N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
JAM ES P. PREVITI, e t a l., Pla

intiffs - Appe lla

nts,
v. NATIONAL UNION FIR E INSUR ANC E C OM PANY OF PITTSB UR GH, PA, De fe nda

nt - Appe lle e . No. 13-56368 D.C . No. 5:13-C V-00190-DDP-OP
M EM O R 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 De a n D. Pre ge rson, Distric t

Judge , Pre siding Argue d a nd Subm itte d Oc tobe r 22, 2015 Pa sa de n a , C a l ifornia B e fore : R AW LINSON a

nd NGUYEN, C irc uit Judge s , a nd PONSOR , Se nior Distric t Judge
. ** Appe lla nts Ja m e s P. Pre viti, TheJa

m e s Pre viti Fa

m i ly Trust, Pre viti R e a lty Fund, LP, La

rry Da y , Em pire Partne rs, Inc ., Em

pire R e s ide ntia l, Inc ., Fore c a st



# FIL ED JAN 22 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 9th C ir. R . 36-3. ** The Honora

ble M ic ha e l A. Ponsor, Se nior Distric t Judge for the U.S. Distric t C ourt for M a ssa c huse tts, sitting by de s igna tion.C orporation, Gua rdia n C om m e rc ia l R e a l Esta

te , LP, Gua

rdia n Inve stm e nt C a

pita l, LLC , Ne il M i l le r, an d Pa

ul R om an (“ Pre viti Pa

rtie s” ) a ppe a l from

the pa rtia l judgm e nt e nte re d a ga inst the m and in fa vor of Appe lle e Nationa l Union Fire Insura nc e C om pa ny of Pittsburgh. Na

tiona l Union issue d to thePre viti Pa rtie s thre e Dire c tors, Offic e rs a nd Priva te C om pa ny Lia bility insura nc e polic ie s for the
c onse c utive pe riods De c e m be r 31, 2007, to April 28, 2009 (the “ 2007-2009 Polic y ” ), April 28, 2009, to April 28, 2010 (the “ 2009-2010 Polic y ” ), and April 28, 2010, to April 28, 2011 (the “ 2010-2011 Polic y ” ). Ea c h polic y provide d a

lim it of lia bility of $10 m illion. In Novem be r 2008, thePre viti Pa

rtie s se nt to Na

tiona l Union a c opy of a m otion for e ntry

of orde r c onve rting C ha

pte r 11 ba nkruptc y c a se s to C ha

p te r 7 (the “ C onve rsion M otion” ), whic h a lle ge d pre fe re ntia l a nd fraudule nt tra

nsfe rs of m one y

from the de btor c om

pa nie s to non-debtor a ffilia

te s. Nationa l Union a c c e pte d the C onve rsion M otion a s a Notic e of C irc um sta

nc e s invoking c ove ra ge unde r the 2007-2009 Polic y . Afte r the C h a

pte r 7 truste e file d its first a c tion on M ay 12, 2009, the

Pre viti Partie s subm itte d a

c l a im unde r the 2007-2009 Polic y , for whic h Nat iona l Union
a gre e d to a dva

nc e de fe nse c osts. The re a fte r, the Pre viti Pa rtie s a rgue d tha t the subse q ue nt twe nty -se ve n c la im s file d a ga i nst the m fe l l unde r the late r two polic ie s, thus e ntitling them

to a d va nc e m e nt of a

n a d ditiona l $20 million in de fe nse c osts 2unde r the 2009-2010 a n d 2010-2011 Polic ie s. The distric t c ourt gra nte d pa rtia l
sum m ary judgm e nt for Na

tiona l Union, finding tha

t a ll twe nty -e ight a c tions, toge the r c a lle d the Unde rly ing Ac tions, fe ll unde r the 2007-2009 Polic y a lone , e ntitling the

Pre v iti Pa

rtie s only to $10 million in c o ve ra ge , a nd not to a

n a dditional $20 million provide d through the subse que nt polic ie s. W e have jurisdic tion to re vie w the distric t c ourt’ s fina l de c ision under 28 U.S.C . § 1291. W e re v ie w de n ov o both thedistric t c ourt’ s gra nting of pa

rtia l
sum m ary judgm e nt a

nd its interpre tation of thec o ntra c t. U.S. C e llular Inv . C

o. v . GTE Mobilne t, Inc
. , 281 F.3d 929, 933-34 (9th C ir. 2002). W e a ffirm
. On a ppe a l, the Pre viti Pa

rtie s offe r thre e argum e nts: first, tha t in gra nting pa rtia l sum m ary judgm e nt the distric t c ourt a pplie d a n inc orre c t burde n of proof;
se c o nd, tha

t the distric t c ourt c o nstrue d the te rm “ R e lat e d Wrongful Ac ts” in the
re le va nt polic ie s ove r broa dly ; a nd, third, tha

t the distric t c ourt e rre d in c onc luding that the 2008 Notic e of C irc um sta nc e s c onstitute d suffic ie nt notic e a s to a ll of the Unde rly i ng Ac tions. None of the se argum e nts withsta n ds sc rutiny
. First, the distric t c ourt a

p plie d the prope r burde n of proof in c onc luding tha t Nationa l Union produc e d suffic ie nt e vide nc e e sta blishing tha

t the re wa s no pote ntia l for c ove ra ge a

nd tha t, the re fore , the burde n shifte d to thePre viti Pa rtie s 3to se t forth spe c ific fa c ts to c re ate a ge nuine issue of m ate ria l fa c t re ga rding this issue
. N i ssan Fire & Marine

Ins. C o., Ltd. v . Fritz C

os., Inc
. , 210 F.3d 1099, 1102-03 (9th C ir. 2000) (sta ting tha t the m oving pa

rty ha s the burde n of produc t ion
and pe rsua sion on a

m o tion for sum

m ary judgm e nt, but onc e tha

t burde n is m e t, the n on-m oving pa

rty m ust produc e suffic ie nt e vide n c e to c re ate a ge n uine issue of
m ate ria l fa c t, othe rwise the “ m oving pa rty wins them o tion” ); G a saw ay v . N w . Mut. Life Ins. C o. , 26 F.3d 957, 959-60 (9th C i r. 1994) (sta t ing tha t onc e the
m oving pa

rty shows the re is no ge nuine issue of m ate ria l fa c t, the non-m oving pa rty m ust ove rc om e tha

t showing by going “

be y o nd the ple a dings” an d with m ore tha n “ m e re a lle gations or de nia ls” ) (quota tions omitte d). Se c ond, the Pre viti Pa

rtie s’ argum e nt tha

t the distric t c ourt’ s inte rpre tation of the te rm

“ R e late d Wrongful Ac ts” wa s ove rly broa d is fore c lose d by

the
una m biguous la

ngua ge of the c ontra c t. S tanford Univ. Hosp. v . Fe d. Ins. C o. , 174 F.3d 1077, 1083 (9th C ir. 1999) (sta t ing tha t c ontra c t la ngua ge “ m

ust be inte rpre te d a s a

whole and in thec irc um sta n c e s of the c a se ” ); Bay C itie s Pav ing & Grading, Inc . v . Law

y e rs’ Mut. Ins. C

o. , 5 C a l. 4th 854, 867 (1993) (sa m e ). The te rm “ R e late d Wrongful Ac ts,” whe n c onstrue d with theothe r c o ntra c t provisions,
e nc om pa sse s a broa d range of a c ts c le arly e x te nding to all the Unde rly ing Ac tions. Inde e d , the Pre viti Pa

rtie s the m se lve s re pe ate dly c onc e de d during the c ourse of the 4ba

nkruptc y litiga tion tha t the Unde rly ing Ac tions we re re lat e d. Give n this, the distric t c o urt did not err in de te rm i ning tha t the Unde rly ing Ac tions we re e xc lude d from c ove ra ge unde r the two la te r polic ie s be c a

use the a c t ions a ll a

rose out of

“ R e late d Wrongful Ac t s,” a s de fine d unde r the first polic y . Se e Bay C itie s Pav ing & Grading, Inc
. , 5 C a l. 4th a t 873 (noting the

broa d sc ope of the te rm

“ re late d” ). Third, there c ord firm ly

e sta blishe s tha

t the Notic e of C irc um s ta nc e s subm itte d unde r the 2007-2009 Polic y qua lifie d a s a

notic e for a ll the Unde rly ing Ac tions, a s it a lle g e d a

broa d fra udule nt sc he m e involving both de b tor inside rs a

nd non-de btor a ffilia

t e s, a s we ll a s que stiona

ble pre - and post-pe tition tra nsfe rs. C f. C ont’l Ins. C

o. v . Me tro-Goldw

y n-May e r , Inc
. , 107 F.3d 1344, 1348 (9th C ir. 1997) (c onc luding tha

t a notic e wa s suffic ie ntly

spe c ific whe re it provide d a ll the inform at ion tha

t wa s a va ila ble during the polic y

pe riod, se t forth thede ta ils of the
e ve nts a nd pote ntia l c onse que nc e s , a nd ga ve a “ la undry list” of pote ntia l c la im s). AFFIRM E D.

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