Bradley Cohen v. Berkley National Ins. Co. ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 18 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRADLEY STEPHEN COHEN; COHEN No. 17-16960
ASSET MANAGEMENT, INC.,
D.C. No.
Plaintiffs-Appellants, 2:17-cv-00057-GMN-GWF
v.
MEMORANDUM*
BERKLEY NATIONAL INSURANCE
COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, District Judge, Presiding
Argued and Submitted July 8, 2019
Seattle, Washington
Before: WATFORD and MILLER, Circuit Judges, and BENITEZ,** District
Judge.
Bradley S. Cohen and Cohen Asset Management, Inc. (“CAM”) appeal the
district court’s dismissal for failure to state a claim of their diversity insurance
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
coverage action against Berkley National Insurance Co., alleging breach of
contract under Nevada law in Berkley’s refusal to indemnify a federal defamation
judgment that Cohen and CAM obtained against Berkley’s insured. We have
jurisdiction under 28 U.S.C. § 1291. We review de novo, see Los Angeles Lakers,
Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017), and we affirm.
The district court properly ruled that Cohen and CAM failed to state a claim
for breach of contract. See Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522,
526 (9th Cir. 2008) (dismissal is proper if it appears beyond doubt that plaintiffs
can prove no set of facts that would entitle them to relief). Two Berkley policies
insured Northwest Territorial Mint, LLC, against liability for damages for
“personal and advertising injury.” The district court correctly concluded that
policy exclusions for “knowing violation of the rights of another” and for “material
published with knowledge of its falsity” were unambiguous and required that the
insured acted with knowledge. See Century Sur. Co. v. Casino West, Inc., 329
P.3d 614, 616 (Nev. 2014) (setting forth standard for preclusion of coverage under
a policy exclusion). Further, considering the underlying complaint and the verdict
and judgment, which found that the conduct of Northwest and other defendants
amounted to fraud, the “knowledge of falsity” exclusion plainly applied. See
Northstar Fin. Advisors, Inc. v. Schwab Invs., 779 F.3d 1036, 1042-43 (9th Cir.
2015) (documents that are incorporated into the complaint or that form the basis of
2
plaintiffs’ claim may be considered part of the pleading); Century, 329 P.3d at
616.1 The punitive damages award against Northwest was covered by the
exclusion because the jury and the district court awarded punitive damages
specifically against Northwest, and Cohen and CAM are not entitled to
indemnification of compensatory damages because the jury and district court did
not distinguish between compensatory and punitive damages in finding that
Northwest and the other defendants’ conduct amounted to fraud, oppression, and
malice.
The district court did not abuse its discretion in dismissing without leave to
amend. See Rentmeester v. Nike, Inc., 883 F.3d 1111, 1125 (9th Cir. 2018) (no
abuse of discretion in dismissing with prejudice when amendment would be futile).
We deny appellee’s motion for judicial notice of documents not attached to
the complaint and not part of the record before the district court (Docket Entry No.
31). Appellants’ motion to strike portions of the answering brief (Docket Entry
No. 35) is denied.
AFFIRMED.
1
Cohen and CAM asserted for the first time at oral argument that the jury
instructions given at trial render it unclear whether the jury found that Northwest
itself engaged in knowing and intentional conduct sufficient to trigger the
exclusions. We decline to address this argument as Cohen and CAM failed to
preserve it below or adequately develop it in their briefs on appeal.
3