Court Opinion

ID: 178982
Source: CourtListenerOpinion
Date Created: 2010-11-09 01:02:56+00
Date Added: 2024-06-11T17:25:46.752691
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             NOV 08 2010

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

MIRLAN, DBA Vinyard Valley Center,               No. 09-55662

              Plaintiff - Appellant,             D.C. No. 5:08-cv-00119-VAP

  v.
                                                 MEMORANDUM *
AFFILIATED FM INSURANCE
COMPANY, a Corporation,

              Defendant - Appellee,

  and

AXIS SPECIALTY US SERVICES, INC.,
a Corporation,

              Defendant.

                   Appeal from the United States District Court
                       for the Central District of California
                   Virginia A. Phillips, District Judge, Presiding

                     Argued and Submitted November 1, 2010
                              Pasadena, California

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

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Plaintiff-Appellant Mirlan appeals the district court’s denial of its motion for

summary judgment and grant of summary judgment in favor of Defendant-

Appellee Affiliated FM Insurance Company. We have jurisdiction under 28

U.S.C. § 1291. As the facts and procedural history are familiar to the parties, we

do not recite them here except as necessary to explain our disposition. We affirm.

      In an action on an insurance policy, “it is well settled that ‘[t]he burden is on

an insured to establish that the [event] forming the basis of its claim is within the

basic scope of insurance coverage .’” Dart Inds., Inc. v. Commercial Union Ins.

Co., 52 P.3d 79, 87 (Cal. 2002). Here, the insurance policies cover “the actual loss

of income sustained by the insured resulting directly from the necessary

untenantability, caused by loss, damage or destruction by any of the perils covered

herein . . . to real or personal property.” Mirlan must therefore show that its losses

resulted directly from the necessary untenantability caused by the fire, rather than

its own conduct after the fire.

      After the fire rendered three tenant spaces untenantable, Mirlan represented

to its tenants that they would not have to continue paying rent. However, Mirlan’s

tenant leases provided that the tenants were required to continue paying rent even

if fire made the spaces untenantable or there were repairs made to the property.

The leases also required the tenants to purchase business interruption insurance.

                                           2
Based on these provisions, Mirlan’s tenants would have been required to continue

paying rent but for Mirlan’s own representations that they had no obligation to do

so. Because there is no evidence in the record that Mirlan would have incurred

rental income losses after the fire, Mirlan does not meet its burden to show that its

claim falls within the scope of insurance coverage. Because this issue is

dispositive, we do not reach the remaining issues.

      AFFIRMED.

                                          3