Court Opinion

ID: 181909
Source: CourtListenerOpinion
Date Created: 2010-12-29 01:01:49+00
Date Added: 2024-06-11T17:25:57.308062
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                DEC 28 2010

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

                            FOR THE NINTH CIRCUIT

LINDA ENGER,                                     No. 09-17785

              Plaintiff - Appellant,             D.C. No. 2:09-cv-02618- GEB-
                                                 EFB
  v.

ALLSTATE INSURANCE COMPANY,                      MEMORANDUM*
an Illinois Corporation; ALLSTATE
PROPERTY AND CASUALTY
COMPANY, an Illinois Corporation,

              Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Eastern District of California
                    Garland E. Burrell, District Judge, Presiding

                     Argued and Submitted December 9, 2010
                            San Francisco, California

Before:       COWEN,** TASHIMA, and SILVERMAN, Circuit Judges.

       Plaintiff-Appellant Linda Enger appeals from the district court’s dismissal of

her action for failure to state a claim upon which relief can be granted. Fed. R.

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Robert E. Cowen, Senior United States Circuit Judge
for the Third Circuit, sitting by designation.
Civ. P. 12(b)(6). The primary issue on appeal is whether Enger must complete the

appraisal process set forth in her homeowners’ insurance policy before bringing

suit. We have jurisdiction pursuant to 28 U.S.C. § 1291. We review de novo the

district court’s dismissal of a complaint for failure to state a claim and denial of

leave to amend, accepting all factual allegations in the complaint as true and

drawing all reasonable inferences in favor of the plaintiff. Oki Semiconductor Co.

v. Wells Fargo Bank, 298 F.3d 768, 772 (9th Cir. 2002). We affirm.

      Enger’s claims are based on allegations that defendants-appellees Allstate

Insurance Company and Allstate Property and Casualty Company (together

“Allstate”) improperly undervalued her damaged personal property. Despite

Enger’s attempts to characterize her suit as raising issues of statutory interpretation

warranting declaratory relief, the resolution of this appeal depends on whether the

insurance policy’s appraisal provision applies to the parties’ dispute. This is a

straightforward question of contract interpretation. E.g., Laventhal v. Fidelity &

Cas. Co. of N.Y., 98 P. 1075, 1076 (Cal. Ct. App. 1908) (stating that an insurance

“policy is but a contract, and, like all other contracts, it must be construed from the

language used”). “The rules governing policy interpretation require us to look first

to the language of the contract in order to ascertain its plain meaning or the

meaning a layperson would ordinarily attach to it.” Waller v. Truck Ins. Exch.,

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Inc., 900 P.2d 619, 627 (Cal. 1995). Where, as here, the language of the policy is

“clear and explicit” and “does not involve an absurdity,” it governs interpretation

of the policy. Cal. Civ. Code § 1638.

      Enger alleges that Allstate significantly undervalued her claim because it

failed properly to calculate the “actual cash value” of the lost property, as that term

is defined by Cal. Ins. Code § 2051. Among other things, she seeks additional

payment to compensate her for her property loss. In the words of the insurance

policy’s appraisal provision (which is taken from the statutory standard form, Cal.

Ins. Code § 2071(a)), she and Allstate have “fail[ed] to agree as to the actual cash

value or the amount of loss.” Allstate has requested an appraisal. This is sufficient

to trigger the appraisal process to resolve the dispute as to the actual cash value of

the lost property. Cal. Ins. Code § 2071(a); Gebers v. State Farm Gen. Ins. Co., 45

Cal. Rptr. 2d 725, 727 (Ct. App. 1995) (“Since its substance was first enacted in

1909, Insurance Code section 2071 has directed that the standard form for fire

insurance policies include an appraisal provision to settle disagreements

concerning the amount of loss.”).

      By the plain language of the insurance policy, it is immaterial that Enger

believes the cause of the disagreement concerning the actual cash value is

Allstate’s alleged use of an improper valuation method. The contract makes no

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exception where the source of the dispute is the valuation method used: so long as

the parties “fail to agree as to the actual cash value or amount of loss,” the

appraisal remedy is triggered at the request of either party. Figi v. N. H. Ins. Co.,

66 Cal. Rptr. 774, 777 (Ct. App. 1980) (explaining that the state’s standard fire

insurance form includes an “appraisal clause which provides if the insured and the

company disagree as to the actual cash value of a loss, then each shall select a

‘competent and disinterested’ appraiser and the two selected appraisers then choose

a third such appraiser”). Until an appraisal is completed, it is impossible to know

whether Enger’s claim in fact was undervalued, such that her claims for breach of

contract, breach of the covenant of good faith and fair dealing, and Cal. Bus. &

Prof. Code § 17200 et seq., are viable. Furthermore, because “full compliance with

the policy terms” is a contractual prerequisite to bringing suit, Enger first must

submit to the appraisal. Her arguments that compliance with the appraisal

provision is excused or that the provision should be disregarded because she seeks

declaratory relief are unpersuasive. Accordingly, the judgment of the district court

is

      AFFIRMED.

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