GALLINGER v. NORTH STAR HOSP. MUT. ASSUR., LTD.

No. 94-2617.

64 F.3d 422 (1995)

Susan GALLINGER, Arizona Director of Insurance, as Receiver of Great Global Assurance Company, Appellant, v. NORTH STAR HOSPITAL MUTUAL ASSURANCE, LTD., A Bermuda Company, Defendant, and Allen Memorial Hospital; Finley Hospital; Hancock County Memorial Hospital; Jackson County Public Hospital; Jefferson County Hospital; Sartori Memorial Hospital; Spencer Municipal Hospital; Covenant Medical Center, Inc., Successor to St. Francis Hospital; Abbott Northwestern Hospital, Inc., Successor to Eitel Hospital; Albany Area Hospital, Formerly Known as Albany Community Hospital; Samaritan Bethany, Inc., Formerly Known as Bethany Samaritan, Inc.; Douglas County Hospital; Elders' Home, Inc.; Elim Homes, Inc.; Fairfax Community Home, Inc.; Fairmont Community Hospital Association, Inc.; Foundation of Guardian Angels; Gillette Children's Hospital; Glenwood Retirement Home; Grandview Christian Home; Green Pine Acres Nursing Home; HealthEast, Formerly Known as Health Resource Center, Inc.; Immanuel-St. Joseph's Hospital of Mankato; All Health Corporation, Formerly Known as King Care Centers, Inc.; Lakeview Memorial Hospital Association, Inc.; Lyngblomsten Care Center, Inc.; Lac Qui Parle Health Care Services, Formerly Known as Madison Hospital Association; Mercy Hospital and Health Care Center, Formerly Known as Mercy Hospital and Nursing Home; Methodist Hospital; Metropolitan-Mount Sinai Medical Center, Owned by HealthOne Corporation, Successor to Metropolitan Medical Center, Also Known as Centercare, and to Mount Sinai Hospital; Minneapolis Children's Medical Center; Monticello-Big Lake Community Hospital; North Country Hospital, Formerly Known as Bemidji Community Hospital; Riverview Healthcare Association, Formerly Known as Riverview Hospital; Seminary Memorial Home; Shady Lane Nursing Home; St. John's Regional Health Center, Formerly Known as St. John's Hospital; St. Luke's Hospital of Duluth; St. Therese Home Auxiliary; United District Hospital and Home; United Hospital Incorporated; Villa of St. Francis Nursing Home; Ridgeview Medical Center, Formerly Known as Waconia Ridgeview Hospital; Watonwan Memorial Hospital; Weiner Memorial Medical Center, Inc.; Wood Dale Home, Inc.; Bozeman Deaconess Hospital; C-M Medical Facilities, Inc., Owner of Central Montana Medical Center, Formerly Known as Central Montana Hospital and Nursing Home; Garfield County Health Center, Inc., Formerly Known as Garfield County Hospital and Home Association; Glendive Medical Center, Formerly Known as Glendive Community Hospital; and Holy Rosary Hospital, Appellees, and Liberty County Hospital, Defendant, and Northern Montana Hospital; Montana Children's Home and Hospital, Owner of Shodair Children's Hospital; St. John's Lutheran Hospital, Libby, Montana; St. Patrick's Hospital; St. Peter's Community Hospital; Brookings Hospital/Brookview Manor; Dell Rapids Community Hospital; Five Counties Hospital and Nursing Home; Hand County Memorial Hospital; Mobridge Regional Hospital; Pioneer Memorial Hospital; Platte Community Memorial Hospital, Inc.; Rushmore Health System, Inc., Successor to Rapid City Regional Hospital; Sioux Valley Hospital Association; St. Benedict Hospital; and St. Michael's Hospital, Inc., Appellees.

United States Court of Appeals, Eighth Circuit.

Decided August 29, 1995.


Attorney(s) appearing for the Case

Joseph Anthony, Minneapolis, MN, argued (Mary L. Knoblauch and Douglas L. Elsass, on the brief), for appellant.

Eric Magnuson, Minneapolis, MN, argued (Richard J. Nygaard, Thomas J. White and Thomas J. Hoben, on the brief), for appellees.

Before BOWMAN, Circuit Judge, HEANEY, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.


MORRIS SHEPPARD ARNOLD, Circuit Judge.

In 1978, a group of 13 hospitals formed North Star Hospital Mutual Assurance, Ltd. (NSHMA), an entity through which they intended to insure themselves for malpractice and other types of general liability. Membership in the company, which was incorporated in Bermuda, later grew to almost 250 hospitals and nursing homes.

Although the NSHMA members did not hold shares of stock in the company, the members were subject to...

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