Court Opinion

ID: 819767
Source: CourtListenerOpinion
Date Created: 2013-02-05 21:28:07.808264+00
Date Added: 2024-06-11T09:03:00.647794
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              FEB 05 2013

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

                            FOR THE NINTH CIRCUIT

GENESIS INSURANCE COMPANY,                       No. 11-15800

       Plaintiff-Counterclaim Defendant -        D.C. No. 5:06-cv-05526-JW
       Appellee,

  v.
                                                 MEMORANDUM *
MAGMA DESIGN AUTOMATION,
INC.,

       Defendant-Counterclaim/Third-
       party Plaintiff - Appellee,

  v.

NATIONAL UNION FIRE INSURANCE
COMPANY, of Pittsburgh, PA,

       Third-party Defendant - Appellant,

and

EXECUTIVE RISK INDEMNITY, INC.,

       Third-party Defendant.

       *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                   Appeal from the United States District Court
                     for the Northern District of California
                     James Ware, District Judge, Presiding

                     Argued and Submitted December 7, 2012
                            San Francisco, California

Before: TROTT and RAWLINSON, Circuit Judges, and BLOCK, District Judge.**

      The district court held that Genesis Insurance Company (“Genesis”) was

entitled to coverage under a policy issued by National Union Fire Insurance

Company (“National Union”) as the equitable subrogee of Magma Design

Automation, Inc. (“Magma”). National Union timely appealed the resulting partial

judgment in favor of Genesis. Because the district court certified its judgment

under Federal Rule of Civil Procedure 54(b), we have jurisdiction. We hold as

follows:

      1.     National Union’s policy excluded coverage for any claim “based

upon, arising from, or in consequence of any fact, circumstance, situation,

transaction, event or Wrongful Act” that had been “the subject of any notice given

under any policy” for which National Union’s policy was “a direct or indirect

renewal or replacement.” In context, it is reasonable to interpret “under” to mean

“according to.” See Black’s Law Dictionary 1525 (6th ed. 1990); see also ACS

       **
         The Honorable Frederic Block, Senior United States District Judge for the
Eastern District of New York, sitting by designation.

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Sys., Inc. v. St. Paul Fire and Marine Ins. Co., 147 Cal. App. 4th 137, 146 (2007)

(explaining that policy terms are generally to be interpreted in “their ordinary and

popular sense”) (internal quotation marks omitted).

      We previously held that Magma’s notice to Genesis did not comply with the

notice provision of Genesis’s policy. See Genesis Ins. Co. v. Magma Design

Automation, Inc., 386 F. App’x 728, 730 (9th Cir. 2010). It follows that notice was

not given “under” that policy. Therefore, the exclusion does not apply.

      2.     Coverage under National Union’s policy was contingent on

exhaustion of the primary coverage provided by Executive Risk Indemnity, Inc.

(“ERII”), for the 2004-06 policy period. ERII, however, treated the 2005 lawsuits

as claims under Magma’s 2003-04 policy. ERII’s statement that it would “adjust

its records” to reflect exhaustion of the 2004-06 policy was explicitly contingent

on a judicial determination that its decision was incorrect.

      There has been no such determination. Our prior decision dealt only with

notice to Genesis. ERII, by contrast, accepted Magma’s notice as adequate.

Because Genesis failed to establish that ERII’s 2004-06 policy had, as a matter of

law, been exhausted, we reverse the district court’s partial summary judgment.

      3.     Our disposition revives National Union’s motion to dismiss on other

grounds, which the district court denied as moot. We leave it to the district court to

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address the merits of that motion on remand. Should it deny the motion, it must

then determine whether ERII correctly treated the patent-infringement complaint as

notice of circumstances that could give rise to a covered claim under its policy.

      REVERSED and REMANDED with instructions.

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