Court Opinion

ID: 859347
Source: CourtListenerOpinion
Date Created: 2013-04-26 20:05:44.756894+00
Date Added: 2024-06-11T15:06:37.858928
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                APR 26 2013

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

                            FOR THE NINTH CIRCUIT

TICKETMASTER, LLC, a Virginia                    No. 11-56285
Company,
                                                 D.C. No. 2:11-cv-02110-PA-JCG
              Plaintiff - Appellant,

  v.                                             MEMORANDUM*

ILLINOIS UNION INSURANCE
COMPANY, an Illinois Company,

              Defendant - Appellee.

                   Appeal from the United States District Court
                      for the Central District of California
                    Percy Anderson, District Judge, Presiding

                       Argued and Submitted April 11, 2013
                              Pasadena, California

Before: BERZON, TALLMAN, and M. SMITH, Circuit Judges.

       Plaintiff-Appellant Ticketmaster, LLC (Ticketmaster) appeals the district

court’s judgment on the pleadings in favor of Defendant-Appellee Illinois Union

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Insurance Company (Illinois Union). We have jurisdiction under 28 U.S.C. §

1291, and we reverse the district court’s judgment.

      Ticketmaster, which sells event tickets online, obtained an Errors and

Omissions Liability Insurance Policy (the Policy) from Illinois Union that provided

liability coverage arising from the performance or failure to perform its

professional services for the period from October 1, 2003 to October 1, 2004. The

Policy obligates Illinois Union to defend Ticketmaster against any covered claim.

The Policy also contains 28 exclusionary provisions, including Exclusion E, which

states that the Policy does not apply to any claim “based on or arising out of . . .

any dispute involving fees, expenses or costs paid to or charged by the Insured.”

On October 21, 2003, certain ticket purchasers filed a putative class action against

Ticketmaster in Los Angeles Superior Court (Schlesinger v. Ticketmaster, Case

No. BC 304565 (Schlesinger action)). In the Schlesinger action, the class alleged,

among other claims, that Ticketmaster made false representations regarding UPS

delivery fees and order-processing charges for event tickets. Ticketmaster

demanded that Illinois Union defend it in the Schlesinger action. When Illinois

Union refused, citing Exclusion E, Ticketmaster sued Illinois Union for breach of

contract and bad faith. Illinois Union moved for judgment on the pleadings, which

the district court granted.

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      We review de novo a dismissal under Federal Rule of Civil Procedure 12(c).

United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1053

(9th Cir. 2011). “Under California law, the interpretation of an exclusionary clause

is an issue of law upon which the court must make its own independent

determination.” Cont’l Cas. Co. v. City of Richmond, 763 F.2d 1076, 1079 (9th

Cir. 1985).

      The district court erred in dismissing Ticketmaster’s breach of contract

claim by failing to subject Exclusion E to the “closest possible scrutiny.” Haynes

v. Farmers Ins. Exch., 89 P.3d 381, 391 (Cal. 2004) (citation and quotes omitted).

When narrowly construed in favor of Ticketmaster, MacKinnon v. Truck Insurance

Exchange, 73 P.3d 1205, 1213 (Cal. 2003), Exclusion E is reasonably susceptible

to at least two meanings, particularly in light of the Policy’s other 27 exclusions,

and is thus, ambiguous: (i) Exclusion E may refer narrowly to a dispute regarding

the monetary amount paid to or charged by Ticketmaster for uncontested services,

or (ii) more generally, Exclusion E may refer to any dispute regarding a fee or

charge for professional services, including a dispute regarding the relationship

between services provided and the fees charged. See Palmer v. Truck Ins. Exch.,

988 P.2d 568, 573 (Cal. 1999). Illinois Union failed to satisfy its burden of

showing that (ii), its interpretation of Exclusion E, is the only reasonable one.

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MacKinnon, 73 P.3d at 1218. There are at least some allegations in the

Schlesinger action that do not involve the amount charged for uncontested

services. For example, the allegation that Ticketmaster performed no services in

exchange for its order-processing charge does not dispute the amount charged, but

the relationship between any fee at all and the services provided. That dispute, at

least, is within interpretation (ii), but not interpretation (i), of Exclusion E.

       Whether the district court erred in denying Ticketmaster additional time to

develop extrinsic evidence is now moot given that we are reversing and remanding

this case for reconsideration of the breach of contract claim and the proper

interpretation of Policy Exclusion E. Ticketmaster will necessarily have additional

time to develop and present extrinsic evidence on remand. Similarly, Ticketmaster

will also be free to relitigate the previously dismissed bad faith claim since there is

now a potentially viable breach of contract claim.

       Accordingly, the district court’s judgment is reversed, and the case is

remanded for reinstatement of the complaint and further proceedings.

       REVERSED and REMANDED.

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