Court Opinion

ID: 7216366
Source: CourtListenerOpinion
Date Created: 2022-07-25 01:52:32.899818+00
Date Added: 2024-06-11T16:17:01.514454
License: Public Domain

Judge BERZON,
concurring in part and dissenting in part.
I respectfully dissent. Although General Star argues that the policy excludes damages caused by any breach of an employment contract, the policy nowhere so states.
The relevant exclusion states: Inappropriate Employment Decision shall not include damages determined to be owing under a written or express contract of employment or obligation to make payments, including but not limited to severance payments, in the event of the termination of employment, however, this provision does not apply to defense costs.
The sentence is ambiguous. First, it is not grammatical: It attempts to delineate certain types of “decisions” by reference to certain types of “damages.” More importantly, it is unclear whether the modifying phrase “to make payments ... in the event of the termination of employment” modifies only the term “obligation” or modifies both the term “obligation” and the term “contract of employment.” If the latter was intended, then the exclusion relating to express contracts is limited to “damages determined to be owing under a written or express contract of employment ... in the event of the termination of employment.” As such, the exclusion pertains only to contract provisions specifically targeted at payments made “in the event of termination” — that is, severance pay, liquidated damages, golden parachute payments, and the like. Because the pertinence of the modifying phrase is at least ambiguous, the exception must be construed against General Star. Consol. Am. Ins. Co. v. Mike Soper Marine Servs., 951 F.2d 186, 188 (9th Cir.1991) (“While a court is prohibited from adopting a *214strained or absurd interpretation in order to create an ambiguity, if ambiguity or uncertainty does exist, it must be resolved against the insurer.”)
I agree, however, that Wex’s stock options come within the policy’s exclusionary language. Although I do not believe that stock options are properly categorized as “benefits,” stock options are a form of “profit sharing” and therefore excluded from the Policy’s definition of “Loss.” I would therefore hold that General Star must indemnify TVN only for that portion of the arbitration award which did not relate to stock options.