Court Opinion

ID: 4418137
Source: CourtListenerOpinion
Date Created: 2019-07-18 20:00:33.020102+00
Date Added: 2024-06-11T08:48:38.336805
License: Public Domain

NOT FOR PUBLICATION                              FILED
                     UNITED STATES COURT OF APPEALS                           JUL 18 2019
                                                                         MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

BRADLEY STEPHEN COHEN; COHEN                      No.    17-16960
ASSET MANAGEMENT, INC.,
                                                  D.C. No.
                 Plaintiffs-Appellants,           2:17-cv-00057-GMN-GWF

  v.
                                                  MEMORANDUM*
BERKLEY NATIONAL INSURANCE
COMPANY,

                 Defendant-Appellee.

                    Appeal from the United States District Court
                             for the District of Nevada
                    Gloria M. Navarro, District Judge, Presiding

                         Argued and Submitted July 8, 2019
                               Seattle, Washington

Before:     WATFORD and MILLER, Circuit Judges, and BENITEZ,** District
Judge.

       Bradley S. Cohen and Cohen Asset Management, Inc. (“CAM”) appeal the

district court’s dismissal for failure to state a claim of their diversity insurance

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
            The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
coverage action against Berkley National Insurance Co., alleging breach of

contract under Nevada law in Berkley’s refusal to indemnify a federal defamation

judgment that Cohen and CAM obtained against Berkley’s insured. We have

jurisdiction under 28 U.S.C. § 1291. We review de novo, see Los Angeles Lakers,

Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017), and we affirm.

      The district court properly ruled that Cohen and CAM failed to state a claim

for breach of contract. See Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522,

526 (9th Cir. 2008) (dismissal is proper if it appears beyond doubt that plaintiffs

can prove no set of facts that would entitle them to relief). Two Berkley policies

insured Northwest Territorial Mint, LLC, against liability for damages for

“personal and advertising injury.” The district court correctly concluded that

policy exclusions for “knowing violation of the rights of another” and for “material

published with knowledge of its falsity” were unambiguous and required that the

insured acted with knowledge. See Century Sur. Co. v. Casino West, Inc., 329

P.3d 614, 616 (Nev. 2014) (setting forth standard for preclusion of coverage under

a policy exclusion). Further, considering the underlying complaint and the verdict

and judgment, which found that the conduct of Northwest and other defendants

amounted to fraud, the “knowledge of falsity” exclusion plainly applied. See

Northstar Fin. Advisors, Inc. v. Schwab Invs., 779 F.3d 1036, 1042-43 (9th Cir.

2015) (documents that are incorporated into the complaint or that form the basis of

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plaintiffs’ claim may be considered part of the pleading); Century, 329 P.3d at

616.1 The punitive damages award against Northwest was covered by the

exclusion because the jury and the district court awarded punitive damages

specifically against Northwest, and Cohen and CAM are not entitled to

indemnification of compensatory damages because the jury and district court did

not distinguish between compensatory and punitive damages in finding that

Northwest and the other defendants’ conduct amounted to fraud, oppression, and

malice.

      The district court did not abuse its discretion in dismissing without leave to

amend. See Rentmeester v. Nike, Inc., 883 F.3d 1111, 1125 (9th Cir. 2018) (no

abuse of discretion in dismissing with prejudice when amendment would be futile).

      We deny appellee’s motion for judicial notice of documents not attached to

the complaint and not part of the record before the district court (Docket Entry No.

31). Appellants’ motion to strike portions of the answering brief (Docket Entry

No. 35) is denied.

      AFFIRMED.

1
  Cohen and CAM asserted for the first time at oral argument that the jury
instructions given at trial render it unclear whether the jury found that Northwest
itself engaged in knowing and intentional conduct sufficient to trigger the
exclusions. We decline to address this argument as Cohen and CAM failed to
preserve it below or adequately develop it in their briefs on appeal.

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