NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 9 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JENSEN SHIRLEY; KAREN SHIRLEY, No. 19-56066
Plaintiffs-Appellants, D.C. No.
3:18-cv-00994-AJB-BGS
v.
ALLSTATE INSURANCE COMPANY, MEMORANDUM*
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
Anthony J. Battaglia, District Judge, Presiding
Submitted October 7, 2020**
Pasadena, California
Before: M. SMITH and OWENS, Circuit Judges, and CARDONE,*** District
Judge.
Jensen and Karen Shirley (collectively, the “Shirleys”) appeal from the
district court’s summary judgment in favor of Allstate Insurance Co. (“Allstate”)
*
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).
***
The Honorable Kathleen Cardone, United States District Judge for the
Western District of Texas, sitting by designation.
on their California state law claims for breach of contract and insurance bad faith.
We review de novo a district court’s decision to grant summary judgment. Folkens
v. Wyland Worldwide, LLC, 882 F.3d 768, 773 (9th Cir. 2018). As the parties are
familiar with the facts, we do not recount them here. We have jurisdiction under
28 U.S.C. § 1291. We affirm.
1. Under California law, the Shirleys bear the initial burden in their
breach of contract claim “to prove that an event is a claim within the scope of the
[insurance policy’s] basic coverage.” Aeroquip Corp. v. Aetna Cas. & Sur. Co., 26
F.3d 893, 894–95 (9th Cir. 1994) (citation omitted). Allstate’s policy insures the
Shirleys against “physical loss to property,” defined as “physical injury to . . .
tangible property.” The parties agree that fire contamination constitutes physical
injury under the policy.
The Shirleys failed to prove that ash or soot physically contaminated their
home. After the Shirleys filed their claim with Allstate, four inspectors from three
firms visited the Shirleys’ home and took samples of suspected ash or soot. None
of these four inspectors found evidence of fire contamination, including soot and
ash. In the absence of physical contamination, the Shirleys rely on subjective
reports of a smoke smell in their home. However, the agreement explicitly
precludes coverage based on “vapors” or “fumes.” The Shirleys therefore have not
presented a genuine dispute of material fact regarding the alleged physical damage
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to their home. See Folkens, 882 F.3d at 773 (describing standard for summary
judgment).
The Shirleys also allege that Allstate’s inspector ignored “burnt
landscaping” on their property. However, the Shirleys do not advance any
argument about whether the damage to their landscaping falls within the scope of
their insurance coverage or whether they submitted a claim to Allstate for such
alleged damages. The Shirleys have therefore forfeited this issue. See Kohler v.
Inter-Tel Techs., 244 F.3d 1167, 1182 (9th Cir. 2001) (“Issues raised in a brief
which are not supported by argument are deemed abandoned.” (citation omitted)).
2. “A covenant of good faith and fair dealing is implied in every
insurance contract” under California law. Frommoethelydo v. Fire Ins. Exch., 721
P.2d 41, 44 (Cal. 1986) (citation omitted). To fulfill this implied covenant, “an
insurer must give at least as much consideration to the interests of the insured as it
gives to its own interests” and cannot “unreasonably and in bad faith withhold[]
payment of the claim of its insured.” Id. To receive punitive damages for breach
of an implied covenant, the plaintiff also must prove that the defendant “acted with
the requisite intent to injure [the] plaintiff.” Silberg v. Cal. Life Ins. Co., 521 P.2d
1103, 1110 (Cal. 1974).
Allstate properly withheld benefits and did not breach its contract with the
Shirleys. Because no benefits are owed, Allstate cannot be liable for acting in bad
3 19-56066
faith when it refused to pay the Shirleys. See Manzarek v. St. Paul Fire & Marine
Ins. Co., 519 F.3d 1025, 1034 (9th Cir. 2008) (“[W]ithout a breach of the insurance
contract, there can be no breach of the implied covenant of good faith and fair
dealing.” (citation omitted)). Furthermore, because the Shirleys did not prove that
Allstate acted in bad faith—let alone with “intent to injure”—they are not entitled
to punitive damages. Silberg, 521 P.2d at 1110. The district court properly
granted summary judgment on these claims.
AFFIRMED.
4 19-56066
Jensen Shirley v. Allstate Ins. Co.
Combined Opinion