Court Opinion

ID: 4296410
Source: CourtListenerOpinion
Date Created: 2018-07-20 20:00:29.89424+00
Date Added: 2024-06-11T13:25:20.023659
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             JUL 20 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ASSOCIATION OF APARTMENT                         No.   16-16666
OWNERS OF THE MOORINGS, INC.,
                                                 DC No. 15-0497 BMK
              Plaintiff-Appellee,

 v.                                              MEMORANDUM*

DONGBU INSURANCE CO., LTD., a
Republic of Korea Corporation,

              Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Hawaii
                   Barry M. Kurren, Magistrate Judge, Presiding

                        Argued and Submitted June 12, 2018
                                Honolulu, Hawaii

Before:      TASHIMA, W. FLETCHER, and HURWITZ, Circuit Judges.

      Defendant-Appellant Dongbu Insurance Co., Ltd. (“Dongbu”) appeals the

district court’s judgment in favor of Plaintiff-Appellee Association of Apartment

Owners of the Moorings, Inc. (“Moorings”). On cross-motions for summary

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
judgment, the district court concluded that Dongbu was required to indemnify

Moorings for an award of attorney’s fees that an arbitrator ordered Moorings to

pay to Jo-Anne and Brent Braden (the “Bradens”) in connection with the Bradens

prevailing on a claim that their condominium unit incurred water damage due to a

leaking lanai roof. We have jurisdiction under 28 U.S.C. § 1291. Reviewing de

novo, Guatay Christian Fellowship v. County of San Diego, 670 F.3d 957, 970 (9th

Cir. 2011), we affirm.

      Dongbu was obligated to reimburse those sums that Moorings became

legally obligated to pay as damages because of covered property damage. It is

undisputed that Moorings became legally obligated to pay the Bradens’ attorney’s

fees once the state court confirmed the arbitration award. Further, the water

damage to the Bradens’ home constitutes covered property damage under the

policy, as Dongbu conceded below. Dongbu’s reliance on cases where there was

no covered property damage is thus unfounded.

      The policy does not define “damages,” but in other contexts Hawaii has

noted that “an award of . . . fees to a prevailing party is inherently in the nature of a

damage award.” Fought & Co. v. Steel Eng’g & Erection, Inc., 951 P.2d 487, 501

(Haw. 1998). Contrary to Dongbu’s assertions, Hawaii has recognized that an

award of fees is “in the nature of damages” outside the context where fees are

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awarded under the rule announced in Uyemura v. Wick, 551 P.2d 171, 176 (Haw.

1976). See, e.g., Nelson v. Hawaiian Homes Comm’n, 307 P.3d 142, 148–49 & n.4

(Haw. 2013). Whether the fees here are Uyemura fees is therefore inconsequential.

Moreover, in the context of the policy, the plain meaning of “damages”

encompasses the fees the Bradens incurred to vindicate their claim for water

damage to their home, even if those fees are not a measure of that physical damage.

The fees awarded to the Bradens as the prevailing party thus fall within the

meaning of “damages” under the policy.

      That the fees were awarded in connection with the Bradens’ status as a

prevailing party does not bring them outside the policy’s coverage. The policy

provides coverage for damages Moorings must pay “because of” covered property

damage. This phrase, which is undefined, connotes a non-exacting causation

requirement whereby any award of damages that flows from covered property

damage is covered, unless otherwise excluded. Cf. C. Brewer & Co. v. Marine

Indem. Ins. Co. of Am., 347 P.3d 163, 166 (Haw. 2015). The Bradens were

awarded fees, likely under Haw. Rev. Stat. § 514B-162(e), because their home

incurred water damage, and they incurred additional loss in order to recover for

this damage. The fee award is thus properly considered an award of damages that

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Moorings must pay “because of” that covered property damage and is not

otherwise excluded.

      At the least, examining the relevant language in the context of the policy as a

whole makes clear that Moorings’ interpretation is a reasonable one, meaning any

ambiguity must be resolved in favor of coverage. See Allstate Ins. Co. v. Pruett,

186 P.3d 609, 614 (Haw. 2008).

      AFFIRMED.

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