Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Plaintiff filed suit against Metropolitan after the insurance company denied coverage for the loss of her home. After a wildfire swept through Northern Arizona in 2011, flooding and mudslides in the area destroyed plaintiff's house. Plaintiff had a homeowner’s policy with Metropolitan which covered direct loss caused by fire but excluded coverage for loss caused by either water damage or earth movement, including mudslides. Under the Appleman definition of direct and proximate cause as adopted by Arizona, it is possible that the fire directly caused plaintiff's loss in “an unbroken sequence and connection between” the wildfire and the destruction of the house. In this case, a reasonable factfinder could conclude that the destruction of the house was caused by the fire, which likely caused the mudslide, “the operation and influence of which could not be avoided.” Therefore, although an efficient proximate cause analysis is not appropriate under Arizona law, the court need not apply that doctrine in order to find that the damage here could have been directly and proximately caused by the wildfire. The court concluded that the district court erred in determining that, under Arizona law, Metropolitan was entitled to summary judgment because there is a triable issue as to whether the fire directly caused the destruction of plaintiff's home. Accordingly, the court reversed and remanded. View "Stankova v. Metro. Prop. & Cas. Ins. Co." on Justia Law

Plaintiff filed a putative class action against EquiTrust, alleging that EquiTrust's marketing of the sale of annuities violated the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. 1962(c), and Arizona law. The district court granted EquiTrust's motion for summary judgment but declined to award costs. In this case, plaintiff's complaint is based entirely on the language of the annuity contract and the EquiTrust marketing materials. The district court found, and the court agreed, that there were no actionable predicate acts regarding the premium bonus, the market value adjustment, nor the nonforfeiture law. The court concluded, however, that the district court must explain a denial of an award of costs to the prevailing party. Because the district court failed to do so here, the court vacated the order denying costs and remanded for further proceedings. The court affirmed the grant of summary judgment. View "Harrington v. EquiTrust Life Ins." on Justia Law

Encompass filed suit against Mid-Century and Coast National seeking contribution or subrogation for the expenses Encompass incurred in its defense and indemnification of its insured, Lisa Torti, in an underlying lawsuit. Alexandra Van Horn was a passenger in a wrecked car and, Torti, fearing that Van Horn might be in danger, grabbed Van Horn and physically removed her from the car. Van Horn suffered severe spinal injuries after the accident and became a paraplegic. Van Horn sued Torti, alleging that Torti caused her injuries when she removed her from the wrecked car. At issue on appeal was whether unloading an injured passenger from a motor vehicle constitutes "use" of that motor vehicle under California law. The court concluded that it does. As used in Mid-Century's and Coast National's insurance policies, the term "use" is defined by California Insurance Code 11580.06(g). As defined by California Insurance Code 11580.06(g), "use" of an automobile includes unloading that automobile. In this case, Torti "used" the vehicle when she unloaded Van Horn from that car. Accordingly, the court reversed the judgment of the district court in favor of Mid-Century and Coast National and remanded for further proceedings. View "Encompass Ins. Co. v. Coast Nat'l Ins. Co." on Justia Law

After the Diocese settled four lawsuits for alleged sexual abuse by its priests, the Diocese filed a declaratory judgment action seeking entitlement to indemnification under IFC's excess liability indemnity policies. The policy provided by IFC to the Diocese excludes "liability of any Assured for assault and battery committed by or at the direction of such Assured..." The court concluded that, based on the ordinary meaning of this exclusion and consistent with Arizona law, "the language 'any insured'... express[es] a contractual intent to prohibit recovery by innocent co-insureds." In this case, the assault and battery exclusions applied to innocent co-insureds. Accordingly, the court reversed the district court's judgment in favor of the Diocese, and vacated and remanded its grant of attorneys' fees and taxable costs. View "IFC v. Roman Catholic Church" on Justia Law

This case arose from general liability insurance policies, including advertising injury coverage, that Great American issued to Street Surfing. At issue was whether those policies obligated Great American to defend Street Surfing in an action alleging trademark infringement, unfair competition, and unfair business practices under federal and California law (Noll action). The court accepted Great American's concession that the Noll action potentially falls within coverage for use of another's advertising idea, but rejected Street Surfing's argument that the action would also fall within the policies' coverage for slogan infringement. The court held that the prior publication exclusion relieves Great American of its duty to defend Street Surfing in the Noll action because the extrinsic evidence available to Great American at the time of tender conclusively establishes: (1) that Street Surfing published at least one advertisement using Noll's advertising idea before coverage began; and (2) that the new advertisements Street Surfing published during the coverage period were substantially similar to that pre-coverage advertisement. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Great American. View "Street Surfing v. Great Am. E&S Ins. Co." on Justia Law

Pyramid Tech filed suit against its insurer, alleging express breach of contract and breach of the implied covenant of good faith. Without holding a Daubert hearing, the district court excluded Pyramid Tech's expert witnesses and granted summary judgment to the insurer, finding insufficient evidence that a flood caused damage to Pyramid Tech's property. The court held that, after an expert establishes admissibility to the judge's satisfaction, challenges that go to the weight of the evidence are within the province of a fact finder, not a trial court judge. A district court should not make credibility determinations that are reserved for the jury. In this instance, the district court abused its discretion in excluding the expert evidence of David Spiegel and Ken Pytlewski, but did not abuse its discretion in excluding the expert evidence of Del Mortenson. The district court erred in granting summary judgment against Pyramid Tech's claims where genuine issues of material fact existed as to whether the insurer breached its contract with Pyramid Tech and breached the implied covenant of good faith. However, to the extent such claims were premised on Pyramid Tech's business interruption theory, no material issues of fact existed and the district court did not err in granting summary judgment against that theory of liability. Accordingly, the court affirmed in part, reversed in part, and remanded for retrial. View "Pyramid Tech. v. Allied Public Adjusters" on Justia Law

Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132(a)(1)(B), 1132(a)(3), against PacifiCare when Pacificare denied her health care coverage. The court concluded that PacifiCare's benefit exclusion of myoelectric devices was not contrary to the plain language of California Health & Safety Code 1367.18. Accordingly, the court affirmed the district court's grant of summary judgment to PacifiCare. The court denied as moot plaintiff's motion to certify a question to the California Supreme Court. View "Garcia v. PacifiCare of California" on Justia Law

Retired Employees and their spouses filed suit against the County, alleging that the Retired Employees have an implied vested right to the pooling of their health care premiums with those of current employees ("pooled premiums"). The court affirmed the district court's order granting the County's motion for summary judgment, concluding that Retired Employees failed to raise a genuine issue of material fact where they did not show any link to Retired Employees' claim of an implied right to an ongoing pool premium; a practice or policy extended over a period of time did not translate into an implied contract without clear legislative intent to create that right - and intent that Retired Employees has not demonstrated in this case; Retired Employees' assertions that its involvement in negotiations with the County revealed an implied contract right to the pooled premium also lacked evidentiary support; and the nature of Retired Employees' evidence underscored the absence of any definitive intent or commitment on the part of the County to provide for the pooled premium. Accordingly, the court affirmed the district court's grant of the County's motion for summary judgment. View "REAOC v. County of Orange" on Justia Law

Carolina filed suit asserting federal jurisdiction based on diversity against defendants for a declaratory judgment that Carolina was not liable under Dry Cleaning's insurance policy. The district court dismissed without leave to amend and, when Carolina filed a proposed amended complaint, the district court did not accept this complaint as sufficient because Carolina still pled its jurisdictional allegations on information and belief and still failed to establish the citizenship of some defendants. The court concluded that because the district court did not conclude that any amendment would be futile, the district court should not have dismissed the initial complaint with leave for Carolina to amend it to correct, as far as possible, the defective jurisdictional allegations; the district court should not have dismissed the complaint for failure to plead allegations of citizenship affirmatively and on knowledge, rather than on information and belief, when the necessary information was not reasonably available to Carolina; and, therefore, the court reversed and remanded. View "Carolina Cas. Ins. Co. v. Team Equip., Inc." on Justia Law

This case arose when the EPA sent two letters to Anderson notifying Anderson of its potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601 et seq., for environmental contamination of the Portland Harbor Superfund Site. Anderson's general liability insurer, St. Paul, declined to provide Anderson with a legal defense. St. Paul argued that the letters sent to Anderson were not "suits" because they were not filed in a court of law. The court held that the letters were "suits" within the meaning of the policies; the letters alleged facts sufficient to alert Anderson to its potential liability for environmental contamination under CERCLA; and, therefore, St. Paul breached its duty to defend Anderson. Accordingly, the court affirmed the judgment of the district court in favor of Anderson and also affirmed the attorney's fee award in Anderson's favor in light of the court's holding on the merits. View "Anderson Bros. v. St. Paul Fire & Marine Ins. Co." on Justia Law