Court Opinion

ID: 3206882
Source: CourtListenerOpinion
Date Created: 2016-05-25 20:00:56.658123+00
Date Added: 2024-06-11T12:27:31.873314
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAY 25 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

BRYAN GRIGGS; VALERIE GRIGGS,                    No. 13-35282
husband and wife,
                                                 D.C. No. 3:12 cv-00463 MO
              Plaintiffs - Appellants,

 v.                                              MEMORANDUM*

ALLSTATE INSURANCE COMPANY,

              Defendant - Appellee.

                   Appeal from the United States District Court
                            for the District of Oregon
                Michael W. Mosman, Chief District Judge, Presiding

                        Argued and Submitted May 6, 2016
                                Portland, Oregon

Before:       TASHIMA, TALLMAN, and HURWITZ, Circuit Judges.

      Plaintiffs Bryan and Valerie Griggs appeal the district court’s order granting

summary judgment to Defendant Allstate Insurance Company (“Allstate”). We

have jurisdiction under 28 U.S.C. § 1291, and we affirm.

          *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                          I.

      From June 2010 to June 2011, Plaintiffs maintained a Renters Insurance

Policy (“Policy”) with Allstate. While the Policy provided protection against

unauthorized use of a credit card, it also contained an exclusion for any “loss

arising from any business of an insured person.”

      Between June 2009 and November 2010, Bryan Griggs was employed as the

Chief Financial Officer of HDMC Group LLC (“HDMC”). HDMC and Advanced

Travel Systems, Inc. (“ATS”) purchase hotel rooms in bulk and then resell them,

typically to attendees of conventions and tradeshows. To reserve the hotel rooms,

HDMC and ATS place a credit card on file with the vendor. HDMC and ATS

maintain various company credit cards for this purpose, but the daily credit limit

on these cards is not always sufficient to cover all of the charges they wish to

incur. Thus, Griggs agreed to allow HDMC to use his personal American Express

card to reserve some hotel rooms. Griggs authorized each transaction on a

case-by-case basis, and HDMC agreed to reimburse Griggs for any charges.

      In September 2010, Griggs noticed that his credit card statement contained

transactions that he did not recall authorizing HDMC to make. Griggs disputed the

charges and informed HDMC that it could no longer use his card. A few months

                                          2
later, HDMC terminated Griggs’s employment. Griggs alleges that HDMC

continued to make unauthorized charges on his credit card after he was fired.

      In January 2011, ATS and HDMC sued Plaintiffs in Nevada state court,

alleging that Griggs wrongfully disputed charges that he had authorized and for

which he had been reimbursed. Plaintiffs twice tendered the defense of the state

court action to Allstate. Allstate denied coverage and declined to provide a

defense.

      In response, Plaintiffs filed this federal action, seeking damages and a

declaration that Allstate owed Plaintiffs a duty to defend the state court action.

The district court granted Allstate’s motion for summary judgment, concluding that

the business exclusion clause applied. Plaintiffs appeal.

                                          II.

      We review de novo a grant of summary judgment on an insurer’s duty to

defend. Ind. Lumbermens Mut. Ins. Co. v. W. Or. Wood Prods., Inc., 268 F.3d 639,

643 (9th Cir. 2001). “Viewing the evidence in the light most favorable to the

nonmoving party, we must decide whether there are any genuine issues of material

fact and whether the district court correctly applied the pertinent substantive law.”

Id. a 644 (citation omitted).

                                          III.

                                           3
      “Under Oregon law, a court assesses an insurer’s duty to defend an action

against its insured by reviewing the complaint and the insurance policy.” Id.

(citing Ledford v. Gutoski, 877 P.2d 80, 82 (Or. 1994) (en banc)). “In evaluating

whether an insurer has a duty to defend, the court looks only at the facts alleged in

the complaint to determine whether they provide a basis for recovery that could be

covered by the policy.” Ledford, 877 P.2d at 82. “The insurer has a duty to

defend if the complaint provides any basis for which the insurer provides

coverage.” Id. at 83.

      The district court correctly concluded that Allstate did not have a duty to

defend under Oregon law. The Policy expressly excludes coverage for credit card

losses “arising from any business of an insured person.” In the context of

insurance policies, Oregon courts have broadly construed the phrase “arising out

of” to indicate “a causal connection, rather than a proximate causal connection.”

Ristine v. Hartford Ins. Co. of Midwest, 97 P.3d 1206, 1208 (Or. Ct. App. 2004)

(citation omitted); see also Oakridge Cmty. Ambulance Serv., Inc. v. U.S. Fid. &

Guar. Co., 563 P.2d 164, 166–67 (Or. 1977) (en banc). The Policy defines

“business” as “any full or part-time activity of any kind engaged in for economic

gain.” Although the Policy does not further define “economic gain,” Plaintiffs

                                          4
concede that a principal form of economic gain recognized in the case law is salary

or compensation earned through employment.

       the state court complaint alleges that Plaintiffs’ claimed credit card losses

arose from Griggs’ employment at HDMC. Those allegations fall squarely within

the Policy’s business exclusion clause. That complaint also alleges that Griggs

was employed full-time as the CFO of HDMC. The complaint explains that

HDMC and ATS are hotel room wholesalers that, “[a]s part of their normal course

of doing business,” place a credit card on file with the vendor to reserve hotel

rooms. Further, it also alleges that, at Griggs’ suggestion, HDMC and ATS used

Griggs’s “personal American Express card to make payment due from HDMC or

ATS to various hotel and travel wholesalers, as those vendors required immediate

payment by credit card for rooms being purchased by HDMC.”

      Plaintiffs were sued, in the Nevada state court action, in connection with acts

Griggs took in furtherance of a for-profit venture. Any losses Griggs sustained

from HDMC’s unauthorized use of Griggs’s credit card arose from – that is, were

causally connected to – his full-time, paid employment at HDMC.

      Because the Policy’s business exclusion provision precludes coverage, the

district court did not err in granting summary judgment in favor of Allstate.

      AFFIRMED.

                                           5