NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 14 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FEDERAL INSURANCE COMPANY, No. 15-56701
Plaintiff-Appellee, D.C. No.
2:15-cv-00393-SVW-PJW
v.
AMERICAN MEDICAL SYSTEMS, INC., MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Submitted December 9, 2016**
Pasadena, California
Before: PREGERSON, NGUYEN, and OWENS, Circuit Judges.
American Medical Systems, Inc. (“AMS”) appeals the district court’s order
granting Federal Insurance Company (“Federal”) summary judgment. The district
court concluded that Federal had no duty to defend AMS because AMS was not
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
insured under the policy issued to Caldera Medical, Inc. (“Caldera”). We have
jurisdiction under 28 U.S.C. § 1291 and Federal Rule of Civil Procedure 54(b).
Reviewing de novo, see Michelman v. Lincoln Nat’l Life Ins. Co., 685 F.3d 887,
892 (9th Cir. 2012), we affirm.
Whether a contractual duty to defend applies in a given situation “requires
interpretation of the insurance policy.” Alex Robertson Co. v. Imperial Cas. &
Indem. Co., 10 Cal. Rptr. 2d 165, 167 (Ct. App. 1992). Because AMS is not a
party to the insurance contract between Caldera and Federal, whatever rights it has
are those of a third party beneficiary. Garcia v. Truck Ins. Exch., 682 P.2d 1100,
1104 (Cal. 1984). The burden is on AMS, the third party seeking performance, to
prove that Caldera and Federal, the contracting parties, intended the policy for its
benefit. See id. at 1104-05.
If possible, the contracting parties’ intent should be inferred “solely from the
written provisions of the contract.” Crown Capital Sec., L.P. v. Endurance Am.
Specialty Ins. Co., 186 Cal. Rptr. 3d 1, 5 (Ct. App. 2015). When “clear and
explicit,” the contractual language governs. Id. “Uncertainties in the terms of
coverage are resolved in favor of the insured,” but “expectations of coverage must
be reasonable in light of the plain language of the policy.” Alex Robertson Co., 10
2
Cal. Rptr. 2d at 167-68. In determining whether an insurance policy provides for a
defense, courts look to the reasonable coverage expectations of the named insured,
“not the reasonable expectations of someone claiming to be an additional insured
thereunder.” Wint v. Fid. & Cas. Co., 507 P.2d 1383, 1388 (Cal. 1973).
Although it is true that “the carrier must defend a suit which potentially
seeks damages within the coverage of the policy,” Gray v. Zurich Ins. Co., 419
P.2d 168, 176 (Cal. 1966), whether AMS is entitled to a defense under the policy
depends, as a preliminary matter, on whether it is entitled to enforce the policy at
all. See Chicken Delight of Cal., Inc. v. State Farm Mut. Auto. Ins. Co., 111 Cal.
Rptr. 79, 83 (Ct. App. 1973) (concluding that the party seeking coverage “was
neither a named nor an additional insured on the . . . policy,” making it
“unnecessary to consider” application of “the basic rule that the duty to defend
arises when the insurer ‘ascertains facts which give rise to the potential of liability
under the policy’” (citation and ellipsis omitted)); see also id. at 92 (Stephens, J.,
concurring) (“Clearly, one rule to be drawn from Wint is that the Gray duty to
defend does not arise automatically upon the filing of a complaint that alleges facts
which, if true, would cause a defendant who was allegedly an unnamed insured to
fall within some policy’s definition of an additional insured.” (footnote omitted));
3
cf. Gray, 419 P.2d at 176 (“[W]e should hardly designate the third party [plaintiff]
as the arbiter of the policy’s coverage.”).
Caldera’s insurance policy unambiguously did not cover AMS. Caldera was
not a joint venture of which AMS was a member, and AMS was not a “vendor”
because it did not sell or distribute Caldera’s products. The district court correctly
concluded that AMS was not an insured under Caldera’s policy without resort to
the allegations against AMS in the underlying tort litigation. Consequently, we
need not address Federal’s alternative ground for summary judgment that AMS fell
into the policy exclusion for “organization[s] . . . from whom you have acquired
your product.”
AFFIRMED.
4