Amerco v. National Union Fire Insurance

FILED
NOT FOR PUBLICATION
JUN 06 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMERCO, No. 14-16041
Plaintiff - Appellant, D.C. No. 2:13-cv-02588-PGR
v.
MEMORANDUM*
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Arizona
Paul G. Rosenblatt, Senior District Judge, Presiding
Argued and Submitted May 10, 2016
San Francisco, California
Before: FARRIS, O’SCANNLAIN, and CHRISTEN, Circuit Judges.
This is an insurance coverage dispute. Five plaintiffs filed five shareholder
derivative lawsuits against AMERCO and its directors and officers in Nevada state
court, and the state court consolidated the cases. AMERCO sought coverage for
costs associated with the consolidated action under its directors and officers
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
liability policy (“D & O policy”). Its insurer, National Union Fire Insurance
Company of Pittsburgh, PA (“NUF”), denied coverage because one of the
plaintiffs in the consolidated action, Paul Shoen, was an “Insured” under the D &
O policy. AMERCO sued for breach of the insurance contract. The district court
granted NUF’s motion to dismiss. We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.1
1. The district court properly dismissed AMERCO’s complaint because
AMERCO did not allege that the non-Shoen plaintiffs instigated and continued
their claims totally independent of Paul Shoen, an Insured under the policy. The
“Insured v. Insured” exclusion in the D & O policy barred coverage for security
holders’ claims except when “such security holder’s claim is instigated and
continued totally independent of” any Insured. See Biltmore Assocs., LLC v. Twin
City Fire Ins. Co., 572 F.3d 663, 666 (9th Cir. 2009) (interpreting a similar
exclusion under Arizona law and explaining that “the [shareholder derivative suit]
exception to the exclusion only applies if the claims are ‘instigated and continued
totally independent of’ the corporation”). Under Arizona law, the “insurer has the
burden of proving that a policy exclusion is applicable,” but “the insured carries
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The parties agree that Arizona law governs the substantive questions
raised here.
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the burden of proving that his claim falls within an exception to that exclusionary
clause.” Hudnell v. Allstate Ins. Co., 945 P.2d 363, 365 (Ariz. Ct. App. 1997).
Here, AMERCO stated in its complaint that the five plaintiffs in the
consolidated action were security holders, but it did not allege that the non-Shoen
plaintiffs filed or maintained their claims independent of Paul Shoen. In fact,
AMERCO conceded in its complaint (and in its briefing to our court) that Shoen
participated in the underlying lawsuit. AMERCO therefore failed to carry its
burden under Hudnell of alleging that the non-Shoen claims fell within the
exception to the “Insured v. Insured” exclusion, see 945 P.2d at 365, and we affirm
the district court’s dismissal of AMERCO’s complaint on that ground, see Ashcroft
v. Iqbal, 556 U.S. 662, 677–78 (2009).
2. The district court properly declined to take judicial notice of twenty-five
exhibits NUF filed with its motion to dismiss. See Fed. R. Evid. 201.
AFFIRMED.
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