Hartford Fire Insurance Compan v. Westamerica Bank ( 2013 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT APR 01 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
HARTFORD FIRE INSURANCE No. 11-16775
COMPANY,
D.C. No. 2:09-cv-02451-JAM-
Plaintiff - Appellant, DAD
v.
MEMORANDUM*
WESTAMERICA BANK,
Defendant - Appellee.
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Argued and Submitted March 12, 2013
San Francisco, California
Before: FISHER, CALLAHAN and NGUYEN, Circuit Judges.
Hartford Fire Insurance Company appeals the district court’s grant of
summary judgment in favor of Westamerica Bank. We have jurisdiction under 28
U.S.C. § 1291, and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
1. The district court properly determined that the set aside agreement
(Agreement) between Westamerica and Hartford, by its plain language, imposed
no obligation on Westamerica to ensure that construction work had been completed
before disbursing funds set aside to pay for that work. The Agreement authorized
Westamerica to make payment “on the authorization of” the borrower, without any
verification requirements, and explicitly provided that Westamerica “makes no
representations as to the use of such funds after such withdrawal,” that
Westamerica “undertakes no obligation to determine or insure . . . that such
improvements have been properly completed” and that “[Westamerica] will not be
responsible to the Borrower or to [Hartford] for proper use of funds disbursed.”
2. The extrinsic evidence Hartford proffered did not introduce any
ambiguity into Agreement. Evidence of industry usage “can be invoked only to
interpret, not to create, contractual terms.” 1 Witkin, Summary of Cal. Law (10th),
Contracts § 755 (citing Peiser v. Mettler, 50 Cal. 2d 594, 609 (1958)). There is no
evidence that Hartford’s executive’s expectations regarding the Agreement were
shared with Westamerica. See Banning Ranch Conservancy v. Superior Court, 193
Cal. App. 4th 903, 915 (2011) (“[A] party’s undisclosed subjective intent cannot be
used to override the contractual terms themselves.”). The provisions Hartford has
cited from the construction loan agreement between Westamerica and the borrower
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were expressly for Westamerica’s benefit, and none obligated Westamerica to
verify completion before disbursing funds.
3. The district court properly granted summary judgment in favor of
Westamerica on Hartford’s conversion claim because that claim was dependent on
Hartford’s contract claim.
AFFIRMED.
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