N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
FIR ST ONE LENDING COR POR ATION; JOHN VESC ER

A, Plaintiffs-Appe lla nts,
v. THE HAR TFORD C ASUALTY INSUR ANC E C OM PANY, De fe nda

nt-Appe lle e . No. 14-56492 D.C . No. 8:13-c v-01500-AG (DFM ) M EM OR ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia A ndre w J. Guilford, Districr Judge Pre siding Argue d a nd Subm i tte d Oc tobe r 4, 2016 Pa sa de n a , C a l ifornia B e fore : D.W . NELSON a nd PAEZ, C irc uit Judge s, a nd B UC KLO, ** Distric t Judge
. 

# FIL ED OCT 20 2016 M OLLY C. DW Y ER, CLERK U
. S
. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3. ** The Honora

ble Ela ine E. B uc k lo, Unite d Stat e s Distric t Judge for the Northe rn Distric t of Illinois, sitting by de signa tion.First One Le nding C orporation a nd John Ve sc e ra

(toge the r, “ First One ” )
a ppe a l from

the distric t c ourt’ s gra

nt of sum m ary judgm e nt in fa

v or of The Hartford C a sua lty

Insura nc e C om pa ny (“ Hartford” ). The distric t c ourt he ld tha t Hartford ha d no duty

to de fe nd First One in a

la wsuit brought a

ga i nst it by

the Ne ighborhood Assista

nc e C orporation of Am e ric a (“NAC A” ) be c a

use the
c om pla i nt sought only

re stitution of ill-gotte

n ga ins, whic h a

re not insura

ble a s a
m a tte r of public polic y

unde r C a lifornia

la w. Se e , e .g. , Bank of the

W . v . Supe rior C ourt , 833 P.2d 545, 553-54 (C a l. 1992) (in ba nk). W e have jurisdic t ion unde r 28 U.S.C . § 1291. W e re vie w the distric t c ourt’ s orde r de nov o, se e , e .g. , Trishan Air, Inc
. v . Fe d. Ins. C

o. , 635 F.3d 422, 426 (9th C ir. 2011), a n d we re v e rse .

“ The C a lifornia

Supre m e C ourt ha s sta

te d tha t the insure d is e ntitle d to a de fe nse if the unde rly ing c om pla int a lle ge s the insure d’ s lia bility for dam a ge s pote ntially

c ove re d unde r the polic y , or if the c om pla int m i ght be am e nde d to give rise to a l ia

bility that would bec ove re d unde r the polic y .” Anthe m Ele cs., Inc . v . Pac . Emp’rs Ins. C

o. , 302 F.3d 1049, 1054 (9th C i r. 2002) (inte rna l quota tion
m arks om itte d). The un de rly ing a c tion a ga inst First One pote ntia l ly

sought dam a ge s within the

c o ve ra ge of Ha

rtford’ s insura

nc e polic y . NAC A’ s La

nha m Ac t
and c om m on la w unfa ir c om

pe tition c la im s both a

uthoriz e c om

p e nsatory re lie f for the k ind of re puta

tiona l injury

a lle ge d in the c om

p la int. Tha

t NAC A’ s re que ste d
2m one ta

ry award wa s ba se d on First One ’ s profits doe s not m e an the award would have be e n re s titutiona

ry in na ture . Se e , e .g. , N inte ndo of Am., Inc . v . Dragon Pac
. Int’l , 40 F.3d 1007, 1011 (9th C ir. 1994) (de fe n da nts’ profits m ay

be use d a s a
m e a sure of c om

pe nsatory dam a ge s in La

nha m Ac t c la im s). This c a se is distinguisha

ble from San Migue l C

ommunity Ass’n v . State Farm Ge ne ral Insuranc eC o . , 163 C a l. R

ptr. 3d 358 (C a l. C t. App. 2013), a nd Gunde rson v . Fire

Insuranc e Ex c hange , 44 C a l. R p tr. 2d 272 (C a l . C t. App. 1995), whe re the insure d s’ pote ntia l lia bility wa s de e m e d too spe c ulative to trigge r the duty to de fe nd. Unlikethose c a se s, First One ’ s pote ntia l lia b ility did not re q

uire spe c ulation a

bout a dditiona l a lle gations tha t c ould ha ve be e n, but we re not, inc l ude d in the c om

pla int. Se e

, e .g. , Hudson Ins. C

o. v . C olony Ins. C o. , 624 F.3d 1264 (9th C ir. 2010) (insure r ha d duty to de fe nd whe re c om

pla i nt did not a sse rt a
c ove re d c la im

but c onta ine d fa c tua l a lle g at ions supporting suc h a c la im ). M ore o ve r, unlike in S

an Migue l and Gunde r

son , Ha rtford produc e d no de c la

ra tion from NAC A’ s c o unse l disa

vowing a ny c la im for c om pe nsatory dam a ge s. B e c a use the unde rly ing a c tion pote ntia lly sought da

m a ge s c o ve re d by

the polic y , Ha

rtford wa s not e ntitle d to sum m ary judgm e nt. 1

1 W e e xpre ss no opinion re ga rding the m e rits of othe r grounds on whic h Hartford m ay

have re se rve d the right to c onte st its duty to de fe nd First One
. 3RE V E RSE D
.

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