Court Opinion

ID: 2792161
Source: CourtListenerOpinion
Date Created: 2015-04-08 20:01:05.258509+00
Date Added: 2024-06-11T11:29:00.408332
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              APR 08 2015

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

                            FOR THE NINTH CIRCUIT

WILLIAM JAMISON; et al.,                         No. 12-17412

              Plaintiffs - Appellants,           D.C. No. 3:11-cv-04958-RS

  v.
                                                 MEMORANDUM*
CERTAIN UNDERWRITERS AT
LLOYD’S UNDER POLICY NO.
B0146LDUSA0701030,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Northern District of California
                     Richard Seeborg, District Judge, Presiding

                     Argued and Submitted February 12, 2015
                            San Francisco California

Before: PAEZ and BERZON, Circuit Judges and MORRIS,** District Judge.

       William Jamison and other plaintiffs (collectively, “Jamison”) appeal the

district court’s grant of the defendants’ motion to dismiss Jamison’s First Amended

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Brian M. Morris, District Judge for the U.S. District
Court for the District of Montana, sitting by designation.
Complaint without leave to amend. We review de novo and affirm. See Skilstaf,

Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir. 2012); Thinket Ink

Info. Res., Inc. v. Sun Microsystems, Inc., 368 F.3d 1053, 1061 (9th Cir. 2004).1

      1. Jamison argues that there are two reasons why the Directors, Officers and

Company Liability Policy’s Partial Professional Services Exclusion (the

“Exclusion”) does not bar Jamison’s claims: the Exclusion does not apply to

claims for acts “directly” as opposed to “indirectly” connected to professional

services or for acts relating to secondary as opposed to primary liability. The

Exclusion excludes claims “for any act, error or omission in connection with the

performance of any professional services by or on behalf of the Company for the

benefit of any other entity or person.”

      2. We apply California law, and “[w]hen the facts are undisputed, as they

are deemed to be on a ruling on a demurrer [or motion to dismiss], the

interpretation of a contract, including whether an insurance policy is ambiguous or

whether an exclusion or limitation is sufficiently conspicuous, plain, and clear, is a

question of law,” Hervey v. Mercury Cas. Co., 110 Cal. Rptr. 3d 890, 896 (Cal. Ct.

      1
        Jamison filed a motion to take judicial notice of a decision from the District
Court for the Eastern District of Michigan, Great Am. Ins. Co. v. Geostar Corp.,
No. 09-12488-BC, 2010 WL 845953 (E.D. Mich. Mar. 5, 2010). We deny the
motion as unnecessary, but consider the ruling’s persuasive value as a matter of
law. See Fed. R. Evid. 201.

                                           2
App. 2010). “Hervey indicates that California courts can find a contract

unambiguous in a motion on the pleadings.” Skilstaf, 669 F.3d at 1018 n. 11. “The

test of admissibility of extrinsic evidence to explain the meaning of a written

instrument is not whether it appears to the court to be plain and unambiguous on its

face, but whether the offered evidence is relevant to prove a meaning to which the

language of the instrument is reasonably susceptible.” Pac. Gas & Elec. Co. v. G.

W. Thomas Drayage & Rigging Co., 69 Cal. Rptr. 561, 564 (Cal. 1968).

      3. The Exclusion is not reasonably susceptible to Jamison’s interpretation.

To the extent Jamison’s interpretation would distinguish between “direct” and

“indirect” connections to professional services, the Exclusion does not so qualify

the phrase “in connection with.” Cf. Total Call Int’l, Inc. v. Peerless Ins. Co., 104

Cal. Rptr. 3d 319, 327–28 (Cal. Ct. App. 2010) (noting that an exclusion “discloses

no suggestion that it relates exclusively to [claims brought by consumers and not to

claims brought by competitors]; its language is broad and unqualified”). Further,

Jamison alleges that ePlanning’s subsidiaries rendered “direct” professional

services to third party customers without alleging that ePlanning, Inc. also rendered

such “direct” services to third party customers. See First Amended Complaint at ¶

27 (“[ePlanning, Inc.] does not provide professional services to clients.”). To the

extent Jamison’s interpretation would distinguish between primary and secondary

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liability, the Exclusion would apply to ePlanning, Inc. differently from how it

would apply to ePlanning’s subsidiary insureds, without the policy or the

Exclusion distinguishing between ePlanning, Inc. and its subsidiaries. Jamison’s

extrinsic evidence does not affect our analysis that the Exclusion is not reasonably

susceptible to Jamison’s interpretation.

      4. The district court’s ruling does not render the policy illusory. “An

agreement is illusory and there is no valid contract when one of the parties assumes

no obligation.” Scottsdale Ins. Co. v. Essex Ins. Co., 119 Cal. Rptr. 2d 62, 69 (Cal.

2002). The policy covers certain claims for an insured’s acts, errors, omissions,

misstatements, misleading statements, neglect, or breach of duty not in connection

with the performance of professional services for outside customers, for instance, a

shareholder derivative action for or securities regulatory agency investigation of an

alleged securities violation.

      AFFIRMED.

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