National Fire & Marine Ins. Co v. Scott Hampton ( 2020 )

FILED
NOT FOR PUBLICATION
OCT 21 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATIONAL FIRE & MARINE No. 19-17235
INSURANCE COMPANY,
D.C. No.
Plaintiff-counter- 2:18-cv-01338-JCM-BNW
defendant-Appellee,
v. MEMORANDUM*
SCOTT HAMPTON, as Heir, Executor
and Personal Representative of the
ESTATE OF DIANA HAMPTON,
individually and on behalf of his minor
children I.S. and S.M.,
Defendant-Appellant,
and
STEVEN A. HOLPER,
Defendant-counter-claimant.
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Submitted October 19, 2020**
San Francisco, California
Before: THOMAS, Chief Judge, and KELLY*** and MILLER, Circuit Judges.
Intervenor Defendant-Appellant Scott Hampton, as a representative of the
estate of Diana Hampton (“the Estate”), appeals the district court’s decision
granting Plaintiff-Appellee National Fire & Marine Insurance Co.’s (“National
Fire”) motion for summary judgment. We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and we affirm. Because the parties are familiar with the facts of this case,
we need not recount them here.
We review orders granting motions for summary judgment de novo, A.G. v.
Paradise Valley Unified Sch. Dist. No. 69, 815 F.3d 1195, 1202 (9th Cir. 2016),
and we review a district court’s interpretation of contract provisions de novo,
Flores v. Lynch, 828 F.3d 898, 905 (9th Cir. 2016). We review a district court’s
denial of discovery under Federal Rule of Civil Procedure 56(d) for abuse of
discretion. Atay v. Cnty. of Maui, 842 F.3d 688, 698 (9th Cir. 2016).
1. Under Nevada law, for an insurer to avoid coverage under a policy
exclusion, it must “(1) write the exclusion in obvious and unambiguous language
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Paul J. Kelly, Jr., United States Circuit Judge for the
U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
2
in the policy, (2) establish that the interpretation excluding covering under the
exclusion is the only interpretation of the exclusion that could fairly be made, and
(3) establish that the exclusion clearly applies to [the] particular case.” Powell v.
Liberty Mut. Fire Ins. Co., 252 P.3d 668, 674 (Nev. 2011).
Applying these three elements, the district court properly granted summary
judgment. The language of the professional liability insurance policy obviously
and unambiguously excludes coverage for “[a]ny loss arising from, or in
connection with . . . any event, health care event, or managed care event when
intertwined with, or inseparable from . . . any willful violation of any law, statute,
or regulation.” (emphasis omitted). There is only one fair interpretation of this
exclusion: it excludes coverage for willful violations of the law. Contrary to the
Estate’s arguments, this interpretation does not render the policy illusory. The
policy does not exclude coverage for malpractice; it excludes coverage only for
willful violations of the law. The exclusion therefore clearly applies to this case.
The wrongful death complaint alleges, and Steven Holper’s plea agreement
supports, that Holper willfully violated federal controlled substances laws,
including 21 U.S.C. § 841(a)(1) and (b)(1)(C), and that this violation resulted in
the death of Diana Hampton. The Estate has not adduced evidence to the contrary
3
that would create a genuine dispute of material fact. See Scott v. Harris, 550 U.S.
372, 380 (2007). Thus, coverage under the policy is excluded.
Because coverage is clearly precluded, the district court properly relieved
National Fire of its duty to defend and indemnify Holper in the wrongful death
action. National Fire has no duty to defend because “there is no potential for
coverage,” United Nat’l Ins. Co. v. Frontier Ins. Co., Inc., 99 P.3d 1153, 1158
(Nev. 2004) (quoting Bidart v. Am. Title Ins. Co., 734 P.2d 732, 734 (Nev. 1987)),
under the policy, and it has no duty to indemnify because “the insured’s activity
and the resulting loss or damage [do not] actually fall within the . . . policy’s
coverage,” id. (citation and quotation marks omitted).
2. Under Federal Rule of Civil Procedure 56(d), when a litigant “shows
by affidavit or declaration that, for specified reasons, it cannot present facts
essential to justify its opposition to [summary judgment],” the district court may:
“(1) defer considering the motion or deny it; (2) allow time to obtain affidavits or
declarations or to take discovery; or (3) issue any other appropriate order.” Atay,
842 F.3d at 698 (quoting Fed. R. Civ. P. 56(d)). “The burden is on the party
seeking a Rule 56(d) continuance ‘to proffer sufficient facts to show that the
evidence sought exists, and that it would prevent summary judgment.’” Id.
4
(quoting Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151, 1161 n.6 (9th Cir.
2001)).
The district court did not abuse its discretion by denying the Estate leave to
conduct further discovery under Rule 56(d) before granting summary judgment.
The affidavit the Estate submitted in support of its request sought discovery related
only to Holper and Hampton’s doctor-patient relationship and the cause of
Hampton’s death; it did not seek any information necessary to accurately interpret
the terms of Holper’s professional liability insurance policy such that the discovery
would preclude summary judgment.
3. Finally, the Estate’s public policy arguments do not require us to
reach a different result. The Nevada Supreme Court has held that public policy
considerations do not disfavor “the enforcement of intentional, criminal, and
sexual act exclusions in professional liability policies.” Rivera v. Nev. Med.
Liability Ins. Co., 814 P.2d 71, 74 (Nev. 1991).
AFFIRMED.
5