Court Opinion

ID: 899933
Source: CourtListenerOpinion
Date Created: 2013-06-12 20:08:14.255804+00
Date Added: 2024-06-11T12:38:50.369241
License: Public Domain

FILED
                               NOT FOR PUBLICATION                                        JUN 12 2013

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

                                FOR THE NINTH CIRCUIT

 ESPARZA ENTERPRISES, INC. and                          No. 11-17110
 LUIS ESPARZA,
                                                        D.C. No. 1:10-cv-1079-LJO-JLT
                 Plaintiffs - Appellants,

   v.                                                   MEMORANDUM*

 BURLINGTON INSURANCE CO.,

                 Defendant - Appellee.

                      Appeal from the United States District Court
                          for the Eastern District of California
                      Lawrence J. O’Neill, District Judge, Presiding

                           Argued and Submitted May 17, 2013
                                San Francisco, California

Before:          CLIFTON and BEA, Circuit Judges, and KORMAN, Senior District
               Judge.**

        Esparza Enterprises, a farm labor contractor, and its owner Luis Esparza

(collectively “Esparza”) assert that Burlington Insurance Company (“Burlington”),

          *
              This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
          **
               The Honorable Edward R. Korman, Senior United States District Judge for the
Eastern District of New York, sitting by designation.

                                                1
Esparza Enterprises’s general liability insurance carrier, wrongfully refused to defend

and to indemnify Esparza for liability arising from the death of an Esparza employee.

The district court granted summary judgment to Burlington on Esparza’s claims for

breach of contract and breach of the implied covenant of good faith and fair dealing,

finding that three separate provisions in the Burlington policy at issue excluded the

underlying claim from coverage. We agree with the district court that the Burlington

policy’s employer’s liability exclusion and contractual liability exclusion preclude

coverage for the underlying action. We do not reach the question whether the

automobile exception applies under the circumstances of this case.

      Tellingly, Esparza does not argue that the plain meaning of the employer’s

liability exclusion and the contractual liability exclusion are ineffective to deny

coverage for defense and indemnity. Instead, Esparza, who purchased the policy with

the assistance of a broker, argues that the relevant policy provisions and amendments

incorporating the pertinent exclusions were inconspicuous and inconsistent with the

expectations of a reasonable insured. However, under California law, the expectations

of the parties to an insurance contract are relevant only when the contract language

itself is ambiguous. See In re K F Dairies, Inc. & Affiliates v. Fireman’s Fund Ins.,

224 F.3d 922, 925-26 (9th Cir. 2000). Moreover, the relevant provisions, which were

listed at the beginning of the policy, accurately titled, and identified in large type, do

                                            2
not qualify as “inconspicuous” under California precedent. See Merrill & Seeley, Inc.

v. Admiral Ins. Co., 225 Cal. App. 3d 624, 630-31 (1990) (“Courts have invalidated

exclusions under the conspicuous requirement where (1) they are not included under

the exclusion section and are placed on an overcrowded page; (2) they are included

in a ‘General Limitations’ section but in a dense pack format; or (3) they are hidden

in fine print in a policy section bearing no clear relationship to the insuring clause.”).

“An insurance company has the right to limit the coverage of a policy issued by it and

when it has done so, the plain language of the limitation must be respected.” Nat’l

Ins. Underwriters v. Carter, 17 Cal. 3d 380, 384 (1976) (internal quotation marks

omitted).

      AFFIRMED.

                                            3