NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHASE CONSTRUCTION NORTH WEST 

INC., a Washington Company, 

Plaintiff-Appellant, 

 v. 

AIX SPECIALTY INSURANCE 

COMPANY, a foreign insurer, 

Defendant-Appellee.

No. 15-35591 

D.C. No. 2:15-cv-00019-RAJ 

MEMORANDUM*

Appeal from the United States District Court

for the Western District of Washington

Richard A. Jones, District Judge, Presiding

Submitted February 8, 2018**

Seattle, Washington

Before: M. SMITH and MURGUIA, Circuit Judges, and ROBRENO,*** District 

Judge.

This case arises out of a general commercial liability insurance policy (“the 

 

* 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).

*** The Honorable Eduardo C. Robreno, United States District Judge for 

the Eastern District of Pennsylvania, sitting by designation.

FILED

FEB 13 2018

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
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Policy”) that Plaintiff-Appellant Chase Construction North West, Inc. (“Chase”) 

purchased from Defendant-Appellee AIX Specialty Insurance Company (“AIX”). 

The Policy covered property damage arising from Chase’s commercial operations

as a construction and remodeling company. When the Oakbrook Country Club 

Condominium Association (“Oakbrook”) sued Chase over an allegedly defective 

roofing project, AIX refused coverage on the grounds that the Condo Exclusion 

applied to exclude coverage. Relevant here, the Policy excluded work performed in 

connection with condominiums (the “Condo Exclusion”), except where “such 

work is being done under contract with the owner(s) of the single unit being 

worked on” (the “Exception”). Chase filed suit in the United States District Court 

for the Western District of Washington, seeking a declaration that, under the 

Policy, AIX had a duty to defend and indemnify Chase against the Oakbrook 

lawsuit. Chase now appeals from the district court’s decision granting summary 

judgment for AIX and concluding that AIX had no duty to defend or indemnify 

Chase against the Oakbrook lawsuit. We have jurisdiction pursuant to 28 U.S.C. 

§ 1291, and we affirm. 

Reviewing de novo, we conclude that the district court correctly concluded 

that the Condo Exclusion applies to exclude from coverage damage arising out of 

the roofing work performed by Chase on Buildings I and D, on the grounds that it 

constitutes property damage arising from work performed “in connection with any 
3 

condominium.” We reject Chase’s argument that the term “unit” can be read to 

mean a “single entity” or “any group of things . . . regarded as an entity,” such that 

Buildings I and D, each containing multiple condominiums, can be regarded as a 

“single unit” for the purposes of the Exception to the Condo Exclusion. Chase has 

not shown how this interpretation reflects the ordinary meaning of the term. Kish v. 

Ins. Co. of N. Am., 883 P.2d 308, 311–12 (Wash. 1994) (Courts give undefined 

policy terms their “plain, ordinary, and popular meaning.”). Under Washington law 

“units” is used to describe portions of a condominium designated for separate 

ownership. See, e.g., Wash. Rev. Code §§ 64.34.020(41), 64.34.204(1),

64.34.216(d); see also, e.g., Rouse v. Glascam Builders, Inc., 677 P.2d 125, 129 

(Wash. 1984) (discussing the rights of “individual unit owners” in common areas); 

Fairway Estates Ass’n of Apartment Owners v. Unknown Heirs & Devisees of 

Young, 289 P.3d 675, 680 (Wash. Ct. App. 2012) (defining “unit” to be an area

designated for separate ownership). Chase cites no authority in which buildings 

containing multiple condominiums are discussed or defined as “units,” and Chase 

concedes that Oakbrook had no ownership interest in either the individual units, 

the buildings, or the roofs. Chase’s interpretation is also inconsistent with the way 

the term “unit” is used in the Policy, which elsewhere refers to “single family 

units” to denote a residential unit that cannot be subdivided. See Allstate Ins. Co. v. 

Bauer, 977 P.2d 617, 620 (Wash. Ct. App. 1999) (“Courts view insurance 
4 

contracts in their entirety and do not interpret phrases in isolation.”).

Moreover, we agree with the district court that the extremely broad 

interpretation offered by Chase would render the Condo Exclusion either nugatory 

or absurd because any condominium work contracted through the owner of an 

individual residential unit, the owners of multiple units, and/or the agent for 

multiple owners would be covered under the Policy, effectively reading out of the 

Exception the portion that limits coverage to work being done “under contract with 

the owner(s) of the single unit being worked on.” See Pub. Util. Dist. No. 1 of 

Klickitat Cty. v. Int’l Ins. Co., 881 P.2d 1020, 1026 (Wash. 1994) (“Overall, a 

policy should be given a practical and reasonable interpretation rather than a 

strained or forced construction that leads to an absurd conclusion, or that renders 

the policy nonsensical or ineffective.”); Bauer, 977 P.2d at 620 (“Insurance policy 

language is interpreted . . . in a way that gives effect to each provision.”).

In sum, it is not enough that Chase has presented one possible definition of 

“unit,” where that interpretation has not been shown to be reasonable. See Kaplan 

v. Nw. Mut. Life Ins. Co., 65 P.3d 16, 25 (Wash. Ct. App. 2003). Because Chase 

has not presented a reasonable alternative interpretation of the Condo Exclusion, 

we conclude that the Exclusion is unambiguous and applies to exclude coverage on 

the claims raised in the Oakbrook litigation. See Allstate Ins. Co. v. Hammonds, 

865 P.2d 560, 562 (Wash. Ct. App. 1994) (“A clause in [an insurance] policy is 
5 

ambiguous when, on its face, it is fairly susceptible to two different interpretations, 

both of which are reasonable.” (citation omitted)).

AFFIRMED.