FILED
NOT FOR PUBLICATION
OCT 23 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
POCO, LLC, a Washington Limited No. 16-35310
Liability Company,
D.C. No. 4:14-cv-05106-SAB
Plaintiff-Appellant,
v. MEMORANDUM*
FARMERS CROP INSURANCE
ALLIANCE, INC., a corporation
registered to do business in Washington,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Stanley Allen Bastian, District Judge, Presiding
Argued and Submitted October 10, 2017
Gonzaga University, Spokane, Washington
Before: GRABER, PAEZ, and CLIFTON, Circuit Judges.
POCO, LLC appeals the district court’s order granting summary judgment to
Farmers Crop Insurance Alliance (“FCIA”) on POCO’s claims for breach of
contract, misrepresentation, and violation of the Washington Consumer Protection
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Act (“CPA”). We review de novo the district court’s order granting summary
judgment. Suzuki Motor Corp. v. Consumers Union of U.S., Inc., 330 F.3d 1110,
1131–32 (9th Cir. 2003). We have jurisdiction under 28 U.S.C. § 1291, and we
affirm.
1. The district court did not err in rejecting POCO’s breach of contract claim.
The Mutual Release provides that FCIA, “for itself and for its insurance
companies, . . . parent companies, [and] related companies” releases POCO from
liability for claims arising out of POCO’s claim for indemnity under the 2003 crop
insurance policies issued by FCIA. POCO argues that “its insurance companies”
includes the Federal Crop Insurance Company and therefore the federal
government. We disagree.
Washington follows the “objective manifestation” theory of contract
interpretation. See Hearst Commc’ns, Inc. v. Seattle Times Co., 115 P.3d 262, 267
(Wash. 2005). Courts impute an intention corresponding to the reasonable
meaning of the words used. Oliver v. Flow Int’l Corp., 155 P.3d 140, 142 (Wash.
Ct. App. 2006). The words “its insurance companies” cannot reasonably be
interpreted to bind the federal government and prevent the Department of Justice
from pursing a criminal prosecution against POCO for events related to the 2003
policies. Furthermore, the subject matter of the General Release covers only
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“claims against each other arising out of POCO’s claim for indemnity under its
2003 federally-reinsured Multiple Peril Crop Insurance (MCPI) and Adjusted
Gross Revenue (AGR) policies, and Farmer Alliance’s handling and adjustment of
said claims.” The limited scope of the Release cannot be reasonably read to
encompass the criminal charges filed against POCO, which dealt with inflating
crop baseline prices to increase eventual payouts on numerous insurance policies.
We therefore affirm the district court’s grant of summary judgment on the breach
of contract claim.
2. POCO additionally alleges misrepresentation of a material fact. See ESCA
Corp. v. KPMG Peat Marwick, 959 P.2d 651, 654 (Wash. 1998) (quoting
Restatement (Second) of Torts § 552(1) (1977)). “A precondition for finding
liability [for misrepresentation] is knowledge of the facts alleged to have been
concealed or not disclosed.” Pope v. Univ. of Wash., 852 P.2d 1055, 1063 (Wash.
1993), as amended by 871 P.2d 590 (Wash. 1994). Here, POCO has failed to
demonstrate a genuine factual dispute whether FCIA knew that POCO was under a
criminal investigation. POCO’s evidence in support of that proposition stems from
a 2004 insurance policy, rather than the 2003 insurance policy at issue in this case.
Furthermore, to recover for misrepresentation, a plaintiff must prove reasonable
reliance on the purported misrepresentation. Hawkins v. Empress Healthcare
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Mgmt., LLC, 371 P.3d 84, 92 (Wash. Ct. App. 2016) (fraudulent
misrepresentation); Lawyers Title Ins. Corp. v. Baik, 147 Wash. 55 P.3d 619, 623
(Wash. 2002) (negligent misrepresentation). We agree with the trial court that, as a
matter of law, POCO could not have reasonably relied on the purported
misrepresentation. See Hawkins, 371 P.3d at 92. We affirm the district court’s
grant of summary judgment on POCO’s misrepresentation claim.
3. POCO also argues that in settling their dispute over the 2003 insurance
policies, FCIA violated Washington’s CPA, Wash. Rev. Code § 19.86.020. An
essential element of such a claim is that the defendant engaged in an unfair or
deceptive act or practice. Wash. Rev. Code § 19.86.093; see also Hangman Ridge
Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 535 (Wash. 1986).
POCO’s CPA claim fails because there was no misrepresentation, deception, or
unfairness. The terms of the contract were not deceptive, and POCO did not make
a showing that there was a genuine dispute over whether FCIA knew about the
criminal investigation. Indeed, as the district court noted, “it strains credibility to
argue that POCO . . . interpreted the release to include any claims, including
criminal, the federal government may have had against POCO.” POCO’s
additional argument that FCIA violated the Insurance Commissioner’s regulations
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relating to unfair settlement practices, which provide the basis for a CPA claim,
fails for the same reason. See Wash. Admin. Code § 284-30-330.
AFFIRMED.
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