchester, N.Y.}{\insrsid5338257\charrsid10838210 , 36 F.3d 251, 253-54 (2d Cir. 1994) (recognizing that a violation of the Equal Protection Clause is actionable under }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  1983); }{\i\insrsid5338257\charrsid10838210 Kreuzer v. Brown}{\insrsid5338257\charrsid10838210 
, 128 F.3d 359, 362 (6th Cir. 1997) (analyzing whether summary judgment for the defendant should be affirmed on plaintiff}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s claim brought under section 1983 for dismissal based on political affiliation).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The three claims encompassed state-of-mind requirements beyond mere negligence to support recovery.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Jordan v. Fox, Rothschild, O}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 Brien & Frankel}{\insrsid5338257\charrsid10838210 , 20 F.3d 1250, 1277 (3d Cir. 1994) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 In }{\i\insrsid5338257\charrsid10838210 Daniels}{\insrsid5338257\charrsid10838210  the Supreme Court stated a plaintiff who wishes to sustain a }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  1983 claim based upon a violation of procedural due process must, at a minimum, prove recklessness or 
}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 gross negligence}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  and in some instance may be required to show a }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 deliberate decision to deprive}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  the plaintiff of due process.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 Personnel Adm}{\i\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 r of Mass. v. Feeney}{\insrsid5338257\charrsid10838210 
, 442 U.S. 256, 271-72, 99 S. Ct. 2282, 2292-93 (1979) (discussing the intent requirement in a claim of a violation of equal protection); }{\i\insrsid5338257\charrsid10838210 Kreuzer}{\insrsid5338257\charrsid10838210 
, 128 F.3d at 363 (finding that to establish a First Amendment claim of patronage dismissal, the plaintiff must show that }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 her political affiliation was a }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 substantial}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  or }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 motivating}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 factor behind the adverse employment action.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Nonetheless, while proof of negligence is not enough to recover, we have not found any cases which hold that the claimant must prove that the defendant acted with knowledge that what he or she was doing was wrongful.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Accordingly, the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 due process, equal protection, and First Amendment claims were covered under the Policy and were not barred by Exclusion (p).}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain 
\qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 Note that }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 [a] termination in violation of fundamental public policy has been found to be }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 ex delictu}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 and thus enforceable by a tort action, because the action redresses a discharge that clearly violated an express statutory objective or undermined a firmly established principle of public policy.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 B & E Convalescent Ctr. v. State Comp. Ins. Fund}{\fs20\insrsid5338257 , 9 Cal. Rptr. 2d 894, 907 (Ct. 
App. 1992) (citations and internal quotations and brackets omitted).  However, }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 such claim can }{\i\fs20\insrsid5338257 only}{
\fs20\insrsid5338257  be established by evidence of an employer}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 s motive and intent to vio
late or frustrate the law(s) declaring or establishing fundamental public policy.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   }{\i\fs20\insrsid5338257 Id}{
\fs20\insrsid5338257 . at 907-08; }{\i\fs20\insrsid5338257 see also Cagle v. Burns and Roe, Inc.}{\fs20\insrsid5338257 , 726 P.2d 434, 436 (Wash. 1986) (en banc) (}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 [W]rongful termination of employment in violation of public policy can be accurately characterized as intentional tort.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 ).  Even assuming claims under this theory required that the plaintiff prove th
at the acts were done with knowledge that they were wrongful, we find that National Union would nonetheless be obligated to pay defense costs.  Because the due process, equal protection, and First Amendment claims are also actionable under }{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  1983, }{\i\fs20\insrsid5338257 see Swedlund v. Foster}{\fs20\insrsid5338257 , 657 N.W.2d 39, 46 (S.D. 2003) (}{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 A claim for violation of civil rights under 42 U.S.C. }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  1983 can be brought in either federal or state court.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257 ), and would be covered if brought pursuant to that section, there exists the }{\i\fs20\insrsid5338257 potential}{\fs20\insrsid5338257  for coverage under the Policy, thus obligating National Union to pay defense costs.}}}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Melugin v. Zurich Canada}{\insrsid5338257\charrsid10838210 
, 57 Cal. Rptr. 2d 781, 785 (Ct. App. 1996) (finding that the insurer had a duty to defend the complaint alleging sexual discrimination because }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 there could be some ac
ts occurring in the working world which would constitute sexual discrimination in employment, but which would only involve unintentional, negligent conduct, for which coverage might exist.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Because there was a potential for coverage, National Union was contractually obligated to pay }{
\insrsid10838210 defense costs for those claims.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi2160\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 2)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Damages for Back Wages and Penalties }{
\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [39]}{\insrsid5338257\charrsid10838210 \tab In their Complaints, the Employees alleged that GHURA violated Title 42, Chapter 2 of the Fair Labor Standards Act, Government Code }{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 46030(a), which, according to the Employees, mandates that an employee}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s last paycheck is due on the date of termination.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The Employees
 sought damages equal to three times the amount of their last paycheck, as well as all back pay due to the Employees from }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 March 3, 1995 through the date of settlement}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  to each Employee.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Record on Appeal, Tab 1 (Complaint, Ex. A, p. 16).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [40]}{\insrsid5338257\charrsid10838210 \tab The Employees sought recovery under the wage provision currently codified at Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  3201(a), which provides:}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 The earned wag
es of all employees shall be due and payable within seven (7) days after the end of each pay period, except that: (a) the earned wages of all employees discharged [by] the employer either with or without cause shall be immediately due and payable upon dis
charge. 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3201(a) (1994).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The penalties for failure to comply with section 3201(a) are set forth in 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 3219(a), which provides:}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (a) 
Except for government entities, any employer who fails to pay one (1) or more employees wages when due or who underpays an employee }{\i\insrsid5338257\charrsid10838210 
shall pay punitive damages to the employee of three (3) times the wages due, unless the employer can establish, as an affirmative defense in equity, by a preponderance of the evidence, that}{\insrsid5338257\charrsid10838210 :
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (1) In the case of non-payment, the employer did not have the ability to pay the wages due; and}{\insrsid5338257 
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (2) The employer complied with all other provisions of this Chapter; and}{\insrsid5338257 
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (3) There was no fraud committed against any employee by the employer in the computation of wages; and}{\insrsid5338257 

\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
(4) The employer was in substantial compliance with all territorial and federal laws as to wage and hours matters relating to employees, and that any non-compliance was in good faith; and}{\insrsid5338257 
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
(5) In the case of non-payment, managers or officers of the employer were not given priority in the disbursement of wages or allowances; and}{\insrsid5338257 
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (6) In the case of non-payment, the employer complied with the requirements of }{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3213 [of] this Code; and
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (7) The employer comes before the court with clean hands; and
\par }\pard \qj \li0\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \fi-22\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (8) In the case of an underpayment, the underpayment was a good faith error with no intent to defraud.
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3219(a) (1994) (emphasis added).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [41]}{\insrsid5338257\charrsid10838210 \tab In determining whether National Union was obligated to pay defense costs for this claim for back wages and penalty damages, the question is whether the claim was potentiall
y covered under the Policy.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Okada}{\insrsid5338257\charrsid10838210 , 823 F.2d at 282.}{\i\insrsid10838210  }{\insrsid5338257\charrsid10838210 
After reviewing the relevant exclusions in the Policy, we find that the claim for back pay was excluded from coverage under Exclusion (n), which barred coverage for awards of back wages or employee compensation.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 We note that Exclusion (n) excluded }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 awards}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  of wages and back pay, and not }{\i\insrsid5338257\charrsid10838210 claims}{
\insrsid5338257\charrsid10838210  seeking wages and back pay.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 However, where the claim seeks an award of back pay as its sole relief, the claim itself would necessarily be excluded from coverage.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Because awards of back pay were completely excluded, it cannot be concluded that there was a potential for coverage for a claim solely seeking an award of back pay.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Therefore, National Union would have no obligation to pay defense costs for such claim. 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [42]}{\insrsid5338257\charrsid10838210 \tab Furthermore, we find that the claim for damages in the amount of triple the amount of wages owed was excluded under Exclusion (q) which provided:
\par }{\insrsid10838210 
\par }\pard \qj \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 This Policy does not apply:}{\insrsid5338257 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi1440\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 . . .
\par }\pard \qj \li0\ri720\nowidctlpar\tx-1440\faauto\rin720\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \li1440\ri720\nowidctlpar\tx-1440\faauto\rin720\lin1440\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
(q) to fines, penalties, or punitive, exemplary or multiplied damages; however, only where permitted by law, this policy shall cover, subject to all the terms, conditions and exclusions contained herein, up 
to $25,000 punitive, exemplary or multiplied damages, as part of or not in addition to the limits of the Company's liability otherwise afforded by this policy.
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Excerpts of Record, vol. I, p. 191-92 (Policy). 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [43]}{\insrsid5338257\charrsid10838210 \tab Title 22 }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 3219(a) clearly states that an employer who withholds the payment of wages, or underpays an employee, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 shall pay }{\i\insrsid5338257\charrsid10838210 punitive damages}{\insrsid5338257\charrsid10838210  to the employee of three (3) times the wages due.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  3219(a) (emphasis added).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The damages recoverable under the statute plainly serve as a penalty for the failure to pay wages as required under the Fair Labor Standards 
Act.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Because the Policy specifically excluded }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
fines, penalties, or punitive, exemplary or multiplied damages,}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  the Employees}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  claim for damages pursuant to section 3219(a) was excluded from coverage.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 We further note that the proviso in Exclusion (q) allowing coverage of up to $25,000 for punitive damages where }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 permitted by law}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  did not apply to the Employees}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 claim because under section 3219(a), recovery of punitive damages is only permitted against non-government entities.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Because GHURA is a government entity}{\cs15\super\insrsid5338257\charrsid10838210 
\chftn {\footnote \pard\plain \qj \fi720\li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 We find that GHURA is a }{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 government entity}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{
\fs20\insrsid5338257  as used in section 3219(a).  This is evident upon review of the definitions portion of the Fair Labor Standards Act.  There, an }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt
\f36\fs20}}}{\fs20\insrsid5338257 employer}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  is defined to include various types of private business entities and }{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 government entities or instrumentalities.}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257   22 GCA }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  3104.  GHURA is logically included in the phrase }{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 government entities}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}
{\fs20\insrsid5338257  because if not, this would lead to the absurd conclusion that GHURA is not an }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 employer}{
\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  under the Fair Labor Standards Act and is therefore exempt from the various provisions governing }{\fs20\insrsid5338257 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 employers}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 under Act.  Because GHURA is a }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 government entity}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  under the definitions portion of the Act, it is consistent that they be considered a }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 government entity}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  under section 3219(a).  }{\i\fs20\insrsid5338257 
Cf. Baker v. Runyon}{\fs20\insrsid5338257 , 114 F.3d 668, 669-71 (7th Cir. 1997) (holding that the Postal Service was a }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
government agency}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257  and fell within the exemption for punitive damages under Title VII).    }}}{
\insrsid5338257\charrsid10838210 , the statute did not permit the recovery of punitive damages against GHURA.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [44]}{\insrsid5338257\charrsid10838210 \tab Overall, we find that the claim for back wages and penalty damages under 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3219(a) was not potentially covered, thus, National Union was not contractually obligated to pay the costs of defending GHURA against this claim.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
\par 
\par }\pard \qj \fi2160\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 3)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Breach of Employment Contract.
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [45]}{\insrsid5338257\charrsid10838210 \tab The Employees also claimed that GHURA breached their employment contracts by denying their rights as classified employees.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 With regard to this claim, we recognize that any action between employees and employers }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 will to some extent . . . emanate from the parties}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  contract.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See New Madrid}{\insrsid5338257\charrsid10838210 , 904 F.2d at 1241.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 However, it is evident that because the Employees essentially sought redress for a violation of their constitutional rights, this claim cannot fairly be characterized as one for breach of contract.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Rather, this claim is more properly viewed as a one to vindicate constitutional rights.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 As discussed above,
 because the constitutional claims were potentially covered under the Policy, this claim was similarly potentially covered.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Accordingly, National Union had an obligation to pay defense costs for this claim.
\par }{\b\insrsid10838210 
\par }\pard \qj \fi2160\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 4)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Injunction and Back Pay.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [46]}{\insrsid5338257\charrsid10838210 \tab In the complaints, the Employees presented a claim to be restored to their positions and for back wages.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
This claim is excluded from coverage under the coverage clause, as well as Exclusions (c) and (n) which preclude coverage for non-pecuniary relief, and awards of back salary or employee compensation, respectively.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [47]}{\insrsid5338257\charrsid10838210 \tab The Policy specifically states that it covers sums that the insured becomes legally liable to pay as }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 damages.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The Policy}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s limitation of coverage for damages would render a claim for injunctive relief beyond the scope of coverage.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 For instance, in }{\i\insrsid5338257\charrsid10838210 
Cort v. St. Paul Fire & Marine Ins. Co}{\insrsid5338257\charrsid10838210 , the court found that a claim under Section 17200 of the Cal. Bus & Prof. Code did not trigger a duty to defend.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The court recognized that Section 17200 only entitles a person to }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
injunctive and restitutionary relief, and not damages.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Cort}{
\insrsid5338257\charrsid10838210 ,}{\i\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 311 F.3d at 987.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Thus, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 [b]ecause the policy only cover[ed] payments for damages (and certain associated legal fees), the artists}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 17200 claim did not give rise to a duty to defend.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{
\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Similarly, in the instant case, because the Policy only covered sums for which GHURA bec
ame legally obligated to pay as damages, the Policy did not cover the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 claim for injunctive relief, and thus there was no duty to pay defense costs for such claim.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See also Ladd Constr. Co. v. Ins. Co. of N. Am.}{\insrsid5338257\charrsid10838210 
, 391 N.E.2d 568, 573 (Ill. App. Ct. 1979) (holding that there was no duty to defend a suit for an injunction because the Policy only covered sums the insured shall become legally liable to pay as }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 damages}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 Aetna Cas. & Sur. Co. v. Hanna}{\insrsid5338257\charrsid10838210 , 224 F.2d 499 (5th Cir. 1955) (same).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [48]}{\insrsid5338257\charrsid10838210 \tab Furthermore, non-pecuniary relief is specifically excluded from the Policy under Exclusion (c).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Injunctive relief is non-pecuniary relief.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See}{\insrsid5338257\charrsid10838210  B}{\insrsid5338257\charrsid10838210 LACK}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 S}{\insrsid5338257\charrsid10838210  L}{\insrsid5338257\charrsid10838210 AW}{\insrsid5338257\charrsid10838210  D}{\insrsid5338257\charrsid10838210 ICTIONARY}{
\insrsid5338257\charrsid10838210  1152 (7th ed. 1999) (defining pecuniary as }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[o]f or relating to money; monetary}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, GHURA would have no duty to pay defense costs for such claims.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [49]}{\insrsid5338257\charrsid10838210 \tab 
Additionally, to the extent that back pay is considered damages, the claim would also be excluded from coverage under Exclusion (n), which excludes coverage for awards of wages and employee compensation.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 As stated earlier in the Opinion, claims solely seeking damages in the form of back wages were excluded from coverage under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Because National Union only had a duty to pay the defense costs for covered, non-excluded claims, National Union would have no duty to pay the costs of defending this claim.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi2160\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 5)}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Punitive damages }{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [50]}{\insrsid5338257\charrsid10838210 \tab In the complaints, the Employees also sought punitive damages.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 This final claim should not be characterized as a claim }
{\i\insrsid5338257\charrsid10838210 per se}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
A request for punitive damages is not a separate cause of action and can only be awarded based on a finding of liability for an underlying claim.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Mayes v. UVI Holdings, Inc.}{
\insrsid5338257\charrsid10838210 ,}{\b\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 723 N.Y.S.2d 151, 157 (App. Div. 2001) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 It is settled that there is no independent cause of action for punitive damages}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ) (citation omitted).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 While Exclusion (b) of the Policy excluded coverage for claims alleging malicious acts, and a request f
or punitive damages necessarily would entail proof of conduct which amounts to oppression, malice, or fraud, }{\i\insrsid5338257\charrsid10838210 see}{\insrsid5338257\charrsid10838210  Title 20 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 2120, a court would not be required to award punitive damages; and may limit an award to nominal or compensatory damages.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Clearly if a court awarded non-punitive damages, then National Union may escape indemnification for the award, with reliance on Exclusion (b), if the underlying facts showed that malice or fraud were proven.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 However, the possibility that such a finding could be made does not affect whether there is a duty to pay defense costs.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
So long as the underlying claims for which punitive damages are premised ar
e potentially covered in that they may result in an award of compensatory or nominal damages, and are thus actionable without the allegation of malice, there would be a duty to pay GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s defense expenses.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Lerner v. Gen. Ins. Co. of Am.}{\insrsid5338257\charrsid10838210 
, 245 S.E.2d 249, 252 (Va. 1978) (finding that where underlying claim for punitive damages }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
was ancillary to the claim for compensatory damages,}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 the insurer had a duty to defend the insured against the punitive damages claim even if public policy prohibited indemnity for a punitive damages award); }{\i\insrsid5338257\charrsid10838210 see also Thomas v. Appalachian Ins. Co.}{
\insrsid5338257\charrsid10838210 , 335 So. 2d 789 (La. Ct. App. 1976) (holding that ther
e was a duty to defend notwithstanding that punitive damages are requested because the claim also supported compensatory damages which would not be excluded from the policy).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
This rationale similarly extends to Exclusion (q) which bars coverage for punitive or exemplary damages.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [51]}{\insrsid5338257\charrsid10838210 \tab 
Because the Employees could have recovered non-punitive, compensatory damages for several non-excluded claims in the complaints, National Union was contractually obligated to pay defense costs notwithstanding that punitive damages were also requested.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 2.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Superior Court Case No. SP0051-00.}{\insrsid5338257\charrsid10838210 

\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [52]}{\insrsid5338257\charrsid10838210 \tab As stated earlier, National Union seeks reimbursement for costs in defending three suits.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The first two suits are discussed above.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The third suit, the Petition for Writ of Mandate, (Superior Court Case No. SP0051-00), differed only slightly from the first two actions.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 In the Petition, the Employees presented the following factual allegations: In November of 1994, GHURA, through a Board resolution, classified the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  positions.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 In February of 1995, GHURA declassified their positions through a Board resolution.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 In March of 1995, GHURA, without notice, due process, and without basis, unilaterally terminated the Employees from their positions.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The notice of termination did not specify the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 due process entitlements, nor did it inform the Employees of their right to appeal.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The Employees were never afforded a hearing on their terminations, despite numerous requests.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, p. 82 (Petition for Alternative Writ of Mandate).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [53]\tab }{\insrsid5338257\charrsid10838210 The Employees further alleged in the Petition that GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 s actions were invalid because the failure to afford notice, due process, and a hearing violated GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s Rules and Regulations, Title 4 of the Guam Code Annotated, the Organic Act, and the U.S. Constitution.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 They also alleged tha
t as a result of GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s actions, they sustained damages and continue to suffer irreparable damage.

\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [54]}{\insrsid5338257\charrsid10838210 \tab Finally, the Employees prayed for the following relief: (1) that they be reinstated to their positions with
 back pay and increments; and (2) interest and costs of the action, including attorney}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s fees pursuant to Title 7 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 26603.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [55]}{\insrsid5338257\charrsid10838210 \tab In Petition for Writ of Mandate, the Employees sought injunctive relief and back pay.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
As provided earlier, because the Policy covered }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 damages,}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  an action for injunctive relief would be beyond the scope of coverage.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, the Petition for Writ of Mandate would not fall within the coverage portions of the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Moreover, as stated previously, non-pecuniary relief is specifically excluded under the Policy.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Injunctive relief is non-pecuniary relief.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See}{\insrsid5338257\charrsid10838210  B}{\insrsid5338257\charrsid10838210 LACK}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 S}{\insrsid5338257\charrsid10838210  L}{\insrsid5338257\charrsid10838210 AW}{
\insrsid5338257\charrsid10838210  D}{\insrsid5338257\charrsid10838210 ICTIONARY}{\insrsid5338257\charrsid10838210  1152 (7th ed. 1999) (defining pecuniary as }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 [o]f or relating to money; monetary}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}
{\insrsid10838210  }{\insrsid5338257\charrsid10838210 In light of this exclusion, National Union would have no duty to pay the costs of defending such an action.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [56]}{\insrsid5338257\charrsid10838210 \tab Furthermore, the request for back pay was also excluded from coverage under Exclusion (n), which excluded coverage for awards of wages and employee compensation.}{
\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 3.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Conclusion Regarding the Duty to Pay Defense Costs under the Policy. }{
\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [57]}{\insrsid5338257\charrsid10838210 \tab Overall, we find that National Union was not contractually obligated to pay defense costs for either the mandamus proceeding, or the claims 
for injunctive relief, back pay, and penalty damages under 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3219(a) in the first two lawsuits.
}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The remaining claims in the first two lawsuits were potentially covered because they fell within the coverage clause and did not fall within any exclusion in the Policy.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Accordingly, National Union was contractually obligated to pay defense costs for those covered claims.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [58]}{\insrsid5338257\charrsid10838210 \tab As discussed below, National Union argues that we should look outside the Policy language in determining whether it had an obligation to pay defense c}{\insrsid10838210 
osts in the underlying actions.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 4.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Title 22 GCA }{\b\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\b\insrsid5338257\charrsid10838210  18602 and Title 18 }{\b\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\b\insrsid5338257\charrsid10838210  88102.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [59]}{\insrsid5338257\charrsid10838210 \tab National Union contends that GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s reasonable expectation of defense under the Policy was defeated by Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  18602 and Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  88102.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  18602 provides:
\par }\pard \qj \li0\ri720\nowidctlpar\tx-1440\faauto\rin720\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
An insurer is not liable for a loss caused by the wil[l]ful act of the insured; but he is not exonerated by the negligence of the insured or of the insured}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s agents or others. 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 18602 (1994).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [60]}{\insrsid5338257\charrsid10838210 \tab Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
88102 provides:
\par }\pard \qj \li0\ri720\nowidctlpar\tx-1440\faauto\rin720\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 All contract [sic] 
which have for their object, directly or indirectly, to exempt anyone from responsibility for his or her own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against public policy of the
 law. 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }{\insrsid5338257\charrsid10838210 Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 88102 (1992).
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [61]}{\insrsid5338257\charrsid10838210 \tab In its Decision and Order denying GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s motion for summary judgment, the trial court found that section 18602 was inapplicable in deciding whether National Union had a duty to defend GHURA in the underlying suit.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The court found that section 18602 governed indemnification for willful acts, and not the defense of claims.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The court found that because the issue in this case related
 to defense costs, and not indemnification, the statute was inapplicable to this case. 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [62]}{\insrsid5338257\charrsid10838210 \tab On appeal, National Union contests the lower court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s determination on this issue and argues that Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 18602 and Title 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 88102, which proscribe indemnification for willful acts, are to be read into every contact of insurance thus negating GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s reasonable expectation of defense in the underlying lawsuits.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We disagree.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [63]}{\insrsid5338257\charrsid10838210 \tab Title 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 18602 mirrors California Insurance Code }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 533.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Fajardo v. Liberty House Guam}{\insrsid5338257\charrsid10838210 , 2000 Guam 4, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  15 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Guam}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst 
SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s insurance statutes were adopted from California. . . .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 California}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s Section 533 is the same as 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 18602.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 )
}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Similarly, 18 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 88102 finds a California counterpart in California Civil Code }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 1668.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Gray v. Zurich Ins. Co.}{\insrsid5338257\charrsid10838210 , 419 P.2d 168, n.17 (Cal. 1966).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 California courts have found that both their Insurance Code }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  533 and Civil Code }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 1668 }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
forbid only contracts which }{\i\insrsid5338257\charrsid10838210 indemnify}{\insrsid5338257\charrsid10838210  for }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 loss}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  or }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 responsibility}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  resulting from willful wrongdoing,}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  and not contracts for }{
\i\insrsid5338257\charrsid10838210 defense}{\insrsid5338257\charrsid10838210  of claims for willful acts.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 . at 177 (emphasis added); }{
\i\insrsid5338257\charrsid10838210 Evans v. Pac. Indem. Co.}{\insrsid5338257\charrsid10838210 , 122 Cal. Rptr. 680, 682 (Ct. App. 1975) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210 Section 533 of the Insurance Code reflects the very sound and long standing public policy (also contained in Civ. Code, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 1668) which disapproves of contracts which directly or indirectly exempt anyone from personal responsibility for his own willful injury to another.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [64]}{\insrsid5338257\charrsid10838210 \tab The public policy underlying the analogous California statutes is to prevent the encouragement of willful torts by virtue of the availability of insurance coverage.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Mez Indus. Inc. v. Pac. Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Ins. Co.}{
\insrsid5338257\charrsid10838210 , 90 Cal. Rptr. 2d 721, 737 (Ct. App. 1999) (citation omitted); }{\i\insrsid5338257\charrsid10838210 see Evans}{\insrsid5338257\charrsid10838210 , 122 Cal. Rptr. at 682 (}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Section 1668 of the Civil Code 
and section 533 of the Insurance Code establish a public policy to prevent insurance coverage from encouragement of willful torts.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ) (citation omitted).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 That policy is not furthered by precluding the defense of claims alleging willful torts; }{\i\insrsid5338257\charrsid10838210 to wit}{
\insrsid5338257\charrsid10838210 , }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
a contract to defend an [in]sured upon mere accusation of a willful tort does not encourage such willful conduct.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Gray}{\insrsid5338257\charrsid10838210 , 419 P.2d at 177.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [65]}{\insrsid5338257\charrsid10838210 \tab We find no reason to depart form the reasoning of the California courts.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, applying this interpretation to our local counterparts, an insurer may be precluded from indemnifying an insured for claims for willful acts under sections 88102 and 18602; however, these statutes do not necessarily preclude the insurer from }{
\i\insrsid5338257\charrsid10838210 defending}{\insrsid5338257\charrsid10838210  the insured against such claims.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Accordingly, the trial court was correct in finding that Title 22 GCA }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  18602 }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 precludes only }{\i\insrsid5338257\charrsid10838210 indemnification}{\insrsid5338257\charrsid10838210  of willful conduct and not the }{\i\insrsid5338257\charrsid10838210 defense}{
\insrsid5338257\charrsid10838210  of an action in which such conduct is alleged.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Mez Indus. Inc.}{\insrsid5338257\charrsid10838210 , 90 Cal. Rptr. 2d at 737 (citation omitted).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [66]}{\insrsid5338257\charrsid10838210 \tab Thus, the existence of sections 18602 and 88102 does not answer the question of whether National Union had a duty to pay defense costs for claims alleging willful acts.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id.}{\insrsid5338257\charrsid10838210  (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[W]here a denial of indemnification is based on the application of [those statutes] . . . , it does not necessarily follow that no duty to defend exists.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The test for whether there is a duty to pay defense costs rests on the reasonable expectation of the payment of those costs.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Specifically, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 if the reasonable expectation of an insured are that a def
ense be provided for a claim, then the insurer cannot escape the obligation merely because public policy precludes it from indemnifying that claim.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id.}{\insrsid5338257\charrsid10838210  (citation omitted); }{\i\insrsid5338257\charrsid10838210 see also St. Paul Fire & Ins. Co. v. Weiner}{\insrsid5338257\charrsid10838210 
, 606 F.2d 864, 868, 870 (9th Cir. 1979) (rejecting the lower court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s reliance on section 533 of the Insurance Code and section 1668 of the Civil Code in finding that the insurer had no duty to defend agains
t fraud claims, and holding that the insurer had a duty to defend because the insured had a reasonable expectation of defense for those claims in light of an ambiguity contained in the policy language).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [67]}{\insrsid5338257\charrsid10838210 \tab Even assuming indemnification for the Employees}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  claims would be precluded by virtue of sections 18602 and 88102, we find that National Union would nonetheless have had a duty to pay defense costs for those claims.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Downey Venture v. LMI Ins. Co.}{\insrsid5338257\charrsid10838210 , 78 Cal. Rptr. 2d 142, 161 (Ct. App. 1998).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The Policy provided that defense costs would be paid for wrongful acts covered under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, GHURA had a reasonable expectation that National Union would pay defense costs for the claims which we have determined were potentially covered under the Policy. 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [68]}{\insrsid5338257\charrsid10838210 \tab The next question is whether National Union is entitled to a reimbursement of defense costs for non-covered claims.
\par }{\b\insrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 5.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Reimbursement.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [69]}{\insrsid5338257\charrsid10838210 \tab On appeal, National Union argues that an insurer is entitled to reimbursement if there was no potential for coverage and it defends pursuant to a reservation of rights.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 GHURA, on the other hand, argues that an insurer should not be able to seek reimbursement if it defends an insured as a volunteer under a unilateral reservation of rights.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The parties have articulated two lines of authority governing the right to reimbursement.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We agree with National Union.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Buss}{\insrsid5338257\charrsid10838210 , 939 P.2d at 776-77. 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [70]}{\insrsid5338257\charrsid10838210 \tab Under an insurance contract, the insured only bargains for the
 payment of defense costs for claims which, viewing the facts of the complaint, are potentially covered under the policy.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Because the insured does not bargain for a defense for claims which are not potentially covered, there is no duty under the poli
cy to pay those defense costs, and the insured cannot expect the payment of a defense in such circumstance.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Logically, then, the insured must reimburse the insurer for costs expended defending claims which are not potentially covered.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}
{\insrsid10838210  }{\insrsid5338257\charrsid10838210 To hold otherwise would provide a windfall to the insured.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [71]}{\insrsid5338257\charrsid10838210 \tab This principle was recently applied by the Sixth Circuit in }{\i\insrsid5338257\charrsid10838210 United National Insurance Co. v. SST Fitness Corp.}{
\insrsid5338257\charrsid10838210 , 309 F.3d 914 (6th Cir. 2002).}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See also Matagorda County v. Tex. Assoc. of Counties County Gov}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 t Risk Mgmt. Pool}{\insrsid5338257\charrsid10838210 
, 975 S.W.2d 782, 785 (Tex. Ct. App. 1998) (agreeing with other courts that an insurer has a right to reimbursement under quasi-contract, unjust enrichment, and quantum meruit theories
 if the insurer gives the insured specific notice that he may later be charged for these costs).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 In }{\i\insrsid5338257\charrsid10838210 United National}{\insrsid5338257\charrsid10838210 
, the majority recognized that }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 courts . . . consistently have held that an insurer is enti
tled to reimbursement for defense costs when the insurer did not have the duty to defend any of the asserted claims . . .}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  and the insurer makes a valid reservation of its right to recoup defense costs.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 United Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Ins. Co.}{\insrsid5338257\charrsid10838210 , 309 F.3d at 919.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The principle underlying its holding was this: }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Having accepted [the insurer}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s] offer of a 
defense with a reservation of the right to seek reimbursement, [the insured] ought in fairness make the [insurer] whole, [where] . . . it has been judicially determined that no duty to defend ever existed.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 . at 917 (citation omitted).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [72]}{\insrsid5338257\charrsid10838210 \tab We agree with the rationale articulated by the court in }{\i\insrsid5338257\charrsid10838210 United National}{\insrsid5338257\charrsid10838210 
, and find that the use of a unilateral reservation of rights letter is appropriate to apprise the insured of the fact that it cannot accept the windfall of defense costs for which it was not entitled to under the Policy.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Buss}{\insrsid5338257\charrsid10838210 , 939 P.2d at 784, n. 27 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
Here, Transamerica reserved all its rights, contractual and otherwise.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We also note that the Court of Appeal
 was evidently of the view that the insurer can reserve its right of reimbursement for defense costs by itself, without the insured}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s agreement.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Such a view is in accord with the }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 62 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 modern trend.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210 ).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 6.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Reservation of Rights Letter.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [73]}{\insrsid5338257\charrsid10838210 \tab 
If an insurer has no duty to defend or obligation to pay defense costs, it is entitled to a reimbursement of defense costs only if the insurer sufficiently reserves its right to seek reimbursement.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 
See United Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l}{\insrsid5338257\charrsid10838210 , 309 F.3d at 919; }{
\i\insrsid5338257\charrsid10838210 Buss}{\insrsid5338257\charrsid10838210 , 939 P.2d at 784, n. 27}{\cs15\super\insrsid5338257\charrsid10838210 \chftn {\footnote \pard\plain \qj \fi720\li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\cs15\super\insrsid5338257 \chftn }{\insrsid5338257  }{\fs20\insrsid5338257 In }{\i\fs20\insrsid5338257 Buss}{\fs20\insrsid5338257 , the court provided: 
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 
\par }\pard \qj \li1440\ri1440\nowidctlpar\faauto\rin1440\lin1440\itap0 {\fs20\insrsid5338257 
We note that the Court of Appeal assumed that, in order to obtain reimbursement for defense costs, the insurer must reserve its right thereto. To the extent that this right is implied in law as quasi- contractual, it }{\i\fs20\insrsid5338257 must}{
\fs20\insrsid5338257  indeed be reserved. (Cf. 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 92, p. 123 [stating that, }{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 [i]n an action in quasi-contract ..., a }{\i\fs20\insrsid5338257 demand}{\fs20\insrsid5338257 
 is ordinarily a necessary prerequisite}{\fs20\insrsid5338257 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 10}{\fldrslt\f36\fs20}}}{\fs20\insrsid5338257 
 (italics in original)].) Through reservation, the insurer gives the insured notice of how it will, or at least may, proceed and thereby provides it an opportunity to take any steps that it may deem reasonable or necessary in response--including whether t
o accept defense at the insurer's hands and under the insurer's control . . . or, instead, to defend itself as it chooses. To the extent that this right is implied in fact in the policy as contractual, it }{\i\fs20\insrsid5338257 should}{
\fs20\insrsid5338257  be reserved. Through reservation, the insurer avoids waiver.  
\par }\pard \qj \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0 {\fs20\insrsid5338257 
\par }\pard \qj \li0\ri0\sa240\nowidctlpar\faauto\rin0\lin0\itap0 {\i\fs20\insrsid5338257 Buss}{\fs20\insrsid5338257 , 939 P.2d at 784, n. 27 (alterations in original).}}}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The reservation of its right to recoup defense costs must be (1) made in a timely and explicit manner, and (2) must provide }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 specific and adequate notice of the possibility of reimbursement.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See United Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l}{
\insrsid5338257\charrsid10838210 , 309 F.3d at 920.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [74]}{\insrsid5338257\charrsid10838210 \tab GHURA challenges the validity of National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s January 8, 1998 reservation of rights letter (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Letter}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
GHURA argues that because the Letter references the District Court action only, the Letter can only support a reimbursement of costs expended in the District Court action and not the costs incurred defending the later two Superior Court suits.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 We disagree.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [75]}{\insrsid5338257\charrsid10838210 \tab There is no doubt here that National Union met the above two criteria with regard to the District Court suit.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
First, in its Letter, National Union timely and explicitly reserved its right to recoup defense costs because it sent its Letter merely 31 days after GHURA tendered its defense to National Union.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 
See id.}{\insrsid5338257\charrsid10838210  (determining that the reservation was timely and explicit because the reservation of rights letter was submitted prior to the payment of defense costs).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Furthermore, the Letter provided adequate and specific notice of the possibility of reimbursement because the Letter concluded with the following pronouncement: }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 By this letter National Union reserves its right to seek reimbursement of defense costs incurred defending claims for which there is no potential for coverage.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Excerpts of Record, vol. I, p. 205 (Reservation of Rights Letter); }{
\i\insrsid5338257\charrsid10838210 see United Nat}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l}{\insrsid5338257\charrsid10838210 
, 309 F.3d at 920-21 (noting that the reservation of rights letter contained a statement that the insurer }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 reserves the right to recoup . . . any . . . defense costs}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 and finding that the insurer specifically and adequately gave notice of the possibility of reimbursement).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Thus, the remaining question is whether the reservation was adequate to cover both the later-filed Superior Court civil action and the mandamus proceeding.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 We find that it was.
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [76]}{\insrsid5338257\charrsid10838210 \tab A reservation of rights letter is used for two recognized purposes.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
First, and primarily, a reservation of rights letter is generally used to protect the insurer from foreclosing its right to contest indemnification of damage awards.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 If an insurer
 defends the insured without reserving its rights to contest indemnification, then the insurer will be found to have waived}{\i\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 
its defenses under the policy, and will thus be bound to pay any sums for which the insured eventually is held to be liable.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Am. States Ins. Co. v. Nat}{\i\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l Cycle, Inc.}{\insrsid5338257\charrsid10838210 , 631 N.E.2d 1292, 1297 (Ill. Ct. App. 1994).}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Thus, a reservation of rights letter has been referred to as a }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
nonwaiver agreement.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }
{\insrsid5338257\charrsid10838210 The second purpose of a reservation of rights letter is to prevent the insurer from having been found to have waived its right to reimbursement of defense costs.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
In cases where the insured contests its duty to pay defense costs, an insurer cannot be reimbursed unless it reserved its right to seek reimbursement.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See United Nat}{
\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 l}{\insrsid5338257\charrsid10838210 , 309 F.3d at 919; }{\i\insrsid5338257\charrsid10838210 Buss}{
\insrsid5338257\charrsid10838210 , 939 P.2d at 784, n. 27.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Thus, a reservation of rights letter i
s also used to protect the insurer from waiving its rights to later contest payment of defense costs or to seek reimbursement of such costs.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See St. Paul Mercury Ins. Co. v. Ralee Eng}{
\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 g Co.}{\insrsid5338257\charrsid10838210 , 804 F.2d 520, 522 (9
th Cir. 1986) (determining that the insurer could not seek reimbursement when its reservation of rights letter did not reflect the understanding that the insured would reimburse the insurer for costs already expended if the insurer decided not to defend a
t a later date).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [77]}{\insrsid5338257\charrsid10838210 \tab Waiver is found when the insurance company proceeds with knowledge of facts bearing on its policy defense and does not insist on non-coverage.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 Am. States Ins. Co.}{\insrsid5338257\charrsid10838210 , 631 N.E. 2d at 1297.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Waiver is premised on the theory that if the insurance company proceeds in such manner, it is deemed to have recognized the }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 continued validity of the policy}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
 under the facts, and thus to have intended to waive the policy defense.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .; }{\i\insrsid5338257\charrsid10838210 see also Snedker v. Derby Oil Co.}{
\insrsid5338257\charrsid10838210 , 192 P.2d 135, 138 (Kan. 1948) (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
An insurance company is ordinarily precluded from asserting nonliability under its policy where with notice or knowledge of the facts and without disclaimer it undertakes or continues defense of an action against the insured.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ) (citation omitted).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [78]}{\insrsid5338257\charrsid10838210 \tab We find that National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s Letter was broad enough to extend to all suits involving the claims raised in the District Court action.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
In the Letter, National Union recounted all claims which were made in the District Court suit and very clearly expressed why each claim was not potentially covered under the Policy.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
At the conclusion of the Letter, National Union asserted that it reserved its rights to recoup defense costs for all }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 claims}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  which were not covered.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The claims which were deemed }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 non-covered}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  in the District Court suit were the exact same claims in the later two suits.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 It would be disingenuous for GHURA to claim that it was not notified of National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s position regarding non-coverage and reimbursement when accepting the defense provided for them in the later two suits after having received the Letter which detailed the Employees}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  factual allegations and claims }{\i\insrsid5338257\charrsid10838210 and}{\insrsid5338257\charrsid10838210  National Union}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s reasons for denying coverage and seeking reimbursement; }{\i\insrsid5338257\charrsid10838210 
especially when those same factual allegations and claims of wrongdoing formed the grounds for all three suits}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Moreover, there is nothing in the record which shows that National Union acted in such a way which would indicate that it abandoned its original opinion that the claims were not covered and that National Union intended to seek recovery of defense costs.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Thus, the Letter was sufficient to notify GHURA of National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s position that it did not intend to waive its right to a reimbursement of de}{\insrsid10838210 fense costs in all three suits.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 7.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Allocation}{\insrsid5338257\charrsid10838210 .
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [79]}{\insrsid5338257\charrsid10838210 \tab As stated above, several claims in the first two complaints were excluded and several claims were potentially covered under the Policy.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 
Therefore, because the complaints alleged both non-covered and potentially covered claims, and because National Union exercised its right to defend GHURA in the underlying actions, National Union was required to pay defense costs for the entire suits.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Gon}{\insrsid5338257\charrsid10838210 , 871 F.2d at 869}{\i\insrsid5338257\charrsid10838210  }{\insrsid5338257\charrsid10838210 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 We affirm the district court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 s order that [the insurer] . . . must pay all legal expenses as incurred, subject to apportionment and reimbursement for defense of uncovered claims or persons after settlement or judgment in the underlying . . . action.}{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
However, if an insurer paid defense costs for a suit containing both covered and non-co
vered claims, it is nonetheless entitled to a reimbursement for costs expended in defending non-covered claims if it reserved its rights and is able to identify those costs which were attributable }{\i\insrsid5338257\charrsid10838210 solely}{
\insrsid5338257\charrsid10838210  to non-covered claims.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Downey Venture}{\insrsid5338257\charrsid10838210 , 78 Cal. Rptr. 2d at 159.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The insurer has the burden to prove allocation between covered and non-covered claims.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See id.}{\insrsid5338257\charrsid10838210 
 (stating that reimbursement is allowed if the insurer can produce undeniable evidence supporting allocation between the claims).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [80]}{\insrsid5338257\charrsid10838210 \tab Thus, if it could prove allocation, National Union would be entitled to a reimbursement of defense costs for claims which it had no obligation to pay defense costs.}{
\insrsid10838210  }{\insrsid5338257\charrsid10838210 Allocation is a factual question and is more appropriately determined by the trial court in the first instance.}{\insrsid5338257 
\par }{\b\insrsid10838210\charrsid10838210 
\par }\pard \qj \fi720\li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 8.}{\b\insrsid10838210  }{\b\insrsid5338257\charrsid10838210 Government Claim.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [81]}{\insrsid5338257\charrsid10838210 \tab 
Finally, GHURA argues that because the costs incurred in the District Court suit were incurred 18 months prior to the filing of the government claim, then pursuant to the Government Claims Act (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL
 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 Claims Act}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ), National Union is time-barred from collecting on amounts it expended in that suit.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Essentially, GHURA argues that National Union is precluded under the Claims Act fr
om recovering the costs incurred in defending the District Court action. 
\par }{\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [82]}{\insrsid5338257\charrsid10838210 \tab The Claims Act}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s applies to GHURA.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Perez v. GHURA}{\insrsid5338257\charrsid10838210 , 2000 Guam 33, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt
\f36\fs24}}}{\insrsid5338257\charrsid10838210  11 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
[T]he Claims Act is applicable to GHURA and the waiver of sovereign immunity is within the limits prescribed by the act.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ); }{\i\insrsid5338257\charrsid10838210 see also}{\insrsid5338257\charrsid10838210  Title 5 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 6102 (}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
No government agency, whether denominated as a line department, an agency, or a public corporation, is excluded from the scope of this Chapter.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The fact that an agency or instrumentality has or has 
not the right to sue or to be sued in its own name does not exclude such agency or instrumentality from the scope of this Chapter.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 ).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Thus, all claims against GHURA are subject to the limitations periods in the Claims Act.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Perez}{
\insrsid5338257\charrsid10838210 , 2000 Guam at }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  11.}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [83]}{\insrsid5338257\charrsid10838210 \tab Section 6106 of the Claims Act provides:
\par }{\insrsid10838210 
\par }\pard \qj \li720\ri0\nowidctlpar\tx-1440\faauto\rin0\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 Limitations on Actions and Filing.
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par }\pard \qj \fi720\li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (a) All claims under this Act must be filed within 18 months from the date
 the claim arose, but any claims timely filed under the predecessor of this Act shall be considered to have been timely filed under this Chapter.
\par }\pard \qj \li0\ri720\nowidctlpar\tx-1440\faauto\rin720\lin0\itap0\pararsid10838210 {\insrsid10838210 
\par }\pard \qj \fi720\li720\ri720\nowidctlpar\tx-1440\faauto\rin720\lin720\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 (b) Every action filed under this Chapter shall be barred unless commenced within 18 months from the time the 
notice that the claim was rejected was served as provided in Article 2 of this Chapter, or within 24 months after the claim was filed in cases where the government does not reject the claim.
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\insrsid5338257\charrsid10838210 
\par Title 5 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  6106 (}{\insrsid10838210 2001).}{\insrsid5338257 
\par }{\insrsid10838210\charrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [84]}{\insrsid5338257\charrsid10838210 \tab 
As referenced above, there are two relevant dates under the Claims Act in determining whether a claimant is precluded from recovering money against the government: (1) the date the claim arose; and (2) the date the government claim was denied.}{
\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 See Pac. Rock Corp. v. Dep}{\i\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\i\insrsid5338257\charrsid10838210 t of Educ.\'b8}{
\insrsid5338257\charrsid10838210  2001 Guam 21, }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  51.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 To recover against the government in a court action, the claimant must first show that he filed his }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210 government claim}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  within 18 months }{
\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 from the date the claim arose.}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 64 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 . (citing Title 5 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  6106).}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Furthermore, the claimant must show that he or she filed the court action within 18 months of the time the government claim was rejected.}{\insrsid10838210  }{\i\insrsid5338257\charrsid10838210 Id}{\insrsid5338257\charrsid10838210 .}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 The issue raised by GHURA relates to the first requirement.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
GHURA argues that National Union failed to file its claim for defense costs incurred in the District Court action within 18 months of the date the claim arose.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
The issue, therefore, relates to the date National Union}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s claim for defense costs in the District Court action }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 65 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 arose.}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 64 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The point in which a claim against the government arose is a question of fact.}{\insrsid10838210  }{
\i\insrsid5338257\charrsid10838210 See Pac. Rock Corp.}{\insrsid5338257\charrsid10838210 , 2001 Guam 21, at }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 38 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{
\insrsid5338257\charrsid10838210  43.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Thus, like the issue of allocation, we find that the lower court is more appropriately equipped to make that determination in the first instance. 
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid5338257\charrsid10838210 IV.}{\insrsid5338257\charrsid10838210 
\par }\pard \qj \li0\ri0\nowidctlpar\tx-1440\faauto\rin0\lin0\itap0\pararsid10838210 {\b\insrsid10838210 
\par }{\b\insrsid5338257\charrsid10838210 [85]}{\insrsid5338257\charrsid10838210 \tab In accordance with the foregoing, we find that National Union was not required to pay GHURA}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f 
"WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s defense costs for the claims for back pay, penalty damages under 22 GCA }{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 39 \\f "WP TypographicSymbols"
 \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210  3219(a), and injunctive relief in the civil actions, nor was National Union responsible for paying defense costs for the mandamus proceeding.}{\insrsid10838210  }{
\insrsid5338257\charrsid10838210 Thus, because National Union reserved its right to seek a reimbursement of defense costs, it is entitled 
to recover those costs in this action if it can provide evidence of the costs expended solely in defending the mandamus proceeding or the non-covered claims in the civil suits.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Accordingly, we hereby }
{\b\insrsid5338257\charrsid10838210 REVERSE }{\insrsid5338257\charrsid10838210 the lower court}{\insrsid5338257\charrsid10838210 {\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 
s decision granting summary judgment in favor of GHURA to the extent the judgment denies recovery for defense costs expended on non-covered claims.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The case is }{\b\insrsid5338257\charrsid10838210 
REMANDED}{\insrsid5338257\charrsid10838210  for a determination on the issue of allocation.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 Finally, we observe that
 National Union would be precluded from recovering against GHURA if its claim for reimbursement was not filed within the limitations period set forth in the Government Claims Act.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 
Accordingly, on remand, the lower court is directed to determine whether National Union filed its government claim in a timely manner.}{\insrsid10838210  }{\insrsid5338257\charrsid10838210 The lower court}{\insrsid5338257\charrsid10838210 
{\field{\*\fldinst SYMBOL 61 \\f "WP TypographicSymbols" \\s 12}{\fldrslt\f36\fs24}}}{\insrsid5338257\charrsid10838210 s judgment is }{\b\insrsid5338257\charrsid10838210 AFFIRMED}{\insrsid5338257\charrsid10838210  in all other respects.}{\insrsid10838210 

\par }}