NOT FOR PUBLICATION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

GREAT AMERICAN E & S INSURANCE COMPANY,
Plaintiff

- Appellee,

v. THEOS MEDICAL SYSTEMS, INC.,

Defendant

- Appellant , SAKET BHATIA,

Counter

- claimant

- Appellant

. No. 19

- 15351
D.C. No. 5:17

- cv - 05660

- LHK

MEMORANDUM *

Appeal from the United States District Court for the Northern District of California Lucy H. Koh, District Judge, Presiding Submitted March 25, 2020 * * San Francisco, California Before: GOULD, CHRISTEN, and BRESS, Circuit Judges. Theos Medical Systems, Inc. and Saket Bhatia ( collectively, “Theos”) appeal

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

- 3.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 

# FILED

APR 1 2020
MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

the district court’s order granting summary judgment to Great American E&S Insurance Company on (1) Gre at American’s request for declaratory judgment that it had no duty to defend or indemnify Theos in a civil contempt proceeding; and (2) Theos’ counterclaim for breach of the implied covenant of good faith and fair dealing. We assume the parties’ familiari ty with the facts and procedural history

. We have jurisdiction under 28 U.S.C. § 1291 and now affirm. The parties agree that California law applies to this insurance coverage action

. Under California law, “[a] liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity .” Montrose Chem. Corp. v. Superior Court , 861 P.2d 1153 , 1157 ( Cal. 1993) (quotations omitted). But the duty
to defend “i s not unlimited .” Wa ller v. Truck Ins. Exch., Inc. , 900 P.2d 619 , 628 ( Cal. 1995) . “[W]here there is no possibility of coverage, there is no duty to
defend

. . . . ” Id. at 627 (quotations omitted). This court “review [s] the district court’s grant or denial of summary judgment” and “its interpretation of state law and the insurance policies de novo.” Westport Ins. Corp. v. Cal. Cas. Mgmt. Co. , 916 F.3d 769, 773 (9th Cir. 2019)

. Consistent with precedent , t he district cou rt appropriately analyzed the policies’ coverage provisions before turning to their exclusions

. S ee , e.g. , Sony Comput

. Entm’t Am. Inc. v. Am. Home Assur ance Co. , 532 F.3d 1007, 1017 (9th Cir. 2008)

. We may affirm on any ground, Stevens v. Jiffy Lube Int ’ l, Inc. , 911 F.3d3

1249, 1252 (9th Cir. 2018) , and agree with the district court that the exclusions clearly apply to the civil contempt proceeding, such that Great American had no duty to defend or indemnify Theos in that proceeding

. As relevant here, t he p olicies exclude from coverage any “ suit” that alleges
claims “arising out of

” an y “ violation

. . . of any intellectual property right” or any

“ violation of any statutes, common law, or other laws or regulations concerning unfair competition. ” Under the p olicies, a “suit” is defined as “ a civil proceeding ”
in which specified damages are allege d

. The parties do not dispute that the underlying action in which the civil contempt proceeding arose (the so

- called
Malem Action ) constitutes a “suit” that alleges claims for intellectual property infringement and unfair competition

. Accordingly, the Malem Action is excluded from coverage.
It follows that t he c ontempt p roceeding , which ar o se in the Malem Action, is
excluded as well. Courts have long held that contempt proceedings are considered part of the suit in which they arise. See, e.g. , Leman v. Krentler

- Arnold Hinge Last
Co. , 284 U.S. 448, 452 (1932) (“The question of the relation of such a [civil contempt] proceeding to the main suit was fully considered in the case of Gompers
v. Buck [‘s] Stove & Range [

Co

. ] , 221 U.S. 418 [ (1911)] , and it was determined that the proceeding was not to be regarded as an independent one, but as a part of the original cause.”) ; Donovan v. Sureway Cleaners , 656 F.2d 1368, 1373 (9th Cir.4

1981) ( “[T]he filing of a civil contempt petition is not the commenc ement of an independent cause of action . . . but rat her is a part of the original cause of action .”);
see also Ahearn ex rel. NLRB v. Int ’ l Longshore & Warehouse Union, Locals 21 &
4 , 721 F.3d 1122 , 1131 ( 9th Cir. 2013)

. Theos argues that the policies’ i ntellectual p roperty and u nfair c ompetition exclusions violate public policy under California law

. This argument lacks merit
because California courts have regularly appl ied exclusions for various intellectual property cla ims

. S

ee, e.g. , S.B.C.C., Inc. v. St. Pau l Fire & Marine Ins. Co. , 112 Cal. Rptr. 3d 40 , 51 ( Cal. Ct. App. 2010) ; Aloha Pac., Inc. v. Cal

. Ins. Guar

. Ass ’ n , 93 Cal. Rptr. 2d 148, 164

– 65 ( Cal. Ct. App. 2000) ; Indus

. Indem. Co. v. Apple Comput

. , Inc. , 95 Cal. Rptr. 2d 528, 538 (Cal. Ct. App. 1999)

. Because Theos was not entitled to coverage, the district court also correctly granted Great American summary judgment on Theos’ counter claim for breach of the covenant of good faith and fair dealing. See, e. g. , Benavides v. State Farm Gen.
Ins. Co. , 39 Cal. Rptr. 3d 650, 656 (Cal. Ct. App. 2006). 1

AFFIRMED.

1 Theos’ m otion to s trike Great American’s s upplemental e xcerpts of r ecord is denied. See 9th Cir. R. 30

- 1. 5

.