NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHARLENE SUE COX, of Charlene Sue Cox Revocable Trust Dated 10

- 9

- 08; ROSE E. HUTCHINSON; TIMOTHY A. HUTCHINSON; LESLIE HUTCHINSON; NICOLAS HUTCHINSON; GEORGE BURTON REX; MELISSA RAE REX; EDITH SHELTON, and as custodian for Amy Shelton; WILDISH STANDARD PAV ING CO.; ROBERT SHELTON,

Plaintiffs

- Appellants,

v.
LIBERTY INSURANCE UNDERWRITERS, INC.,

Defendant

- Appellee. No. 18

- 35301
D.C. Nos. 3:17

- cv - 01461

- MO

3:17

- cv - 01462

- MO

MEMORANDUM *

Appeal from the United States District Court for the District of Oregon Michael W. Mosman, District Judge, Presiding Argued and Submitted June 3, 2019 Portland, Oregon Before: MURGUIA and HURWITZ, Circuit Judges, and ZIPPS, ** District Judge.

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

- 3.

** The Honorable Jennifer G. Zipps, United States District Judge for the District of Arizona, sitting by designation. 

# FILED

JUL 19 2019
MOLLY C. DWYER, CLER K U.S. COURT OF APPEAL S2

The plaintiffs are i nvestors in B erjac of Oregon and Berjac of Portland (collectively “Berjac”)

. Berjac filed a Chapter 11 reorganization in 2012. On August 28, 2014, the plaintiffs sued Jones & Roth, P.C. (“JR”) , which had provided accounting services to Berjac

. At the time the Chapte r 11 petition was filed , Liberty Insurance Underwriters, Inc. insured JR under a professional l iability “ claims made and reported” policy ( the “Liberty Policy” )

. The policy ter m expired on October 15,
2012

. JR stipulated to judgment in the investors ’ suit in return in part for a covenant by the investors not to execute an d assigned its claims under the Liberty Policy to
the investors

. 1 The investors then filed the underlying garnishment action against Liberty. After a combined summary judgment hearing and bench trial, t he district

court entered judgment in favor of Liberty. This appeal by the investors followed

. 2 We have jurisdiction under 28 U.S.C. § 1291 and affirm.
1. The district court correctly held that JR did not notify Liberty of a p otential

c laim by the investors during the policy period , a prerequisite for coverage under the

1 JR stipulated to a $3,500,000 judgment that could be only collected from Liberty. XL Insurance, which ha d issued a claims

- made policy to JR effective October 15, 2012, agreed to cover a $625,000 settlement to the investors

.

2 The Berjac Chapter 11 reorganization had been converted to Chapter 7 proceedings. Thomas Huntsberger , the Chapter 7 trustee, was a party to the underlying garnishment action, but the appeal was voluntarily dismissed with prejudice as to him.3

Liberty Policy

. A representative of J R telephone d Liberty’s managing general agent
durin g the policy period a n d informed the agent of the Berjac Chapter 11 filing, some Oregon regulatory orders involving Berjac, and JR’s previous provision of accounting services to Berja c
. But , as a p r er e quisite to coverage of claims not made during the policy period, the Liberty Policy required JR to explain “why the
Potential Claim may become a Claim

. ” Even assuming strict compliance with th at provision was not required , see Sutton v. Fire Ins

. Exch

. , 5 09 P.2d 418, 419

– 20 ( Or. 1973) , the district court did not err in concluding that the information supplied by
JR during the policy period did not even substantially comply with th e policy requirement. Indeed, when applying for a subsequent claims

- made policy from
another insurer , JR did not list the investors’ claims as “claim s or incident s
. . . notified to an insurance company

. ”
2. The district court also did not err in holding that the so

- called “ notice

prejudice rule ” does not apply in this case . The rule is typically applied to occurrence policies, which cover events occurring during the policy period , because
it s application “ does not materially alter the insurer’s risk.” Or

. Sch. Activities Ass ’ n v. Nat'l Union Fire Ins. Co. of Pittsburgh , 279 F. App’x 494, 495 (9th Cir. 2008) (unpublished) (citation omitted) . But , for a claims

- made policy, “giving notice within the policy period is what actually creates coverage in the first instance.” Id .;
see also Burns v. Int’l Ins. Co. , 929 F.2d 1422, 1424

– 25 (9th Cir. 1991) ( applying4

California l a w a nd declining to apply the notice

- prejudice rule to a claims

- made policy)

. 3

. Nor is there coverage by estoppel. Although Liberty may have represented that notice of a Potential Claim through a telephone call would suffice, it did not represent or engage in conduct suggesting that JR did not need to provide the
information required by the Liberty Policy in that notice

. See Kabban v. Mackin , 801 P.2d 88 3, 886 (Or. Ct. App. 1990).
AFFIRMED.