Court Opinion

ID: 4575392
Source: CourtListenerOpinion
Date Created: 2020-10-09 21:01:23.896835+00
Date Added: 2024-06-11T13:32:08.049672
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        OCT 9 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JENSEN SHIRLEY; KAREN SHIRLEY,                  No.    19-56066

                Plaintiffs-Appellants,          D.C. No.
                                                3:18-cv-00994-AJB-BGS
 v.

ALLSTATE INSURANCE COMPANY,                     MEMORANDUM*

                Defendant-Appellee.

                  Appeal from the United States District Court
                     for the Southern District of California
                  Anthony J. Battaglia, District Judge, Presiding

                            Submitted October 7, 2020**
                               Pasadena, California

Before: M. SMITH and OWENS, Circuit Judges, and CARDONE,*** District
Judge.

      Jensen and Karen Shirley (collectively, the “Shirleys”) appeal from the

district court’s summary judgment in favor of Allstate Insurance Co. (“Allstate”)

      *
             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 Kathleen Cardone, United States District Judge for the
Western District of Texas, sitting by designation.
on their California state law claims for breach of contract and insurance bad faith.

We review de novo a district court’s decision to grant summary judgment. Folkens

v. Wyland Worldwide, LLC, 882 F.3d 768, 773 (9th Cir. 2018). As the parties are

familiar with the facts, we do not recount them here. We have jurisdiction under

28 U.S.C. § 1291. We affirm.

      1.     Under California law, the Shirleys bear the initial burden in their

breach of contract claim “to prove that an event is a claim within the scope of the

[insurance policy’s] basic coverage.” Aeroquip Corp. v. Aetna Cas. & Sur. Co., 26

F.3d 893, 894–95 (9th Cir. 1994) (citation omitted). Allstate’s policy insures the

Shirleys against “physical loss to property,” defined as “physical injury to . . .

tangible property.” The parties agree that fire contamination constitutes physical

injury under the policy.

      The Shirleys failed to prove that ash or soot physically contaminated their

home. After the Shirleys filed their claim with Allstate, four inspectors from three

firms visited the Shirleys’ home and took samples of suspected ash or soot. None

of these four inspectors found evidence of fire contamination, including soot and

ash. In the absence of physical contamination, the Shirleys rely on subjective

reports of a smoke smell in their home. However, the agreement explicitly

precludes coverage based on “vapors” or “fumes.” The Shirleys therefore have not

presented a genuine dispute of material fact regarding the alleged physical damage

                                           2                                    19-56066
to their home. See Folkens, 882 F.3d at 773 (describing standard for summary

judgment).

      The Shirleys also allege that Allstate’s inspector ignored “burnt

landscaping” on their property. However, the Shirleys do not advance any

argument about whether the damage to their landscaping falls within the scope of

their insurance coverage or whether they submitted a claim to Allstate for such

alleged damages. The Shirleys have therefore forfeited this issue. See Kohler v.

Inter-Tel Techs., 244 F.3d 1167, 1182 (9th Cir. 2001) (“Issues raised in a brief

which are not supported by argument are deemed abandoned.” (citation omitted)).

      2.     “A covenant of good faith and fair dealing is implied in every

insurance contract” under California law. Frommoethelydo v. Fire Ins. Exch., 721

P.2d 41, 44 (Cal. 1986) (citation omitted). To fulfill this implied covenant, “an

insurer must give at least as much consideration to the interests of the insured as it

gives to its own interests” and cannot “unreasonably and in bad faith withhold[]

payment of the claim of its insured.” Id. To receive punitive damages for breach

of an implied covenant, the plaintiff also must prove that the defendant “acted with

the requisite intent to injure [the] plaintiff.” Silberg v. Cal. Life Ins. Co., 521 P.2d

1103, 1110 (Cal. 1974).

      Allstate properly withheld benefits and did not breach its contract with the

Shirleys. Because no benefits are owed, Allstate cannot be liable for acting in bad

                                            3                                     19-56066
faith when it refused to pay the Shirleys. See Manzarek v. St. Paul Fire & Marine

Ins. Co., 519 F.3d 1025, 1034 (9th Cir. 2008) (“[W]ithout a breach of the insurance

contract, there can be no breach of the implied covenant of good faith and fair

dealing.” (citation omitted)). Furthermore, because the Shirleys did not prove that

Allstate acted in bad faith—let alone with “intent to injure”—they are not entitled

to punitive damages. Silberg, 521 P.2d at 1110. The district court properly

granted summary judgment on these claims.

      AFFIRMED.

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