N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
R OB ER T C HATELAIN; JANET C HATELAIN,

Pla i ntiffs-Appe lle e s,
v. C OUNTR

Y M UTUAL INSUR

ANC E C OM PANY,

De fe nda n t-Appe l la

nt. No. 18-35037

D.C . No. 3:15-c v-02013-M O
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ore gon M i c ha e l W . M osm a

n, Distric t Judge , Pre siding Argue d an d Subm itte d Nove m be r 5, 2019 Portla nd, Ore gon B e fore : PAEZ a

nd R AW LINSON, C irc uit Judge s, a nd KOB AYASHI, ** Distric t Judge
. Appe lla

nt C ountry

M utua l Insura

nc e C om pa ny (C ountry M utua l) a

ppe a ls the d istric t c o urt’ s judgm e nt in fa vor of Appe l le e s R obe rt a nd Ja ne t C hate la in 

# FIL ED
N OV 20 2019 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 Le slie E. Koba

y a shi, Unite d State s Distric t Judge for the D istric t of Ha

w a ii, sitting by

de signa tion.(C hate la ins) a fte r a jury de te rm ine d tha

t C ountry M utua l bre a c he d the insura nc e polic y issue d to the C hate la i ns a nd bre a c he d its duty

of good fa i th a

nd fa ir de a ling. The C hat e la ins sought c o ve ra ge unde r the polic y for prope rty

dam a ge , stole n
c attle , a nd m issing e quipm e nt a fte r e vic ting M artin a nd Je ane tte B ra

un (the B ra uns). The distric t c ourt prope rly he ld tha t the polic y ’ s c onve rsion e xc lusion did not una m biguously ba

r c ove ra ge of the C h ate l a ins’ the ft c la im
. 1 Unde r Ore gon la w, “ c o nve rsion m a

y oc c ur on a spe c t

rum from t

hemost outright, b latant k ind of the f t to wha t m ay be re ga rde d a s innoc e nt c onve rsion.” D av is v . F.W . Fin. Se rv

s., Inc
. , 317 P.3d 916, 926 (Or. C t . App. 2013) (c ita tion omitte d) (e m

pha se s a dde d). Due to this overla

p , if C o untry M utua l inte nde d to limit c ove ra g e ba se d on diffe re nc e s be t

we e n c onve rsion a

nd the sta tutory de finition for the ft, it ha d the opportunity

to do so when dra fting the e xc lusion, but none the l e ss le ft “ c onve rsion”
e ntire l y unde fine d. Se e Bighorn Logging C orp. v . Truc k

Ins. Ex c h. , 437 P.3d 287,

1 Although C ountry

M utua l a ppe a ls the distric t c ourt’ s pre tria l orde r gran ting theC hate la ins’ m otion to c om pe l produc tion of the c la im s file , C ountry M utua l fa ils to a de quate ly spe c ify how the individual doc um e nts qua l ifie d a s c onfide ntia l c om

m unic ations unde r the attorne y -c l ie nt privile ge , or tha t it wa s othe rwise pre

judic e d by

the c ourt’ s orde r. Se e Unite d State s v . C h riste nse n , 828 F.3d 763, 803-04 (9th C ir. 2016), a s ame n de d (a pply ing ha

rm le ss e rror re vie w a

nd e xpla ining tha

t “ [t] he c la im of privile ge m u s t be m a de and susta ine d on a que stion-by -que stion or doc um e nt-by -doc um e nt ba sis; a bla nke t c la im

of privile ge is una c c e pta

ble ” ) (c ita

t ion om itte d). 2294 (Or. C t. App. 2019) (a rtic ulating tha

t, whe n a n insura nc e provision is
am biguous, “ a

ny re a sona ble doubt a s to them e a

ning of theword or phra se will be
re solve d in fa

vor of the insure d a

nd a ga inst theinsure r” ) (c ita tion omitte d). In de ny ing C ountry

M utua l’ s m otion for judgme nt a s a m atte r of la

w , the distric t c o urt c om

m itte d no e rror in holding tha t the C hate la ins we re e ntitle d to dam a ge s for lost mi lk produc tion ba se d on the polic y ’ s c ove ra g e of “ loss c a use d by . . . the ft.” Unde r Ore gon la w, “ [i] t is a

n e sta blishe d rule of insura

n c e la w tha t whe re a pe ril spe c ific a lly

insure d a ga inst se ts othe r c a use s in m otion whic h , in a n unbroke n se que nc e and c onne c tion be twe e n the a c t a nd fina l loss, produc e s the
re sult for whic h re c ove ry is sought, the

insure d pe ril is re ga

rde d a s the proxim ate
c a use of the e ntire loss.” Gow ans v . N w . Pac . Inde m. C

o . , 489 P.2d 947, 948 (Or. 1971) (c ita

tion omitte d). The polic y ’ s de finition of “ loss” a s “ sudde n, a c c ide nta l dire c t phy sic a l da

m a ge ” doe s not e xplic i tly ove rride this rule , or una m biguously ba r c ove ra ge for losse s re sulting from the ft of live stoc k. The C hate la i ns, a s ordina ry purc ha se rs of a

farm insura n c e polic y , would not ha

ve be e n a ble to re a dily disc e rn tha

t the ir stole n da iry

c o ws, a s oppose d to building struc ture s or othe r phy sic a l prope rty , would besubje c te d to a phy sic a l da m a ge lim ita

tion, pa rtic ula rly
a s the polic y

de fine d “ prope rty

dam a ge ” a s “ phy sic a l injury to or de struc tion of ta ngible p rope rty , inc luding there sulting loss of use of this prope rty .” Se e Bighorn
3Logging C

orp., 437 P.3d a

t 294 (e xpla ining tha

t “ [w] e inte rpre t the te rm s of the polic y from the pe rspe c tive of a

n ordina ry purc ha se r of insura

nc e ” ) (c ita

t ion a nd inte rna l quota

tion m arks om itte d). 2 C ountry M utua l’ s c ha lle nge to the de nia l of its m otion for judgme nt a s a
m atte r of la

w on the C hate la ins’ the ft c l a im is unpe rsua sive . The C hat e la ins pre s e nte d suffic ie n t

e vide nc e tha

t it wa s “ like ly ” tha

t the ir c attle we re stole n

by the B ra uns, a s re q

u ire d by the polic y , ba se d on re duc t ion in thenum be r of c attle
c onte m p orane ous with the

B ra uns’ e vic tion. Se e Gre ise n v . Hank e n , 925 F.3d 1097, 1107 (9th C ir. 2019) (e xpla ining tha t “ a jury ’ s ve rdic t m

ust be uphe ld if it is supporte d by substa

ntia l e vide nc e , e ve n if it is al so possible to dra w a c ontra ry
c onc lusion” ) (c ita

tion a nd a lte ra tions omitte d). C ountry M utua l wa s not e ntitle d to a ne w tria l on the va

nda lism c la im be c a use the C hate l a ins pre se nte d suffic i e nt e vide nc e tha t the B ra uns willfully

or
m a lic iously

dam a ge d the C hate la ins’ prope rty through e xte nsive dam a ge to the
m a in fa rm house and othe r struc ture s. S e eMue lle r v . Auk

e r , 700 F.3d 1180, 1194

2 C ountry

M utua l ha s forfe ite d its a sse rtion tha t the distric t c ourt e rre d in not limiting da

m a ge s unde r the polic y ’ s sublimi t for loss of c attle be c a use it did not re ly on this provision in its m otion for judgme n t a s a

m atte r of la

w or in its re que s t for re m ittitur. S

e e Yamada v . N

obe l Bioc are Holding AG , 825 F.3d 536, 543 (9th C i r. 2016), as ame nde d (e xpla ining tha

t “ [g] e ne ra lly , a

n a ppe lla te c ourt will not he ar an issue ra i se d for the first tim e on a ppe a l” ) (c ita

tion omi tte d). 4(9th C ir. 2012), a s ame nde d (stating tha

t “ [t] he distric t c ourt’ s de nia l of a m otion for a n e w tria l is re ve rsible only if the re c o rd c o nta ins no e vide nc e in support of the
ve rdic t” ) (c ita

tion omitte d). In a warding pre

judgm e n t inte re st, the distric t c ourt a ppropria te ly de te rm i ne d tha

t the polic y ’ s pa

ym e nt provision did not una m biguously e sta

blish whe n pa ym e nt wa s due in the e ve nt C ountry M utua l bre a c he d the insura nc e
c ontra c t. Se e Patton v . Mut. of Enumc law Ins. C o. , 438 P.3d 441, 447 (Or. C t. App. 2019) (e xpla ining tha t “ e ve n whe n

the e xa c t a

m ount of da

m a ge s is not
a sc e rta i na ble until issue s of fa c t ha

ve be e n de c ide d by

the jury , pre

judgm e nt inte re s t is prope r” ) (c ita

t ion, a lte ra tion, a

nd inte rna l quota

tion m arks om itte d). AFFIRM E D.

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