Court Opinion

ID: 2805137
Source: CourtListenerOpinion
Date Created: 2015-06-02 20:01:31.243505+00
Date Added: 2024-06-11T12:04:12.554486
License: Public Domain

FILED
                            NOT FOR PUBLICATION                                JUN 02 2015

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

                           FOR THE NINTH CIRCUIT

DARYL GREGORY; SHIRLEY                           No. 13-15161
GREGORY,
                                                 D.C. No. 2:10-cv-01872-KJM-
               Plaintiffs - Appellants,          EFB

 v.
                                                 MEMORANDUM*
NATIONWIDE MUTUAL
INSURANCE COMPANY; ALLIED
PROPERTY & CASUALTY
INSURANCE COMPANY,

               Defendants - Appellees.

                    Appeal from the United States District Court
                       for the Eastern District of California
                    Kimberly J. Mueller, District Judge, Presiding

                              Submitted May 13, 2015**
                               San Francisco, California

Before:        KOZINSKI, PAEZ and CLIFTON, Circuit Judges.

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
          **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
                                                                                page 2
      1. The policy excludes coverage for loss from “[n]esting or infestation, or

discharge or release of waste products or secretions by birds, vermin, rodents,

insects or domestic animals.” Mites are the paradigmatic example of “vermin.”

See Webster’s Third New International Dictionary 2544 (2002) (defining “vermin”

as “small animals (as lice, bedbugs, mice) that tend to occur in great numbers, are

difficult to control, and are offensive as well as injurious”); see also Merriam-

Webster’s Collegiate Dictionary 1390 (11th ed. 2005) (“small common harmful or

objectionable animals (as lice or fleas) that are difficult to control”); XIX The

Oxford English Dictionary 547 (2d ed. 1989) (“creeping or wingless insects (and

other minute animals) of a loathsome or offensive appearance or character, esp.

those which infest or are parasitic on living beings and plants”). Nothing in the

policy suggests we should depart from the “ordinary sense” of the term that we

ascertain from its dictionary definition. See Scott v. Continental Ins. Co., 51 Cal.

Rptr. 2d 566, 569–70 (Ct. App. 1996). Moreover, considering the context of the

“vermin” exclusion—a broad exclusion of loss caused by the “[n]esting or

infestation” of several types of animals including “insects”—plaintiffs could not

have reasonably construed the policy to insure against mite damage. See Blasiar,

Inc. v. Fireman’s Fund Ins. Co., 90 Cal. Rptr. 2d 374, 379 (Ct. App. 1999).
                                                                                page 3
      Plaintiffs argue that “the term ‘vermin’ does not form a proper basis for a

policy exclusion” because it’s “legally ambiguous.” They rely on out-of-state

decisions which found that the term “vermin” was ambiguous and resolved the

ambiguity in favor of the insured. See Sincoff v. Liberty Mut. Fire Ins. Co., 183
N.E.2d 899, 901–02 (N.Y. 1962) (carpet beetles); Jones v. Am. Econ. Ins. Co., 672
S.W.2d 879, 880–81 (Tex. App. 1984) (squirrels). But, even if the “vermin”

exclusion may be ambiguous as to whether it applies to certain animals, it isn’t

ambiguous “in the context of this policy and the circumstances of this case.”

E.M.M.I. Inc. v. Zurich Am. Ins. Co., 84 P.3d 385, 389 (Cal. 2004); see also

Blasiar, 90 Cal. Rptr. 2d at 378–79. Because the only damage claimed by plaintiffs

is excluded, their breach of contract claim fails.

      2. Plaintiffs also claim that defendants breached the implied covenant of

good faith and fair dealing because they (1) didn’t conduct any investigation of the

alleged infestation and (2) denied coverage based on fungus or decay without

investigating whether any fungus or decay occurred. But damage from mites is

excluded from coverage, and plaintiffs have never claimed that any damage from

fungus occurred. Because plaintiffs can’t show “that benefits were due under the

policy,” their bad faith claim fails. Benavides v. State Farm Gen. Ins. Co., 39 Cal.
                                                                                  page 4
Rptr. 3d 650, 655–56 (Ct. App. 2006); see also Love v. Fire Ins. Exch., 271 Cal.

Rptr. 246, 255–56 (Ct. App. 1990).

      3. In the district court, plaintiffs argued that summary judgment was

inappropriate because defendants failed to comply with their discovery obligations.

The district court rejected this argument on the ground that plaintiffs did not

“describe what facts [they] hope[d] to elicit” from additional discovery. Because

plaintiffs don’t “specifically and distinctly argue[]” this point on appeal, any claim

of error is waived. See Miller v. Fairchild Indus., Inc., 797 F.2d 727, 738 (9th Cir.

1986).

      4. Defendants’ motion to strike portions of plaintiffs’ excerpts of record is

denied as moot.

      AFFIRMED.