Court Opinion

ID: 9910831
Source: CourtListenerOpinion
Date Created: 2023-12-18 18:00:56.700498+00
Date Added: 2024-06-11T12:55:22.427340
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       DEC 18 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

GOLD CREEK CONDOMINIUM-PHASE I No. 22-35606
ASSOCIATION OF APARTMENT
OWNERS, a Washington non-profit D.C. No. 3:20-cv-05690-RJB
corporation,

                Plaintiff-Appellant,            MEMORANDUM*

 v.

STATE FARM FIRE AND CASUALTY
COMPANY, an Illinois corporation;
TRAVELERS CASUALTY INSURANCE
COMPANY OF AMERICA, a Connecticut
company; ST. PAUL FIRE AND MARINE
INSURANCE COMPANY, a Connecticut
company; AETNA CASUALTY AND
SURETY COMPANY, a Connecticut
company; AETNA CASUALTY
INSURANCE COMPANY OF ILLINOIS, a
Connecticut company; TRAVELERS
CASUALTY AND SURETY COMPANY, a
Connecticut company,

                Defendants-Appellees.

                   Appeal from the United States District Court
                     for the Western District of Washington
                    Robert J. Bryan, District Judge, Presiding

                      Argued and Submitted October 3, 2023

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                 Seattle, Washington

Before: WARDLAW and M. SMITH, Circuit Judges, and HINKLE,** District
Judge.

      Gold Creek Condominium-Phase I Association of Apartment Owners (Gold

Creek)1 appeals the district court’s order excluding Gold Creek’s expert testimony

and its orders granting summary judgment in favor of Defendants-Appellees,

several insurance companies, including State Farm and Travelers.2 Because we

assume the parties’ familiarity with the facts, we recount them here only as

necessary. We affirm.

1.    The district court properly granted summary judgment to State Farm based

on its suit limitation clause. Gold Creek’s State Farm policy states that, “No action

shall be brought unless . . . the action is started within one year after the occurrence

causing loss or damage.” Because the policy’s plain text unambiguously requires

that Gold Creek bring suit within one year of rain events during the policy period

(from 1989 to 1990) and because Gold Creek effectively filed suit nearly thirty

years later, the policy bars claims against State Farm.

      Panorama Vill. Condo Owners Ass’n Bd. of Directors v. Allstate Ins. Co., 26

      **
              The Honorable Robert L. Hinkle, United States District Judge for the
Northern District of Florida, sitting by designation.
1
  We deny as moot Gold Creek’s motion to extend time to file reply brief (Dkt. 61).
2
  “Travelers” refers to several separate, named defendants who eventually became
part of the same corporate family.

                                           2
P.3d 910 (Wash. 2001) is distinguishable because Washington interpreted the

policy language there—“after a loss occurs”—to require suit be brought within one

year after the completion of hidden loss, i.e. when the loss was discovered. The

policy language here does not state that a suit must be brought within a year “after

a loss occurs.” It states that a suit must be brought within a year “after the

occurrence causing loss or damage.” This distinction makes a difference. The

phrase “after a loss occurs” focuses on the triggering event of the loss. See

Panorama, 26 P.3d at 914. The phrase “after the occurrence causing loss or

damage” focuses on the triggering event of the cause. The “loss” may not have

“occurred” until the hidden decay was exposed to view, but the “occurrence”

causing the loss are rainstorms that took place during the policy period, which no

party argues were concealed from view. Cf. Villella v. Public Employees Mut. Ins.

Co., 725 P.2d 957 (Wash. 1986) (distinguishing between losses and causes

occurring during policy period).

      Even if we interpret “occurrence” to include continuous occurrences, such

occurrences that take place after the policy period cannot cause “loss to property

during the policy period,” as required to trigger coverage under the policy. Thus,

the latest date that Gold Creek could bring suit under State Farm’s policy was in

1991. This reading is supported by the very next sentence in the policy, which

explicitly implements a discovery rule for employee dishonesty claims. See

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Transcon. Ins. Co. v. Wash. Pub. Utils. Dists.’ Util. Sys., 760 P.2d 337, 340 (Wash.

1988); Ellis Court Apartments Ltd. Partnership ex rel. Woodside Corp. v. State

Farm Fire and Cas. Co., 72 P.3d 1086, 1090 (Wash. Ct. App. 2003). Because

Gold Creek did not bring suit within a year of the last rain event causing damage

during the policy period, the district court properly dismissed its claims against

State Farm.

2.    The district court did not abuse its discretion in excluding Soltner’s testimony.

We review the exclusion of expert testimony for abuse of discretion to determine

whether the court “performed a sufficiently rigorous evaluation of [the expert’s

testimony] and did not ‘reach[] a result that is illogical, implausible, or without

support in inferences that may be drawn from the record.’” Murray v. S. Route Mar.

SA, 870 F.3d 915, 922 (9th Cir. 2017) (citing United States v. Hinkson, 585 F.3d

1247, 1262 (9th Cir. 2009) (en banc)). District courts are vested with “broad

latitude” to “decide how to test an expert’s reliability and whether or not an expert’s

relevant testimony is reliable.” Murray, 870 F.3d at 923 (cleaned up).

      Although a reasonable judge could disagree as to the reliability of Soltner’s

opinion, it was not “illogical, implausible, or without support in inferences that may

be drawn from the record,” id. at 922, to exclude it. The court performed a rigorous

evaluation, holding two separate Daubert hearings and, although brief in its

reasoning, cited specific testimony to justify its decision. It held that Soltner’s

                                          4
opinion that “the loss or damage occurred during the policy periods in this 40-year-

old building is speculative and is based on assumptions not supported by the

evidence or Mr. Soltner’s experience.” In support of this conclusion, it pointed to

two admissions by Soltner, that (1) there is no way to identify which rain events

cause damage and which do not and (2) there is no way to determine when damage

actually occurred.

      These admissions provide support for the district court’s determination that

Soltner could not reliably testify that new damage, as opposed to new rain events,

occurred each year.     Soltner’s scientific analysis pales in comparison to that

identified by appellants in Elosu v. Middlefork Ranch Inc., 26 F.4th 1017 (9th Cir.

2022), where the district court ignored a litany of evidence presented by the expert,

including photographs, charts, artifacts, weather data, a forensic report, and

reconstruction of the scene of the fire, and improperly weighed the expert’s

conclusions against the testimony of eyewitnesses. Id. at 1028–29.

      Further, the district court reasonably excluded Soltner’s methodology

examining weather data, which included arguably arbitrary bright lines and a

questionable reading of the scientific literature.

3.    The district court properly granted Travelers’ motion for partial summary

judgment. Washington law requires the insured to “show the loss falls within the

scope of the policy’s insured losses.” McDonald v. State Farm Fire & Cas. Co., 837

                                           5
P.2d 1000, 1003–04 (Wash. 1992). It remains unsettled, however, which trigger of

coverage rule applies for property insurance. See Hillhaven Props. Ltd. v. Sellen

Const. Co., 948 P.2d 796, 800 (Wash. 1997); Ellis Court, 72 P.2d at 1090

(“Washington has not recognized the manifestation doctrine in prior first-party

cases, and we decline to adopt it here.”). Because the district court properly granted

Travelers’ motion under any of the three trigger rules, we need not address which

one applies.

      First, Travelers’ policy would not cover Gold Creek under the manifestation

rule because Gold Creek did not discover the claimed damage until 2018, nearly

twenty-two years after the policy period expired. See e.g., Prudential-LMI Com.

Ins. v. Superior Ct., 798 P.2d 1230, 1247 (Cal. 1990) (holding that when the

“undisputed evidence establishes that no damage had been discovered before a given

date (i.e., no manifestation occurred), then insurers whose policies expired prior to

that date could not be liable for the loss”).

      Second, under the injury-in-fact rule, Travelers’ policy would not cover

Gold Creek because damage did not “commence” during the policy period.

Travelers’ policy states that they “cover loss or damage commencing: . . . [d]uring

the policy period.” Under the injury-in-fact rule, “commencing” means “first

beginning.” Ellis Court, 72 P.3d at 1090; Mercer Place Condo. Ass’n v. State

Farm Fire & Cas. Co., 17 P.3d 626, 629–30 (Wash. Ct. App. 2000). No evidence

                                            6
in the record shows that new damage necessarily commenced between 1991 and

1996, even if existing damage worsened.

      Finally, under the continuous trigger rule, Appellant need only show that

some damage occurred during the policy period. Am. Nat. Fire Ins. Co. v. B & L

Trucking and Const. Co., 951 P.2d 250, 255 (Wash. 1998); Eagle Harbour Condo.

Ass’n v. Allstate Ins. Co., No. C15-1312, 2017 WL 1316936, at *6 (W.D. Wash.

Apr. 10, 2017). However, Travelers’ deductible policy states that it “will not pay

for loss or damage in any one occurrence until the amount of loss or damage

exceeds the Deductible. . . .” We interpret “occurrence” to mean a rain event

causing damage during the policy period, and there is no evidence in the record

that such an event occurred during the policy period. Further, no evidence exists

demonstrating that, between 1991 and 1996, (1) the damage existing in 2018

occurred, (2) even one panel of gypsum sheathing was damaged, or (3) any

gypsum sheathing needed to be completely replaced. Thus, this record would not

permit a reasonable juror to conclude that damage exceeding the deductible

occurred during the policy period.

AFFIRMED.

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