Agrakey Solutions, LLC v. Mid-Continent Casualty Company , 539 F. App'x 821 ( 2013 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT SEP 04 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
AGRAKEY SOLUTIONS, LLC, and No. 12-35269
JOHN REITSMA,
D.C. No. 1:10-cv-00570-EJL-REB
Plaintiffs - Appellants,
v. MEMORANDUM*
MID-CONTINENT CASUALTY
COMPANY,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Idaho
Edward J. Lodge, District Judge, Presiding
Argued and Submitted August 28, 2013
Seattle, Washington
Before: HAWKINS, McKEOWN, and CLIFTON, Circuit Judges.
AgraKey Solutions, LLC and John Reitsma (collectively, “AgraKey”) appeal
the district court’s grant of summary judgment to Mid-Continent Casualty Company
(“Mid-Continent”) on AgraKey’s claim that Mid-Continent breached its contractual
*
This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
duty to defend AgraKey. We review the entry of summary judgment de novo,
applying Idaho law and, in the absence of a governing decision from the Idaho
Supreme Court, “using intermediate appellate court decisions, decisions from other
jurisdictions, statutes, treatises, and restatements as guidance.” Trishan Air, Inc. v.
Fed. Ins. Co., 635 F.3d 422, 426–27 (9th Cir. 2011). We affirm.
Mid-Continent had no duty to defend AgraKey against allegations made by
BioMagic, Inc. (“BioMagic”) in an underlying arbitration action, because those
allegations did not “reveal[] a potential for liability that would be covered by
[AgraKey’s insurance] policy.” Idaho Cntys. Risk Mgmt. Program Underwriters v.
Northland Ins. Cos., 205 P.3d 1220, 1224 (Idaho 2009) (quoting Hoyle v. Utica Mut.
Ins. Co., 48 P.3d 1256, 1264 (Idaho 2002)) (internal quotation marks omitted).
Specifically, the arbitration action revealed no potential for liability falling
within the policy’s coverage for “disparagement” because BioMagic did not allege
that AgraKey made any “[o]ral, written, or electronic publication of material that . . .
2
disparage[d] [BioMagic’s] goods, products or services,” even impliedly,1 as required
by the policy.
The arbitration action likewise revealed no potential for liability for “the use of
another’s advertising idea in your advertisement,” because AgraKey was not alleged
to have used any other entity’s advertising idea in its advertisement. Perhaps more
importantly, considering BioMagic’s allegations in context, it is clear that any
reference to AgraKey’s advertising activities was made to expose AgraKey’s alleged
unlicensed use of BioMagic’s product, not to claim damage caused by those activities
themselves. See Constr. Mgmt. Sys., Inc. v. Assurance Co. of Am., 23 P.3d 142, 145
(Idaho 2001); see also Microtec Research, Inc. v. Nationwide Mut. Ins. Co., 40 F.3d
968, 971 (9th Cir. 1994).
Because BioMagic made no claims that would even potentially be covered by
AgraKey’s insurance policy, the arbitration action did not trigger Mid-Continent’s
duty to defend.
AFFIRMED.
1
BioMagic did not claim, for example, that AgraKey made any publication
regarding the quality of BioMagic’s products, cf. Michael Taylor Designs, Inc. v.
Travelers Prop. Cas. Co. of Am., 495 F. App’x 830, 831 (9th Cir. 2012); Travelers
Prop. Cas. Co. of Am. v. Charlotte Russe Holding, Inc., 207 Cal. App. 4th 969,
972–73 (Ct. App. 2012), nor that AgraKey claimed exclusive ownership of a
BioMagic product, cf. Burgett, Inc. v. Am. Zurich Ins. Co., 830 F. Supp. 2d 953,
963–64 (E.D. Cal. 2011); E.piphany, Inc. v. St. Paul Fire & Marine Ins. Co., 590 F.
Supp. 2d 1244, 1253 (N.D. Cal. 2008); Liberty Mut. Ins. Co. v. OSI Indus., Inc., 831
N.E.2d 192, 199 (Ind. Ct. App. 2005).
3