Piveg, Inc. v. General Star Indemnity Co. , 710 F. App'x 776 ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 8 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PIVEG, INC., No. 16-56003
Plaintiff-Appellant, D.C. No.
3:15-cv-00981-DMS-JLB
v.
GENERAL STAR INDEMNITY MEMORANDUM*
COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
Dana M. Sabraw, District Judge, Presiding
Submitted February 6, 2018**
Pasadena, California
Before: CALLAHAN and NGUYEN, Circuit Judges, and PRATT,*** District
Judge.
Piveg, Inc. (“Piveg”) appeals from the district court’s grant of summary
*
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 Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
judgment to General Star Indemnity Co. (“General Star”) on Piveg’s breach of
contract and related claims. We have jurisdiction under 28 U.S.C. § 1291.
Reviewing the district court’s summary judgment determination de novo and its
evidentiary rulings for abuse of discretion, see Pyramid Techs., Inc. v. Hartford
Cas. Ins., 752 F.3d 807, 813 (9th Cir. 2014), we affirm.1
Piveg supplied defective astaxanthin oil to J&D Laboratories, Inc. (“J&D”).
After J&D’s customer NOW Foods, Inc. (“NOW”) rejected softgels made from
this astaxanthin oil, J&D demanded that Piveg reimburse J&D for the purchase
price NOW would have paid J&D had NOW not rejected the softgels. After some
negotiating, Piveg and J&D agreed that Piveg would fully reimburse J&D. Piveg
initially paid J&D $5,000 and continued to make payments for several months.
Piveg then tendered a claim to General Star, its insurer, based on property damage.
General Star denied coverage.
General Star successfully moved for summary judgment on the ground that
the insurance policy’s no-voluntary payment (“NVP”) provision excluded
coverage to the extent Piveg “voluntarily ma[de] a payment, assume[d] any
obligation, or incur[red] any expense” to resolve third-party claims without
General Star’s consent. Such boilerplate provisions typically secure the insurer’s
1
As the parties are familiar with the facts and procedural history, we restate
them only as necessary to explain our decision.
2
rightful and “complete” prerogative to “control . . . the defense or compromise of
suits or claims” against the unilateral commitments made by the insured.
Jamestown Builders, Inc. v. Gen. Star Indem., 91 Cal. Rptr. 2d 514, 517 (Ct. App.
1999) (quoting Gribaldo, Jacobs, Jones & Associates v. Agrippina Versicherunges
A.G., 476 P.2d 406, 415 (Cal. 1970)) (emphasis in Jamestown Builders omitted).
Here, Piveg assumed an obligation to pay J&D the entire amount of Piveg’s
insurance demand without General Star’s consent. This deprived General Star of
the ability to control any defense or settlement of the claim.
That Piveg and J&D may have finalized the payment terms after General
Star denied the claim is inconsequential because explicit payment terms are
unnecessary to form a contract. See Facebook, Inc. v. Pac. Nw. Software, Inc., 640
F.3d 1034, 1037–38 (9th Cir. 2011) (“[A] contract that omits [material] terms . . .
is enforceable under California law, so long as the terms it does include are
sufficiently definite for a court to determine whether a breach has occurred, order
specific performance or award damages.” (citing Elite Show Servs., Inc. v. Staffpro,
Inc., 14 Cal. Rptr. 3d 184, 188 (Ct. App. 2004))).2 Nor does the statute of frauds
render Piveg’s agreement to pay J&D unenforceable, because the emails between
them sufficiently memorialize their agreement. See Cal. Civ. Code
2
Like the district court, we need not resolve whether an “assumed
obligation” clause in a policy requires an enforceable agreement between the
insured and the third party. In this case, there was.
3
§ 1624(b)(3)(A). The district court properly granted summary judgment to
General Star.
The district court did not abuse its discretion by striking certain portions of
Piveg’s chief executive officer Roberto Espinosa’s affidavit because “a party
cannot create an issue of fact by an affidavit contradicting his prior deposition
testimony.” Yeager v. Bowlin, 693 F.3d 1076, 1080 (9th Cir. 2012) (quoting Van
Asdale v. Int’l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009)). Espinosa testified
consistently and in detail that Piveg and J&D reached an agreement in November
2014 regarding the payment amount. His affidavit statement that this agreement
was not reached until September 2015 was clearly inconsistent with his deposition
testimony.
Finally, the district court correctly resolved Piveg’s good faith and fair
dealing claim. To establish a breach of the covenant of good faith and fair dealing,
the insured must prove that benefits owed under the policy were unreasonably and
improperly withheld. See Benavides v. State Farm Gen. Ins., 39 Cal. Rptr. 3d 650,
655–56 (Ct. App. 2006). However, because Piveg violated the NVP provision of
the contract, General Star owed Piveg no benefits under the policy.
AFFIRMED.
4