N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
KEVIN PER

R Y, a single individua l; C ATHER INE R ENEE HOLGUIN, a single individua l; NANC Y A. SM ITH, a single individua l; FAR

M ER S INSUR ANC E C OM PANY OF AR IZONA, a

n Ariz ona C o rpora t ion, Pla i ntiffs-Appe lla

nts,
v. PEAK PR OPER T Y AND C ASUALTY INSUR ANC E C ORPOR

ATION, a W isc onsin c orporation; UNKNOW N PAR TIES, nam e d

a s AB C B usine ss Entitie s I-X a

nd Doe s I-X, De fe nda n ts-Appe lle e s. No. 17-15012 D.C . No. 4:16-c v-00555-DC B
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ariz o na David C . B ury , Distric t Judge , Pre siding A rgue d a nd Subm itte d

August 14, 2018 Sa n Fran c isc o , C a lifornia 

# FIL ED
JAN 04 2019 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t 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.B e fore : SC HR OEDER , SILER , ** and M UR GUIA, C irc uit Judge s .

Pla intiff R e ne e Holguin c a use d a five -c ar a c c ide nt in Phoe nix, Ariz ona in Ja nua ry 2013. She and he r husba nd at the tim e , Ke vin Pe rry (c olle c tive ly , the

“ Holguin-Pe rry s” ), c o nta c te d de fe nda nt Pe a k Insura

nc e , but the c o m

pa ny re fuse d
c ove ra ge , c iting a

polic y c a nc e l lation notic e it m a ile d the Holguin-Pe rry s on Ja nua ry 19, 2013–thre e da

y s be fore the a c c ide nt. The Holguin-Pe rry s a

nd othe r injure d pa

rtie s sue d Pe a

k Insura nc e in fe de ra l
c ourt, se e king a

de c la ra tory judgm e nt tha

t the insura

nc e polic y wa s in e ffe c t on the da te of the a c c ide nt, a

nd a lle ging c la im s for bre a c h of c ontra c t a nd ba d fa ith. The distric t c o urt gra

n te d Pe a k Insura nc e ’ s m otion for judgme nt on the ple a d ings, ruling tha t the polic y

wa s c anc e lle d on Ja

nua ry 19, 2013. Pla i ntiffs a

ppe a l. For the
re a s ons e xpla ine d be low, we re ve rse . Unde r Ariz ona

la w, a n insure r’ s notic e of polic y c anc e lla tion m ust “ c le arly
and une quivoc a lly ” inform the insure d in no unc e rta in te rm s of the c om p any ’ s inte nt to c anc e l. N

orman v . State

Farm Mut. Auto. Ins. C

o ., 33 P.3d 530, 535 (Ariz
. C t. App. 2001). This expre ss inte nt “ [m u st] be a ppa re nt to theordina

ry pe rson.” Id . a t 536 (origina l bra c ke ts) (quoting Elk ins v
. State

Farm Mutual Auto.

* * The Honora

ble Euge ne E. Sile r, Unite d State s C irc uit Judgefor the U.S. C ourt of Appe a l s for the Sixth C irc uit, sitting by de signa t ion. 2Ins. C

o ., 475 S.E.2d 504, 506 (W . Va . 1996)). W he the r a c a n c e l lation notic e m e e ts N orman ’ s sta

nda rd is a c onte xt-spe c ific inquiry : c ourts foc us on the “ la ngua ge and the c irc um s ta

nc e s in whic h

[the notic e wa s ] issue d to de te rm ine whe the r any disqua lify ing a

m biguity ha s be e n c re a te d.” Id . at 537. He re , Pe a k Insura

nc e ’ s inte nt to c anc e l the polic y wa s not c le ar and
une quivoc a l. The c anc e lla tion notic e , writte n on Ja

nua ry 18, de c la re d tha t the Holguin-Pe rry s we re “ driving without insura n c e , ” but a lso sta

te d tha t c ove ra ge wa s
c onditiona l. A $286.37 pa ym e nt ha d to be re c e ive d by Ja n ua ry 19. The date tha

t Pe a k Insura

nc e m a ile d the notic e furthe r c o nfuse d the issue sinc e a c c ording to the
c anc e lla tion notic e , it wa s m a ile d on Ja nua ry 19, m a king it im

p ossible for the Holguin-Pe rry s to a c c e pt the a p pa re nt invita

tion to pa y the m i nim

um ba la nc e by Ja nua ry 19. The notic e itse l f wa s the re fore fa c ia lly am biguous. Inte rpre ting this notific a tion a s solic iting pa y m e nt upon re c e iving the
c anc e lla tion notic e , the Holguin-Pe rry s phone d Pe a k Insura nc e on Ja nua ry 23, 2013, whe n the y

re c e ive d tha

t n otic e , a nd im m e diate ly pa id $294.37. This a

m ount
wa s $8.00 m ore tha

n the m i nim

um re quire d pa

y m e nt. Ne ithe r party

e xp la ins wha

t the a dditiona l $8.00 re pre s e nte d . B e c a use Pe a k Insura

n c e ’ s e arlie r insta llm e nt notic e ha d

wa rne d tha t la te pa ym e n ts “ m ay

inc ur an a dditiona l fe e ,” t he Holguin3Pe rry s m a

y have a ssum e d the a dditiona l $8.00 wa s a late fe e . Pe a k Insura

nc e
a c c e pte d this la te pa ym e nt. Pe a k Insura

nc e ’ s c onduc t c ould ha

ve le d a n “ o rdina ry pe rson” in the Holguin-Pe rry s’ shoe s to be lie ve tha t Pe a k Insura nc e did not c a

nc e l the polic y

and that the re wa s no la

pse in c o ve ra ge . Se e id . at 536 (“ inc lusion of a re fe re nc e to a

n
a m ount due would le a d a

n ordina ry pe rson to be lie ve tha

t pa ym e nt of tha

t sum would ke e p the polic y

in forc e and a

void c anc e lla

tion.” ) (c i ting Elk

ins , 475 S.E.2d
a t 507). For the s e re a sons, we c onc lude tha t unde r Ariz ona

la w, ne ithe r Pe a k Insura nc e ’ s c an c e lla

tion notic e , nor a

ny subse que nt c onduc t, “ c le arly and
une quivoc a lly ” a dvise d the Holguin-Pe rry s tha t a pa ym e nt on Ja

n ua ry 23, 2013, would not pre se rve c ove ra ge . S e e id . at 535. The distric t c ourt e rre d whe n it
c onc lude d othe rwise
. De fe nda nts’ p e nding m otion to strike a portion of the

re ply brie f is De nie d. The judgm e nt in fa

vor of de fe nda

nts is R E V E RSE D and the c a se is RE M A NDE D for furthe r proc e e dings.

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