Court Opinion

ID: 2778299
Source: CourtListenerOpinion
Date Created: 2015-02-10 21:01:33.547684+00
Date Added: 2024-06-11T10:53:54.215826
License: Public Domain

FILED
                            NOT FOR PUBLICATION                                FEB 10 2015

                                                                          MOLLY C. DWYER, CLERK
                   UNITED STATES COURT OF APPEALS                           U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In the Matter of: EDRA D. BLIXSETH,              No. 13-35098

              Debtor,                            D.C. No. 2:12-cv-00017-SEH

ROSS P. RICHARDSON, Chapter 7                    MEMORANDUM*
Trustee for Yellowstone Club World,
LLC; RICHARD J. SAMSON, Chapter
7 Trustee for the Estate of Edra D.
Blixseth,

              Plaintiffs - Appellants,

  v.

CINCINNATI INSURANCE
COMPANY,

              Defendant - Appellee.

                   Appeal from the United States District Court
                           for the District of Montana
                    Sam E. Haddon, District Judge, Presiding

                        Argued and Submitted August 4, 2014
                                Pasadena, California

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                                                                    page 2
Before:       KOZINSKI, PAEZ and BERZON, Circuit Judges.

       1. Cincinnati Insurance Company’s policy specifies that “[a]s a condition

precedent to coverage . . . [,] [t]he ‘policy insureds’ shall give [Cincinnati] written

notice of any ‘claim’ made against any of the ‘policy insureds’ for a ‘wrongful

act.’” It is undisputed that Yellowstone Club World and its bankruptcy trustee,

Richardson, are not “policy insureds.” Because the February 3, 2010 letter from

Richardson’s counsel notifying Cincinnati of Proof of Claim 46 was not sent by a

“policy insured,” Cincinnati does not have a duty to defend. See Steadele v.

Colony Ins. Co., 260 P.3d 145, 149 (Mont. 2011) (“when the language of a policy

is clear and explicit, the policy should be enforced as written”); La Bonte v. Mut.

Fire & Lightning Ins. Co. of Richland Cnty., 241 P. 631, 633, 635 (Mont. 1925)

(holding that the policy’s requirement that “the insured shall give immediate notice

[of loss or damage] . . . and . . . deliver to the [insurer] a particular statement in

writing of such loss or damage” is “a condition precedent, and failure to comply

therewith will bar a recovery under the policy”).

       2. Plaintiffs argue that Newman v. Scottsdale Insurance Co., 301 P.3d 348

(Mont. 2013), requires Cincinnati to defend Proof of Claim 46 because “[a]t the

time that [Cincinnati] refused to provide a defense in response to the [February 3,
                                                                                page 3
2010 letter from Richardson’s counsel] . . . , it was not unequivocally established

that the letter[] did not satisfy the notice provision in the Policy.” But Newman

only establishes that an insurer waives its right to refuse to defend on the basis of

an insured’s failure to comply with a notice requirement, where the insurer initially

denies coverage on some other ground. Id. at 360. Newman does not alter well-

settled Montana law that, absent such waiver, failure to comply with a notice

requirement bars recovery under the policy. See Steadele, 260 P.3d at 150; La

Bonte, 241 P. at 635. Here, the duty to defend never attached because the policy

insureds did not give written notice, as required by the express terms of the policy,

and Cincinnati identified that failure as its reason for denying coverage.

      3. In reaching the conclusion that Cincinnati did not have a duty to defend,

the district court reasoned that the February 3, 2010 notice was untimely because

the claims in Proof of Claim 46 did not arise out of the wrongful acts described in

the January 30, 2009 letters from Yellowstone Mountain Club’s counsel. We may

affirm on any basis supported by the record, so we need not address whether

Plaintiffs provided timely notice. See Gordon v. Virtumundo, Inc., 575 F.3d 1040,

1047 (9th Cir. 2009).

      AFFIRMED.