Court Opinion

ID: 4243593
Source: CourtListenerOpinion
Date Created: 2018-02-08 21:00:26.163225+00
Date Added: 2024-06-11T13:27:24.543768
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 8 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

PIVEG, INC.,                                    No.    16-56003

                Plaintiff-Appellant,            D.C. No.
                                                3:15-cv-00981-DMS-JLB
 v.

GENERAL STAR INDEMNITY                          MEMORANDUM*
COMPANY,

                Defendant-Appellee.

                   Appeal from the United States District Court
                      for the Southern District of California
                    Dana M. Sabraw, District Judge, Presiding

                           Submitted February 6, 2018**
                              Pasadena, California

Before: CALLAHAN and NGUYEN, Circuit Judges, and PRATT,*** District
Judge.

      Piveg, Inc. (“Piveg”) appeals from the district court’s grant of summary

      *
             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 Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
judgment to General Star Indemnity Co. (“General Star”) on Piveg’s breach of

contract and related claims. We have jurisdiction under 28 U.S.C. § 1291.

Reviewing the district court’s summary judgment determination de novo and its

evidentiary rulings for abuse of discretion, see Pyramid Techs., Inc. v. Hartford

Cas. Ins., 752 F.3d 807, 813 (9th Cir. 2014), we affirm.1

      Piveg supplied defective astaxanthin oil to J&D Laboratories, Inc. (“J&D”).

After J&D’s customer NOW Foods, Inc. (“NOW”) rejected softgels made from

this astaxanthin oil, J&D demanded that Piveg reimburse J&D for the purchase

price NOW would have paid J&D had NOW not rejected the softgels. After some

negotiating, Piveg and J&D agreed that Piveg would fully reimburse J&D. Piveg

initially paid J&D $5,000 and continued to make payments for several months.

Piveg then tendered a claim to General Star, its insurer, based on property damage.

General Star denied coverage.

      General Star successfully moved for summary judgment on the ground that

the insurance policy’s no-voluntary payment (“NVP”) provision excluded

coverage to the extent Piveg “voluntarily ma[de] a payment, assume[d] any

obligation, or incur[red] any expense” to resolve third-party claims without

General Star’s consent. Such boilerplate provisions typically secure the insurer’s

      1
       As the parties are familiar with the facts and procedural history, we restate
them only as necessary to explain our decision.

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rightful and “complete” prerogative to “control . . . the defense or compromise of

suits or claims” against the unilateral commitments made by the insured.

Jamestown Builders, Inc. v. Gen. Star Indem., 91 Cal. Rptr. 2d 514, 517 (Ct. App.

1999) (quoting Gribaldo, Jacobs, Jones & Associates v. Agrippina Versicherunges

A.G., 476 P.2d 406, 415 (Cal. 1970)) (emphasis in Jamestown Builders omitted).

Here, Piveg assumed an obligation to pay J&D the entire amount of Piveg’s

insurance demand without General Star’s consent. This deprived General Star of

the ability to control any defense or settlement of the claim.

      That Piveg and J&D may have finalized the payment terms after General

Star denied the claim is inconsequential because explicit payment terms are

unnecessary to form a contract. See Facebook, Inc. v. Pac. Nw. Software, Inc., 640

F.3d 1034, 1037–38 (9th Cir. 2011) (“[A] contract that omits [material] terms . . .

is enforceable under California law, so long as the terms it does include are

sufficiently definite for a court to determine whether a breach has occurred, order

specific performance or award damages.” (citing Elite Show Servs., Inc. v. Staffpro,

Inc., 14 Cal. Rptr. 3d 184, 188 (Ct. App. 2004))).2 Nor does the statute of frauds

render Piveg’s agreement to pay J&D unenforceable, because the emails between

them sufficiently memorialize their agreement. See Cal. Civ. Code

      2
        Like the district court, we need not resolve whether an “assumed
obligation” clause in a policy requires an enforceable agreement between the
insured and the third party. In this case, there was.

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§ 1624(b)(3)(A). The district court properly granted summary judgment to

General Star.

      The district court did not abuse its discretion by striking certain portions of

Piveg’s chief executive officer Roberto Espinosa’s affidavit because “a party

cannot create an issue of fact by an affidavit contradicting his prior deposition

testimony.” Yeager v. Bowlin, 693 F.3d 1076, 1080 (9th Cir. 2012) (quoting Van

Asdale v. Int’l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009)). Espinosa testified

consistently and in detail that Piveg and J&D reached an agreement in November

2014 regarding the payment amount. His affidavit statement that this agreement

was not reached until September 2015 was clearly inconsistent with his deposition

testimony.

      Finally, the district court correctly resolved Piveg’s good faith and fair

dealing claim. To establish a breach of the covenant of good faith and fair dealing,

the insured must prove that benefits owed under the policy were unreasonably and

improperly withheld. See Benavides v. State Farm Gen. Ins., 39 Cal. Rptr. 3d 650,

655–56 (Ct. App. 2006). However, because Piveg violated the NVP provision of

the contract, General Star owed Piveg no benefits under the policy.

      AFFIRMED.

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