Northland, LLC v. Contractors Bonding & Insurance Company ( 2023 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 16 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NORTHLAND, LLC, an Idaho limited No. 22-35476
liability company; KAYLA BRIGGS,
D.C. No. 4:21-cv-00281-DCN
Plaintiffs-Appellants,
v. MEMORANDUM *
CONTRACTORS BONDING &
INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Idaho
David C. Nye, Chief District Judge, Presiding
Argued and Submitted June 5, 2023
Seattle, Washington
Before: SCHROEDER, HAWKINS, and CALLAHAN, Circuit Judges.
Northland, LLC and its owner Kayla Briggs (collectively “Northland”) appeal
the district court’s grant of summary judgment to Northland’s insurer, Contractors
Bonding & Insurance Company (“CBIC”). Northland contends that the district court
erred in its determination that a commercial general liability policy (“the Policy”)
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
that CBIC issued to Northland did not cover two lawsuits—one regarding
Northland’s failure to return a customer’s deposit (the “Ball lawsuit”) and another
regarding missed payments under equipment financing agreements (the “Balboa
lawsuit”). We have jurisdiction under 28 U.S.C. § 1291. We review the district
court’s grant of summary judgment de novo, Tabares v. City of Huntington Beach,
988 F.3d 1119, 1124 (9th Cir. 2021), and affirm.
Under Idaho law—which governs the substantive issues in this case, see Nitco
Holding Corp. v. Boujikian, 491 F.3d 1086, 1089 (9th Cir. 2007)—an insurer’s duty
to defend a particular lawsuit is determined from the four corners of the complaint.
Scout, LLC v. Truck Ins. Exch., 434 P.3d 197, 202‒03 (Idaho 2019). In relevant part,
the Policy provides that CBIC “will pay those sums that the insured becomes legally
obligated to pay as damages because of . . . ‘property damage’” that is caused by an
“occurrence.” Thus, CBIC had a duty to defend the Ball and Balboa lawsuits if the
allegations of the complaints, “read broadly, reveal a potential for liability” for
damages arising from property damage caused by an occurrence. Hoyle v. Utica
Mut. Ins. Co., 48 P.3d 1256, 1261 (Idaho 2002). Neither complaint includes such
allegations. Instead, both complaints allege breaches of contract and seek liability
arising from contractual obligations and debts rather than from property damage.
See Magic Valley Potato Shippers v. Cont’l Ins., 739 P.2d 372, 375 (Idaho 1987).
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Even assuming that CBIC was required to consider extrinsic facts regarding a
fire that occurred at Northland’s shop, CBIC did not err in its determination that the
Ball and Balboa lawsuits did not fall under the Policy’s coverage. Although the fire
may have made it more difficult for Northland to satisfy the financial obligations at
issue in the Ball and Balboa lawsuits, it was not the impetus for the lawsuits or the
basis for calculating the damages sought therein. See id. Accordingly, the district
court correctly determined that CBIC was entitled to summary judgment.
Because we conclude that the Ball and Balboa lawsuits do not involve
property damage caused by an occurrence necessary to trigger coverage under the
Policy, we need not consider Northland’s remaining arguments regarding the
Policy’s contract-related exclusion.
AFFIRMED.
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