Endurance American Specialty v. Afa Financial Group, LLC , 550 F. App'x 372 ( 2013 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT DEC 17 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
ENDURANCE AMERICAN No. 12-55636
SPECIALTY INSURANCE COMPANY,
a Delaware Corporation, D.C. No. 2:11-cv-01073-DSF-
AJW
Plaintiff-counter-defendant -
Appellee,
MEMORANDUM*
and
RODNEY S. PALMER; et al.,
Defendants - Appellees,
and
AFA FINANCIAL GROUP, LLC,
Defendant-counter-claimant -
Appellee,
v.
MICHAEL T. NOMMENSEN,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Dale S. Fischer, District Judge, Presiding
Submitted December 4, 2013**
Pasadena, California
Before: PREGERSON and CHRISTEN, Circuit Judges, and SILVER, Senior
District Judge.***
Michael Nommensen appeals the district court’s order granting summary
judgment to Endurance American Specialty Insurance Company (Endurance).1 We
affirm.
We must decide: (1) whether the district court erred by ruling that
Nommensen’s claim against AFA Financial Group, LLC (AFA) was excluded
from coverage under Endurance’s professional liability insurance policy; and (2)
whether the district court abused its discretion by denying Nommensen a
continuance before granting summary judgment.
In April 2009, AFA submitted an application for professional liability
coverage from Endurance. Under the application’s exclusion clause, AFA agreed
that any claim “arising from” a fact or circumstance that was “required to be
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Roslyn O. Silver, Senior District Judge for the U.S.
District Court for the District of Arizona, sitting by designation.
1
Because the parties are familiar with the facts and procedural history,
we do not recount them here.
2
disclosed in response to Question 9 . . . is hereby expressly excluded from
coverage.” The policy itself also excluded from coverage “any Claim made
pursuant to this Policy with respect to any Insured Person who knew, as of the
effective date of the Policy Period, of any Facts that were not truthfully and
accurately disclosed in the Application” (emphasis in original).
At the time AFA submitted the application, AFA was aware that in January
2009, Nommensen sent a “tip” to the Financial Industry Regulatory Authority
(FINRA), alleging violations of FINRA’s rules on unregistered employees. In
response to FINRA’s letter of inquiry, AFA’s Chief Compliance Officer replied
that Nommensen had violated FINRA rules, and that AFA had reprimanded his
supervisor and requested that Nommensen be terminated. These events were
“required to be disclosed” under the plain language of Question 9 of the insurance
application, but were not.
In the underlying arbitration action at issue here, Nommensen alleged that an
insured entity under AFA’s supervision enticed him to bring his book of business
to work there with the promise of being registered, that he was wrongfully
terminated, and that AFA committed libel by misrepresenting the circumstances of
his termination. These allegations “arose from” the same circumstances as
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Nommensen’s FINRA tip. Nommensen’s claim is excluded from coverage under
the plain language of the insurance application and policy.
Nommensen argues that, in order to successfully invoke the application’s
exclusion clause, Endurance had a duty to investigate AFA’s response to Question
9. AFA was a sophisticated business entity with actual knowledge of the FINRA
proceedings. There is no reason to depart from the plain language of the
application. Nommensen’s claim on the policy is excluded.
The district court did not abuse its discretion because Nommensen has not
demonstrated “that allowing additional discovery would have precluded summary
judgment.” Bank of Am., NT & SA v. Pengwin, 175 F.3d 1109, 1118 (9th Cir.
1999). He has not pointed to any additional discovery that would alter the analysis
above. On this record, the district court did not abuse its discretion by denying
Nommensen a continuance before ordering summary judgment.
AFFIRMED.
4