Court Opinion

ID: 1086622
Source: CourtListenerOpinion
Date Created: 2013-10-23 18:00:45.495232+00
Date Added: 2024-06-11T12:53:08.539341
License: Public Domain

FILED
                           NOT FOR PUBLICATION                             OCT 22 2013

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

                            FOR THE NINTH CIRCUIT

SILGAN CONTAINERS, LLC,                          No. 11-17637

              Plaintiff - Appellant,             D.C. No. 3:09-cv-05971-RS

  v.
                                                 MEMORANDUM*
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH,
PENNSYLVANIA and LIBERTY
MUTUAL FIRE INSURANCE
COMPANY,

              Defendants - Appellees.

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

                      Argued and Submitted October 11, 2013
                            San Francisco, California

Before: WALLACE, M. SMITH, and IKUTA, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Silgan Containers, LLC, appeals from the district court’s summary judgment

in favor of National Union Fire Insurance Company, Silgan’s excess insurer. We

have jurisdiction pursuant to 28 U.S.C. § 1291 and reverse and remand.

      “[P]roperty damage is not established by the mere failure of a defective

product to perform as intended,” F & H Constr. v. ITT Hartford Ins. Co., 118 Cal.

App. 4th 364, 372 (2004), unless the third party’s property becomes damaged at

the point of incorporation with the defective product. See, e.g., Shade Foods, Inc.

v. Innovative Prods. Sales & Mktg., Inc., 78 Cal. App. 4th 847, 865–66 (2000);

Armstrong World Indus., Inc. v. Aetna Cas. & Sur. Co., 45 Cal. App. 4th 1, 90–94

(1996). Therefore, the district court did not err in rejecting Silgan’s argument that,

as a matter of law, Del Monte’s tomato product was injured at the moment it was

put into the defective cans.

      Nevertheless, drawing all inferences in favor of Silgan, the record indicates

that Del Monte’s tomato product in at least some of the cans suffered a physical

injury during the policy period, and therefore there is a genuine issue of material

fact as to whether Silgan is entitled to coverage under the policy. Although Silgan

has the burden of quantifying the injury at trial, it need not quantify the exact

amount of damages at the summary judgment stage. See State v. Allstate Ins. Co.,

45 Cal. 4th 1008, 1035–36 (2009).

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      There is also a genuine issue of material fact as to whether Del Monte

suffered a “loss of use” of tomato product, as defined in the policy. See Anthem

Elecs., Inc. v. Pac. Emp’rs Ins. Co., 302 F.3d 1049, 1057 (9th Cir. 2002). Because

the district court rejected this argument, it did not address the relevant exclusions

under the insurance policy, an issue that National Union may raise on remand.

      The record does not provide any support for Silgan’s argument that Del

Monte’s disposal of the tomato product constituted reasonable steps to mitigate

property damage, and so we reject this claim. See AIU Ins. Co. v. Superior Court,

51 Cal. 3d 807, 833 (1990).

      REVERSED AND REMANDED.

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