Court Opinion

ID: 7374883
Source: CourtListenerOpinion
Date Created: 2022-07-28 20:00:32.132468+00
Date Added: 2024-06-11T16:21:03.996160
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUL 28 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

PALOMAR HEALTH,                                 No.    21-56073

                Plaintiff-Appellant,            D.C. No.
                                                3:21-cv-00490-BEN-BGS
 v.

AMERICAN GUARANTEE AND                          MEMORANDUM*
LIABILITY INSURANCE COMPANY;
MORGAN JACKSON,

                Defendants-Appellees.

                   Appeal from the United States District Court
                     for the Southern District of California
                   Roger T. Benitez, District Judge, Presiding

                             Submitted July 26, 2022**
                             San Francisco, California

Before: M. MURPHY,*** GRABER, and McKEOWN, Circuit Judges.

      In this insurance coverage dispute arising under our diversity jurisdiction,

      *
             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 Michael R. Murphy, United States Circuit Judge for
the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
Plaintiff Palomar Health appeals the dismissal of its complaint. “We review de

novo a dismissal under Rule 12(b)(6), and we can affirm on any ground supported

by the record.” Thompson v. Paul, 547 F.3d 1055, 1058–59 (9th Cir. 2008).

Under California law, “interpretation of an insurance policy is a question of law.”

Waller v. Truck Ins. Exch., Inc., 900 P.2d 619, 627 (Cal. 1995), as modified on

denial of reh’g (Oct. 26, 1995). We affirm.1

        1. All of Plaintiff’s alleged losses fall under exclusions in the insurance

policies. Plaintiff’s claims rely on losses resulting from (1) the presence of the

COVID-19 virus on its property or (2) government orders.

        To the extent that Plaintiff’s claims rely on the presence of “Coronavirus and

COVID-19 particles” on its property, those claims are barred by the policies’

contamination exclusions. The insurance policies’ contamination exclusions apply

to “any cost due to Contamination including the inability to use or occupy

property” and define contamination to include “[a]ny condition of property due to

the actual presence of any . . . virus . . . .” Although each policy contains an

amendatory endorsement that removes the word “virus” from the exclusion, those

special endorsements apply only to property in Louisiana. Because Palomar does

not allege any loss or harm to property in Louisiana, the contamination exclusion

applies.

1
    Appellant’s Motion for Certification, Docket No. 44, is DENIED.

                                            2
       To the extent that Plaintiff’s claims rely on its compliance with government

orders related to the COVID-19 pandemic, the claims are barred by the policies’

government-order exclusions. Those exclusions apply to “[l]oss or damage arising

from the enforcement of any law, ordinance, regulation or rule regulating or

restricting . . . occupancy, operation, or other use . . . .”

       2. Because the policies did not cover the alleged losses, Plaintiff also fails to

state a claim against Defendant Morgan Jackson.2 Plaintiff asserts that Defendant

Jackson’s representations that several of Plaintiff’s losses were not covered

resulted in Plaintiff’s making business decisions that damaged it. But, as described

above, the losses were not covered, and thus Plaintiff could not have suffered

damages based on Defendant Jackson’s representations.

       AFFIRMED.

2
  Although the district court declined to rule on whether Plaintiff stated a claim
against Defendant Jackson, we are not precluded from reaching this question. See
Quinn v. Robinson, 783 F.2d 776, 814 (9th Cir. 1986) (“We have discretion to
decide whether to address an issue that the district court did not reach if the
question is a purely legal one and the record has been fully developed prior to
appeal.”). Because we hold that Plaintiff fails to state a claim against Defendant
Jackson, we need not review the district court’s conclusions concerning personal
jurisdiction.

                                             3