NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

EDMARK AUTO, INC., an Idaho corporation; and CHALFANT CORP., an Idaho corporation ,

Plaintiff s - Appell ee s ,

v.
ZURICH AMERICAN INSURANCE COMPANY, a New York corporation; and UNIVERSAL UNDERWRITERS SERVICE CORPORATION, a Delaware corporation ,

Defendant s - Appell ants

. No. 2 1

- 35231
Case . No. 1:15

- cv - 00520

- BLW

MEMORANDUM *

Appeal from the United States District Court

for the District of Idaho B. Lynn Winmill , District Judge Argued and Submitted March 7, 2022 Seattle, Washington
Before: NGUYEN, MILLER, and BUMATAY, Circuit Judges. Idaho car dealership group s Edmark Auto , Inc. and Chalfant Corp oration (“Dealers”) fi led an action against insurance companies Universal Underwriters Service Corporation and Zurich American Insurance Company (“Zurich”) , alleging

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

MAR 17 2022
MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

breach of contract , various tort and fraud theories, and unfair business practices
under the Idaho Consumer Prot ection Act. After an 11

- day trial, a jury found in
favor of the Dealers and awarded them damages for breach of contract, disgorgement, and punitive damages

. Zurich now appeals the non

- contract verdicts, alleging a variety of errors. We have jurisdiction under 28 U.S.C § 1291 , and we
affirm.
1. We affirm the jury’s verdict on the breach of fiduciary duty. Under Idaho law, w hether a fiduciary relationship exists is a question of law. Beaudoin v.
Davidson Tr. Co. , 263 P.3d 755, 759 (Idaho 2011). We review the district court’s determination that a fiduciary relationship existed between Dealers and Zurich under
Idaho law de novo. See Judd v. Weinstein , 967 F.3d 952, 955 (9th Cir. 2020). “Fiduciary relationships are commonly characterized by one party placing property or authority in the hands of another, or being authorized to act on behalf of another.”
Beaudoin , 263 P.3d at 760 (simplified). “A fiduciary relationship does not depend

upon some technical relation created by or defined in law, but it exists in cases where there has been a special confidence imposed in another who, in equity and good conscience, is bound to act in good faith and with due regard to the interest of one reposing the confidence.” Jones v. Runft, Leroy, Coffin & Matthews, Chartered , 873 P.2d 861, 868 (Idaho 1994) (simplified). “Generally speaking, where one party is under a duty to act or to give advice for the benefit of the other upon a matter within3

the scope o f the relation, a fiduciary relationship exists.” City of Meridian v. Petra
Inc. , 299 P.3d 232, 248 (Idaho 2013) (simplified)

. Under Idaho law , a fiduciary duty does not ordinarily arise between parties to an arm’s length business transaction

. High Valle y Concrete, L.L.C. v. Sargent , 234 P.3d 747, 752 (Idaho 2010) . But certain relationships, even contractual relationship s , do give rise to a fiduciary dut y
. “Examples of relationships from which the law will impose fiduciary obligations on the parties inc lude when the parties are: members of the same family, partners, attorney and client, executor and beneficiary of an estate, principal and agent, insurer and insured, or close friends. ”
Id. (quoting Mitchell v. Barendregt , 820 P.2d 707, 714 (Idaho Ct. App. 1991 ) )

. We conclude that Zurich owed a fiduciary duty to Dealers. Dealers “ plac [ed]
property

. . . in the hands ” of Zurich in the form of $80 per vehicle service contract (“VSC”) , and Zurich was “ authorized to act on behalf of [Dealers]” by refundin g customers who cancelled their VSCs. Beaudoin , 263 P.3d at 760. Dealers also reposed a “ special confidence ” in Zurich to steward the funds, calculate future liabilities, periodically report on the account’s health, and make sure the program
remained sol vent. Jones , 873 P.2d at 868

. Further, Zurich was “ under a duty to act or to give advice for the benefit ” of Dealers because Dealers relied on Zurich’s expertise in calculating future liabilities, managing large

- dollar accounts, and4

modifying the per

- VSC deposit if necessary to maintain the account’s solvency

. Meridian , 299 P.3d at 248

. We reject Zurich’s argument that the relationship mirror s that of a bank and
de positor, which is not a fiduciary relationship. See Palmer v. Idaho Bank & Tr. of
Kooskia , 603 P.2d 597, 600 & n.2 (Idaho 1979) (analogizing the bank/depositor relationship to that of debtor/creditor)

. As described above, Zurich owed more obligations to Dealers than to merely safeguard funds. The uniqueness of the program and Zurich’s close relationship with Dealers distinguishes this case from a garden variety debtor/creditor relationship. For these reasons, we affirm the district

court ’ s conclusion that a fiduciary relationship arose between Zurich and Dealers. Because the jury found that Zurich breached its fiduciary duties, its award of $4 million in disgorgement damages is appropriate. Parkinson v. Bevis , 448 P.3d 1027,
103 3 (Idaho 20 19 ) (Under Idaho law, “ [a] breach of fiduciary duty claim is an equitable claim for which a defendant may have to disgorge compensation received during the time the breach occurred, even if the plaintiff cannot show actual damages

. ” ). We also uphold the j ury’s award of punitive damages. See Rockefeller
v. Grabow , 39 P.3d 577, 587 (Idaho 2001) (upholding jury’s award of punitive damages in a breach of fiduciary duty case).
2. Because the breach of fiduciary duty claim independently supports the
award of disgorgement and punitive damages, we need not reach Zurich’s other5

arguments

. See Webb v. Sloan , 330 F.3d 1158, 1167 (9th Cir. 2003) ( W hen a jury specifies on what claims it bases liability, “there is no danger that the jury found liability only on a legally defective theory.”)

. AFFIRMED.