Court Opinion

ID: 2673877
Source: CourtListenerOpinion
Date Created: 2014-05-13 00:01:18.320543+00
Date Added: 2024-06-11T09:20:04.816796
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAY 12 2014

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

                           FOR THE NINTH CIRCUIT

IONIAN CORP., an Oregon corporation,             No. 12-35708

            Plaintiff-counter-defendant-         D.C. No. 3:10-cv-00199-HZ
cross-defendant - Appellant,

  v.                                             MEMORANDUM*

COUNTRY MUTUAL INSURANCE
COMPANY,

              Defendant,

  And

PRECISION SEED CLEANERS, INC.,

            Defendant-counter-plaintiff-
cross-claimant - Appellee.

IONIAN CORP., an Oregon corporation,             No. 12-35794

            Plaintiff-counter-defendant-         D.C. No. 3:10-cv-00199-HZ
cross-defendant - Appellee,

  v.

COUNTRY MUTUAL INSURANCE

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

              Defendant,

  And

PRECISION SEED CLEANERS, INC.,

            Defendant-counter-plaintiff-
cross-claimant - Appellant.

                   Appeal from the United States District Court
                            for the District of Oregon
                   Marco A. Hernandez, District Judge, Presiding

                        Argued and Submitted March 7, 2014
                                 Portland, Oregon

Before: TROTT and W. FLETCHER, Circuit Judges, and BLOCK, Senior District
Judge.**

      This is an interpleader action to determine Precision Seed Cleaners and

Ionian Corporation’s respective rights to property and casualty insurance proceeds

that Country Mutual Insurance Company deposited with the district court after a

fire destroyed a warehouse owned by Ionian and leased by Precision. We affirm in

part, reverse in part, vacate in part, and remand to the district court to (1) grant

        **
             The Honorable Frederic Block, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
                                            2
Ionian leave to add a crossclaim for unjust enrichment, and (2) determine each

parties’ insured financial interest in the proceeds and award them accordingly.

                                           I

      The district court correctly found that Ionian, not Precision, owned the

warehouse at the time of the fire. The unambiguous language of the letter

agreement contemplated only a future intent to sell the warehouse, see Yogman v.

Parrott, 937 P.2d 1019, 1021 (Or. 1997) (en banc), and the absence of terms that

are required, or would usually be included, in a land sale contract further evidence

that future intent, see Dalton v. Robert Jahn Corp., 146 P.3d 399, 410 (Or. Ct. App.

2006). Precision was nothing more than a lessee of the warehouse.

                                          II

      The district court appropriately heard Precision’s untimely second motion

for summary judgment. First, the district court prudently modified its pretrial

schedule in order to hear Precision’s motion because the motion had the potential

to resolve this dispute short of trial. See Fed. R. Civ. P. 16(b)(4); United States v.

Dang, 488 F.3d 1135, 1142–43 (9th Cir. 2007). Second, the court properly

declined to estop Precision from arguing that the policy provided Ionian with

liability coverage only. Precision’s positions were not “clearly inconsistent” and

                                           3
Precision did not derive an unfair advantage from its new position. New

Hampshire v. Maine, 532 U.S. 742, 750–51 (2001).

                                           III

      However, the district court abused its discretion by denying Ionian leave to

timely add an unjust enrichment crossclaim and clearly erred by awarding all of the

proceeds to Precision. Critically, the district did not appreciate the “Loss

Payment” provision of the insurance policy, which states that Country “will not

pay [Precision] more than [its] financial interest in the Covered Property” and

“may adjust losses with the owners of [the] property . . . [but] will not pay the

owners more than their financial interest in the property.” Indeed, had Precision

not objected to the settlement between Ionian and Country, Country would have

provided some amount of compensation to Ionian long ago. Having affirmed that

Ionian owned the warehouse at the time of the fire, there remains no doubt that

Ionian must be compensated for its loss. The contract language pertaining to

liability coverage is irrelevant to this dispute.

      Further, we disagree that the district court lacked subject matter jurisdiction

to remedy that loss. Awarding all of the proceeds to Precision would contradict the

plain terms of the insurance policy, see Garrett v. State Farm Mutual Ins. Co., 829
P.2d 713, 716 (Or. Ct. App. 1992) (stating that the court’s “function is to ascertain

                                            4
the meaning of language used and enforce it according to its legal effect”), and

would result in Precision’s wrongful acquisition of more than its fair share of the

proceeds, see Tupper v. Roan, 243 P.3d 50, 57 (Or. 2010) (en banc) (“[T]he

common thread [in unjust enrichment claims] is the acquisition or retention of

property in a way that is in some sense wrongful . . . .”). We therefore have

jurisdiction over Ionian’s unjust enrichment claim based not on the lease, but on

the Loss Payment provision of the insurance policy that is central to this

interpleader action.

      The district court thus abused its discretion by not allowing Ionian to add an

unjust enrichment crossclaim, and further erred by awarding all of the insurance

proceeds to Precision. On remand, the district court shall give Ionian leave to

amend, determine the respective insured financial interests each party has in the

proceeds, and divide the proceeds accordingly.

      Each party shall bear its own costs related to this appeal.

      AFFIRMED in part, REVERSED in part, VACATED in part, and

REMANDED.

                                          5