FILED
NOT FOR PUBLICATION APR 26 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TICKETMASTER, LLC, a Virginia No. 11-56285
Company,
D.C. No. 2:11-cv-02110-PA-JCG
Plaintiff - Appellant,
v. MEMORANDUM*
ILLINOIS UNION INSURANCE
COMPANY, an Illinois Company,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted April 11, 2013
Pasadena, California
Before: BERZON, TALLMAN, and M. SMITH, Circuit Judges.
Plaintiff-Appellant Ticketmaster, LLC (Ticketmaster) appeals the district
court’s judgment on the pleadings in favor of Defendant-Appellee Illinois Union
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Insurance Company (Illinois Union). We have jurisdiction under 28 U.S.C. §
1291, and we reverse the district court’s judgment.
Ticketmaster, which sells event tickets online, obtained an Errors and
Omissions Liability Insurance Policy (the Policy) from Illinois Union that provided
liability coverage arising from the performance or failure to perform its
professional services for the period from October 1, 2003 to October 1, 2004. The
Policy obligates Illinois Union to defend Ticketmaster against any covered claim.
The Policy also contains 28 exclusionary provisions, including Exclusion E, which
states that the Policy does not apply to any claim “based on or arising out of . . .
any dispute involving fees, expenses or costs paid to or charged by the Insured.”
On October 21, 2003, certain ticket purchasers filed a putative class action against
Ticketmaster in Los Angeles Superior Court (Schlesinger v. Ticketmaster, Case
No. BC 304565 (Schlesinger action)). In the Schlesinger action, the class alleged,
among other claims, that Ticketmaster made false representations regarding UPS
delivery fees and order-processing charges for event tickets. Ticketmaster
demanded that Illinois Union defend it in the Schlesinger action. When Illinois
Union refused, citing Exclusion E, Ticketmaster sued Illinois Union for breach of
contract and bad faith. Illinois Union moved for judgment on the pleadings, which
the district court granted.
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We review de novo a dismissal under Federal Rule of Civil Procedure 12(c).
United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1053
(9th Cir. 2011). “Under California law, the interpretation of an exclusionary clause
is an issue of law upon which the court must make its own independent
determination.” Cont’l Cas. Co. v. City of Richmond, 763 F.2d 1076, 1079 (9th
Cir. 1985).
The district court erred in dismissing Ticketmaster’s breach of contract
claim by failing to subject Exclusion E to the “closest possible scrutiny.” Haynes
v. Farmers Ins. Exch., 89 P.3d 381, 391 (Cal. 2004) (citation and quotes omitted).
When narrowly construed in favor of Ticketmaster, MacKinnon v. Truck Insurance
Exchange, 73 P.3d 1205, 1213 (Cal. 2003), Exclusion E is reasonably susceptible
to at least two meanings, particularly in light of the Policy’s other 27 exclusions,
and is thus, ambiguous: (i) Exclusion E may refer narrowly to a dispute regarding
the monetary amount paid to or charged by Ticketmaster for uncontested services,
or (ii) more generally, Exclusion E may refer to any dispute regarding a fee or
charge for professional services, including a dispute regarding the relationship
between services provided and the fees charged. See Palmer v. Truck Ins. Exch.,
988 P.2d 568, 573 (Cal. 1999). Illinois Union failed to satisfy its burden of
showing that (ii), its interpretation of Exclusion E, is the only reasonable one.
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MacKinnon, 73 P.3d at 1218. There are at least some allegations in the
Schlesinger action that do not involve the amount charged for uncontested
services. For example, the allegation that Ticketmaster performed no services in
exchange for its order-processing charge does not dispute the amount charged, but
the relationship between any fee at all and the services provided. That dispute, at
least, is within interpretation (ii), but not interpretation (i), of Exclusion E.
Whether the district court erred in denying Ticketmaster additional time to
develop extrinsic evidence is now moot given that we are reversing and remanding
this case for reconsideration of the breach of contract claim and the proper
interpretation of Policy Exclusion E. Ticketmaster will necessarily have additional
time to develop and present extrinsic evidence on remand. Similarly, Ticketmaster
will also be free to relitigate the previously dismissed bad faith claim since there is
now a potentially viable breach of contract claim.
Accordingly, the district court’s judgment is reversed, and the case is
remanded for reinstatement of the complaint and further proceedings.
REVERSED and REMANDED.
4