Court Opinion

ID: 181448
Source: CourtListenerOpinion
Date Created: 2010-12-21 01:01:31+00
Date Added: 2024-06-11T17:25:55.380238
License: Public Domain

FILED
                            NOT FOR PUBLICATION                              DEC 20 2010

                                                                         MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                        U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

CHARLES RENFREW, Ret. Futures                    No. 09-17290
Representative to the Western Asbestos
Settlement Trust; THE TRUST                      DC No. 4:08 cv 4127 PJH
ADVISORY COMMITTEE TO THE
WESTERN ASBESTOS SETTLEMENT
TRUST,                                           MEMORANDUM *

              Plaintiffs - Appellees,

THE WESTERN ASBESTOS
SETTLEMENT TRUST,

              Plaintiff-intervenor -
Appellee,

  v.

HARTFORD ACCIDENT AND
INDEMNITY COMPANY,

              Defendant - Appellant.

                   Appeal from the United States District Court
                      for the Northern District of California
                   Phyllis J. Hamilton, District Judge, Presiding

                     Argued and Submitted December 7, 2010

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                              San Francisco, California

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

      Hartford Accident and Indemnity Company (“Hartford”) appeals the district

court’s affirmance of the bankruptcy court’s order granting Appellees’ motion for

partial summary judgment and issuing a permanent injunction. We have

jurisdiction under 28 U.S.C. § 158(d)(1), and we affirm.

      1.     The terms “review” and “audit” do not necessarily imply rights to

disseminate or use for unlimited purposes the information that is reviewed and

audited. Furthermore, the extrinsic evidence in this case supports the bankruptcy

court’s conclusion that the parties did not intend those terms in the Settlement

Agreement and Release (the “Settlement”) to encompass such rights.

      2.     The bankruptcy court correctly considered extrinsic evidence in its

interpretation of the Settlement. See Pac. Gas & Elec. Co. v. G.W. Thomas

Drayage & Rigging Co., 442 P.2d 641, 644-46 (Cal. 1968). Because the terms

“review” and “audit” do not necessarily encompass the unlimited use of the audited

and reviewed information, the bankruptcy court’s interpretation of Section 14.1 of

the Settlement based on extrinsic evidence did not “add to, detract from, or vary

      **
             The Honorable Robert E. Cowen, Senior United States Circuit Judge
for the Third Circuit, sitting by designation.

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the terms of” that agreement. Id. at 645. It did not constitute an abuse of

discretion on the part of the bankruptcy court to admit the declaration of Alan

Brayton, see DP Aviation v. Smiths Indus. Aerospace & Def. Sys. Ltd., 268 F.3d

829, 836 (9th Cir. 2001), because the out-of-court statement described in that

declaration was not submitted “to prove the truth of the matter asserted,” Fed. R.

Evid. 801(c), but instead was submitted to show the mind-set and knowledge of the

parties at the time of negotiation. See United States v. Castro, 887 F.2d 988, 1000

(9th Cir. 1989).

      3.     There is no “rigid rule” prohibiting a trial court from interpreting an

ambiguous contract on summary judgment. San Diego Gas & Elec. Co. v. Can.

Hunter Mktg. Ltd., 132 F.3d 1303, 1307 (9th Cir. 1997). Summary judgment was

appropriate in this case because there was no “genuine issue of material fact”

presented by the extrinsic evidence, Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v.

Argonaut Ins. Co., 701 F.2d 95, 97 (9th Cir. 1983), and because any ambiguity in

the Settlement language could not be resolved in a manner reasonably consistent

with Hartford’s position, see S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885,

889 (9th Cir. 2003); San Diego Gas & Elec. Co., 132 F.3d at 1307.

      4.     Because the bankruptcy court correctly interpreted Section 14.1 of the

Settlement and based the injunction on that interpretation, it is unnecessary for us

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to determine whether trust claimant information is confidential under California

law.

       5.    The bankruptcy court did not abuse its discretion by setting a six-

month limit on Hartford’s retention of audit materials. See Walters v. Reno, 145

F.3d 1032, 1047 (9th Cir. 1998). In the event Hartford is unable reasonably to

complete the audit within the six-month period provided in the injunction, it may,

of course, move for modification of the bankruptcy court’s order.

       AFFIRMED.

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