Arch Insurance Co. v. Nizar Katbi , 610 F. App'x 622 ( 2015 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT JUL 22 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
ARCH INSURANCE COMPANY, a No. 13-56135
Missouri corporation,
D.C. No. 2:12-cv-02544-JFW-
Plaintiff - Appellee, RNB
v.
MEMORANDUM*
NIZAR AND NUHA KATBI FAMILY
TRUST; NIZAR KATBI, individually and
as trustee of the Nizar and Nuha Katbi
Family Trust; NUHA KATBI, individually
and as trustee of the Nizar and Nuha Katbi
Family Trust,
Defendants - Appellants.
Appeal from the United States District Court
for the Central District of California
John F. Walter, District Judge, Presiding
Submitted July 6, 2015**
Pasadena, California
Before: W. FLETCHER, PAEZ, and BERZON, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Arch Insurance, an insurer that underwrites surety bonds for the construction
industry, entered into an indemnity agreement with FTR International President
and CEO Nizar Katbi in 2006 (“Indemnity Agreement”). Katbi and FTR agreed to
indemnify and hold Arch harmless for all losses sustained from any bonds Arch
executed on FTR’s behalf. The next year, in 2007, Katbi wrote a letter informing
Arch that he was switching sureties. FTR switched back to using Arch as a surety
two years later. The parties did not sign a new indemnity agreement, but Arch and
FTR did receive and execute new bonds.
After FTR defaulted on its obligations, Arch sued to collect the money it had
paid FTR’s subcontractors and suppliers on FTR’s bonds. Arch moved for
summary judgment. Katbi failed to oppose Arch’s motion on time, but the district
court granted him an extension. In his opposition, Katbi claimed that the 2007
letter switching sureties terminated the Indemnity Agreement. In its reply, Arch
provided evidence that Katbi continued to rely on the Indemnity Agreement after
he sent that letter. The district court granted summary judgment. One month later,
Katbi filed motions for relief from the judgment and for reconsideration. The
district court denied the motions.
Under California contract law, which governs here, a contract remains in
force until it is terminated according to its terms or by the acts of the parties
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evidencing an abandonment. Busch v. Globe Indus., 200 Cal. App. 2d 315, 320
(1962). The only evidence the Indemnity Agreement was terminated is a letter
Katbi sent Arch in 2007 stating that FTR was switching sureties. The letter did not
mention the Indemnity Agreement. After Katbi contracted with Arch again for
surety coverage for FTR, he sent letters to Arch as late as 2012 telling Arch that it
had to comply with the Indemnity Agreement. The parties never abandoned that
contract, and Katbi is estopped from claiming that they did. See Metalclad Corp.
v. Ventana Envtl. Org. P’Ship, 109 Cal. App. 4th 1705, 1713–14 (2003).
The district court did not abuse its discretion in denying Katbi’s motions for
relief from the judgment and reconsideration. A court may relieve a party from a
final judgment based on “excusable neglect.” Fed. R. Civ. P. 60(b). Katbi sought
and received an extension of time to file his opposition. He had enough time to
oppose summary judgment.
A court also may relieve a party from a final judgment based on “newly
discovered evidence.” Id. Most of the “new” evidence Katbi pointed to was in his
possession before his opposition to summary judgment was due. See Feature
Realty, Inc. v. City of Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003). He could
have collected the other evidence before the opposition was due via public records
requests. See id.
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Finally, while the district court may not rely on evidence provided for the
first time in a reply brief, a court may rely on such evidence if it provides full
context for the facts supplied in the opposition. See SEC v. Platforms Wireless
Int’l Corp., 617 F.3d 1072, 1087 n.9 (9th Cir. 2007). Arch’s evidence that Katbi
relied on the Indemnity Agreement in 2012 gives context to Katbi’s claim that he
terminated the Agreement in 2007.
AFFIRMED.
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