NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 22 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DOUGLAS JOSEPH GUILLON, No. 21-15297
Plaintiff-Appellant, D.C. No. 3:20-cv-07926-CRB
v.
MEMORANDUM*
AMCO INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Submitted December 9, 2021**
San Francisco, California
Before: MURGUIA, Chief Judge, IKUTA and VANDYKE, Circuit Judges.
Douglas Guillon appeals the district court’s order granting AMCO Insurance
Company’s (AMCO) Motion to Dismiss. Guillon was Shareholder, Director, and
Chief Executive Officer of Crush Steakhouse and Bar in Ukiah, California until its
closure. In 2015, Guillon purchased a businessowners’ liability insurance policy for
*
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).
Crush from Appellee AMCO. After learning of a lawsuit filed against Crush by
three former employees, Guillon contacted his insurance broker to request coverage
for the lawsuit under the policy. AMCO denied his claim and Guillon retained
counsel at his own expense. The underlying lawsuit culminated in a trial and a
verdict exceeding $430,000. One year after the verdict, Guillon filed this lawsuit,
alleging that AMCO breached the businessowners’ liability insurance policy.
The district court found that Guillon’s insurance policy did not provide
coverage for the conduct alleged in the underlying lawsuit. The district court
explained, in relevant part, that an employment-related practice exclusion provision
(ERP) in the policy excluded coverage for each of the claims and alleged conduct in
the underlying lawsuit, because the policy specifically excluded coverage for
allegations of “coercion, demotion, evaluation, reassignment, discipline,
defamation, harassment, humiliation, discrimination or malicious prosecution.”
Having found that Guillon was not entitled to coverage under the policy, the district
court dismissed his claims with prejudice and entered a final judgment on January
26, 2021. Guillon appealed. We have jurisdiction under 28 U.S.C. § 1291 and
affirm because the ERP excluded coverage for the underlying claims.
The plain language of Crush’s AMCO policy does not provide coverage for
the claims asserted in the underlying lawsuit because each of the plaintiffs in the
underlying lawsuit’s (underlying plaintiffs) allegations of discrimination,
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harassment, and coercion, are excluded by the plain language of the ERP, which
specifically bars claims arising out of employment-related “practices, policies, acts
or omissions such as coercion, demotion, evaluation, reassignment, discipline,
defamation, harassment, humiliation or discrimination directed at that person.”1
When considering whether an ERP exclusion applies to a particular set of facts under
California law, courts analyze two factors: “(1) the nexus between the allegedly
defamatory statement (or other tort) at issue and the third-party plaintiff's
employment by the insured, and (2) the existence (or nonexistence) of a relationship
between the employer and the third party plaintiff outside the employment
relationship.” Low v. Golden Eagle Ins. Co., 128 Cal. Rptr. 2d 423, 428–29 (Cal.
Ct. App. 2002).
Here, three former employees brought the underlying claims for gender
discrimination, disability discrimination, sexual harassment, retaliation, failure to
prevent discrimination, failure to accommodate disability, failure to engage in the
interactive process, battery, wrongful termination, intentional inflection of
emotional distress, failure to pay wages and overtime, failure to give mandatory
breaks, failure to pay vested vacation, failure to pay wages upon discharge, failure
to provide properly itemized wage statement, inappropriately charging employees
for uniforms, unfair business practices, and failure to provide sexual harassment
1
On appeal, Guillon focuses on the underlying battery claim.
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training. All of these claims arose out of employment-related “practices, policies,
acts or omissions” because (1) each claim alleged conduct that occurred at—or
because of employment with—Crush, which is a sufficiently close nexus, and (2) no
underlying plaintiff indicated the existence of a non-employment relationship with
Guillon or another defendant. See Jon Davler Inc. v. Arch Ins. Co., 178 Cal. Rptr.
3d 502, 511 (Cal. Ct. App. 2014).
Plaintiffs’ battery claims—the only underlying claims that Guillon now
argues “potentially” required AMCO to defend him under the policy—are excluded
by the policy’s ERP clause along with the other claims. The underlying plaintiffs’
claim was that a Crush manager committed batteries on Crush employees while he
was their supervisor. To the extent the underlying plaintiffs were around the
supervisor outside of work, they alleged they were following directives from him.
And they alleged that if they opposed or reported the supervisor’s conduct, they
faced discipline or termination of their employment. This nexus between the alleged
batteries and plaintiffs’ employment is sufficient to classify the underlying battery
claim as arising out of an employment-related practice pursuant to Low, 128 Cal.
Rptr. 2d 423. See also Jon Davler, 178 Cal. Rptr. 3d at 510.2
2
Furthermore, any claim of vicarious liability in this context has not been previously
recognized. See Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co., 233
Cal. Rptr. 3d 487, 491 (Cal. 2018). And to the extent Guillon argues that the
plaintiffs’ allegations stated a claim for negligent hiring, retention, or supervision,
such a claim is precluded by the exclusion clause in this case.
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Given (1) the plain language of the AMCO employment-related practice
exclusion, (2) the close nexus between all of the underlying plaintiffs’ claims and
their employment, and (3) the lack of a non-employment relationship between the
plaintiffs and their supervisors who were the subject of the underlying claims, it is
clear that Guillon sought coverage for claims arising out of employment-related
“practices, policies, acts or omissions” excluded by the policy.
As Guillon concedes, an insurer has no duty to defend when there is no
possibility of coverage under the relevant insurance policy. Because there was no
possibility of coverage for any of the claims resulting from the employment-related
practices, policies, acts or omissions at issue here, the district court did not err in
finding that AMCO had no duty to defend in the underlying action and therefore did
not breach its contract with Crush.
AFFIRMED.
5