Michael Wampold v. Safeco Ins. Co.

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS SEP 9 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MICHAEL S. WAMPOLD; DINA L. No. 19-35972
WAMPOLD, husband and wife and the
marital community composed thereof, D.C. No. 2:19-cv-00169-TSZ
Plaintiffs-Appellants,
MEMORANDUM*
v.
SAFECO INSURANCE COMPANY OF
AMERICA, a non-Washington corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Submitted September 4, 2020**
Seattle, Washington
Before: HAWKINS and McKEOWN, Circuit Judges, and CALDWELL,***
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Karen K. Caldwell, United States District Judge for
the Eastern District of Kentucky, sitting by designation.
Michael Wampold and Dina Wampold (“the Wampolds”) appeal from the
district court’s order granting partial summary judgment to Safeco Insurance
Company (“Safeco”) in the Wampolds’ action for breach of contract, declaratory
judgment regarding the coverage available under their Safeco insurance policy, and
for violation of Washington’s “Insurance Fair Conduct Act,” RCW 48.30.015. The
district court did not dismiss all of the Wampolds’ claims, but certified the
disposition as a final judgment under Fed. R. Civ. P. 54(b). The parties are
familiar with the facts, so we do not repeat them here. We have jurisdiction under
28 U.S.C. § 1291, and we affirm.
At issue on appeal is the district court’s interpretation of the Wampolds’
insurance agreement with Safeco. The agreement language reads in relevant part:
“If a claim is made or a suit is brought against any insured for damages because of
. . . property damage caused by an occurrence to which this coverage applies, we
will . . . pay up to our limit of liability for the damages for which the insured is
legally liable.” The district court determined that there were several elements of
the Wampolds’ claim for indemnification of costs spent on stabilization work
required by the City of Mercer that brought it outside of the coverage provided for
by their insurance agreement. The Wampolds challenge each of these
determinations on appeal.
Even if we assume without deciding that the district court erred when it
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determined that the actions by the City of Mercer were a “claim” against the
Wampolds, that the expenses incurred by the Wampolds to comply with the city
were “damages,” and that the Wampolds were “legally liable” for those expenses,
the district court did not err in granting partial summary judgment because those
damages were not “because of . . . property damage.”
The Wampolds argue that the relevant “property damage” at issue was the
damage done to a home downhill. But the purpose of the stabilization work
required by the city’s “red tag” and “yellow tag” of the Wampolds’ home was to
ensure that the home was stabilized and safe for occupancy and to decrease the risk
of future destabilization of the hillside. This is the difference between required
remediation resulting from an occurrence and measures to prevent future damage
before it has occurred. See Olds-Olympic, Inc. v. Comm. Union Ins. Co., 918 P.2d
923, 930 (Wash. 1996).
The Wampolds point to Boeing Co. v. Aetna Casualty and Surety Co. to
support their argument that “because of . . . property damage” includes remedial
measures taken after property damage has occurred. 784 P.2d 507, 516 (Wash.
1990) (“[C]osts owing because of property damages are remedial measures taken
after pollution has occurred, but preventive measures taken before pollution has
occurred are not costs incurred because of property damage.”). The stabilization
wall required by the city’s red tag was not remedial, but instead prophylactic, and
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aimed at preventing future damage to both the Wampolds’ home and neighboring
properties. Because the red tag required by the city was a preventative measure to
ensure that future damage would not result from further destabilization of the
hillside, it was not “because of . . . property damage.”
AFFIRMED.
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