Court Opinion

ID: 9396678
Source: CourtListenerOpinion
Date Created: 2023-05-23 16:00:53.342512+00
Date Added: 2024-06-11T17:19:18.833754
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 23 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

SAFECO INSURANCE COMPANY OF                     No.    22-35332
AMERICA,
                                                D.C. No. 9:21-cv-00036-DLC
                Plaintiff-Appellee,

 v.                                             MEMORANDUM*

JEFFREY JAMES HALVORSON,

                Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Montana
                   Dana L. Christensen, District Judge, Presiding

                      Argued and Submitted March 27, 2023
                              Seattle, Washington

Before: NGUYEN and HURWITZ, Circuit Judges, and EZRA,** District Judge.

      Jeffrey James Halvorson appeals a summary judgment in favor of Safeco

Insurance Company of America in this insurance coverage dispute. We have

jurisdiction under 28 U.S.C. § 1291. Reviewing de novo, see Universal Cable

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable David A. Ezra, United States District Judge for the
District of Hawaii, sitting by designation.
Prods., LLC v. Atl. Specialty Ins. Co., 929 F.3d 1143, 1151 (9th Cir. 2019), we

reverse and remand.

      “When interpreting [a Montana] insurance policy, we read the policy as a

whole and, if possible, we reconcile its various parts to give each one meaning and

effect.” Daniels v. Gallatin County, 513 P.3d 514, 518 (Mont. 2022). If the policy

is ambiguous from the perspective of a reasonable consumer giving terms their

usual, commonsense meaning, then we construe it “in favor of the insured with any

doubts resolved in favor of extending coverage.” Loendorf v. Emps. Mut. Cas.

Co., 513 P.3d 1268, 1272 (Mont. 2022).

      The district court concluded that the word “dwelling,” in isolation, is

ambiguous because it can take on “a broader meaning—encompassing multiple

structures.” We agree. The word references the activity in a particular place rather

than the place’s physical characteristics. See McFarland v. Liberty Ins. Corp., 434

P.3d 215, 221 (Idaho 2019) (“A survey of multiple dictionaries reveals that the

principal element of a dwelling is residence or habitation.”). For example, the

Missoula City-County Health Code, which applies to Halvorson’s property, defines

“[d]welling or residence” to encompass “one or more structures or portion

thereof.”

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      Thus, the sole issue is whether the balance of Halvorson’s homeowners

policy eliminates this ambiguity such that “dwelling” can reasonably only refer to

a single structure.1 We conclude that it does not.

      Safeco points to the differences between Coverage A and Coverage B.

Coverage A applies to “the dwelling . . . , including structures attached to the

dwelling other than fences, driveways or walkways.” Coverage B applies to “other

structures . . . separated from the dwelling by clear space.” The logical inference,

Safeco argues, is that “the dwelling constitutes a single structure unless the

dwelling and another structure are physically attached,” and “Coverage B extends

to all other structures which are not physically attached to the singular dwelling.”

      However, the Coverage A and B provisions make equal sense if “dwelling”

comprises two or more inhabited structures. The policy’s first two examples of

“other structures” are uninhabited structures—“retaining walls” and “decorative or

privacy walls”—suggesting that “other structures connected to the dwelling by

only a fence, utility line, plumbing, or similar connection” also refers to

uninhabited structures, such as a detached garage, tool shed, or gazebo. See Briese

v. Mont. Pub. Emps.’ Ret. Bd., 285 P.3d 550, 556 (Mont. 2012) (“[W]here a list of

specific things is followed by a more general word or phrase, the general word or

      1
        We do not address Safeco’s alternative contention regarding issue
preclusion because the district court has not yet done so. See Belaustegui v. Int’l
Longshore & Warehouse Union, 36 F.4th 919, 930 (9th Cir. 2022).

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phrase is interpreted to include only items that are ‘similar in nature’ to those

listed.” (quoting Mattson v. Mont. Power Co., 215 P.3d 675, 685 (Mont. 2009))).

      Safeco also points to Coverage A’s application to “the dwelling . . . used

principally as a private residence.” This “principal use” clause, Safeco argues,

shows that “the term dwelling refers to the singular structure being utilized

primarily as a private residence and separates that term from other structures on the

property.” But the more natural reading of the “principal use” clause is a

requirement that the dwelling (whether one or more structures) be used

predominantly for residential rather than business purposes. Such a construction

dovetails with the policy exclusion for other structures “used in whole or in part for

business” (emphasis omitted). If the “principal use” clause were intended to limit

Coverage A to one of multiple residential structures on an insured’s property, then

one would expect “principal” to modify “dwelling” rather than “use”—i.e., “the

principal dwelling . . . used as a private residence.” See Gullett v. Van Dyke

Constr. Co., 111 P.3d 220, 224 (Mont. 2005) (“[Q]ualifying words and phrases

[ordinarily] should be applied only to the words or phrases immediately

preceding . . . .” (quoting Am. Music Co. v. Higbee, 103 P.3d 518, 522 (Mont.

2004))).2

      2
        Safeco appears to have abandoned its contention that the undisputed facts
show that the outbuilding was not “used principally as a private residence,” as the
policy requires. When asked at oral argument whether the outbuilding was used

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      The cases to which the district court cited and on which Safeco primarily

relies are distinguishable. In Horak v. Middlesex Mutual Assurance Co., the policy

plainly referred to a single “dwelling building,” and the parties did not dispute that

coverage, if any, was for appurtenant structures under Coverage B. 436 A.2d 783,

783–84 (Conn. 1980) (per curiam). In American National Property & Casualty

Co. v. Williamson, the court did not apply the rule “that ambiguities in insurance

policies be resolved in favor of the insured” and instead “determine[d] how best to

interpret ‘dwelling,’” 547 F. Supp. 3d 741, 753 (S.D. Ohio 2021), which we are not

free to do.

      Because “dwelling” can refer to multiple inhabited structures and nothing in

the policy language renders such an interpretation unreasonable here, we reverse

the district court’s grant of summary judgment to Safeco and remand for further

proceedings.

      REVERSED and REMANDED.

more for residential than nonresidential activities, Safeco’s counsel acknowledged
“that is probably a close fact issue” because “there’s a lot of residential use of the
outbuilding.” We agree.

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