Blue Ridge Ins. Co. v. Stanewich

• Decision Date: 24 April 1998
• Docket Number: No. 96-55839,96-55839
• Citation: 142 F.3d 1145
• Parties: 98 Cal. Daily Op. Serv. 3078, 98 Daily Journal D.A.R. 4241 BLUE RIDGE INSURANCE CO., a Maryland corporation, Plaintiff-Appellee, v. Kathy STANEWICH, et al., Defendants, and Donald Van Ort; Helen Van Ort, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1145

142 F.3d 1145

98 Cal. Daily Op. Serv. 3078, 98 Daily Journal

D.A.R. 4241

BLUE RIDGE INSURANCE CO., a Maryland corporation, Plaintiff-Appellee, v. Kathy STANEWICH, et al., Defendants and Donald Van Ort; Helen Van Ort, Defendants-Appellants.

No. 96-55839.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 8, 1997.

Decided April 24, 1998.

Paul J. O'Rourke, Jr., McCormick, Barstow, Sheppard, Wayte & Carruth, Fresno, California, for plaintiff-appellee.

Dwight F. Ritter, San Diego, California, for defendants-appellants.

Appeal from the United States District Court for the Southern District of California; Irma E. Gonzalez, District Judge, Presiding. D.C. No. CV 93-1173 IEG.

Before: REINHARDT and TASHIMA, Circuit Judges, and SHADUR, District Judge. ^*

TASHIMA, Circuit Judge:

Donald Van Ort and his grandmother, Helen Van Ort (the Van Orts), appeal the district court's grant of summary judgment to Blue Ridge Insurance Company (Blue Ridge). The district court held that Blue Ridge had no duty to indemnify or defend Kathy Stanewich, administratrix of the Estate of Michael Stanewich, in the underlying civil rights/tort action brought by the Van Orts. We affirm.

BACKGROUND

The undisputed facts are as follows. In 1991, Michael Stanewich, a detective with the San Diego County Sheriff's Department, led a narcotics search of the Van Ort home. The officers did not find any illegal drugs or contraband. During the search, Stanewich learned that the Van Orts kept over $100,000 in cash and other valuables in a safe. Approximately a month later, Stanewich, wearing a stocking mask over his head and with his gun drawn, returned to the Van Ort home and forced his way into the house. Stanewich pushed Donald Van Ort onto the kitchen floor, hog-tied him, placed a pillow case over his head, and tied a rope around his head. Stanewich forced Helen Van Ort into a squatting position in the kitchen corner. Stanewich demanded that Donald Van Ort tell him the safe combination and, after Donald Van Ort refused, Stanewich began pouring lighter fluid on him. Stanewich also punched, kicked, and placed his hands over Donald Van Ort's face until he lost consciousness. Stanewich then forced Helen Van Ort into the living room, placed a cloth in her mouth and threatened to shoot her. Stanewich asked Helen Van Ort for the safe combination and pricked her with a syringe filled with lighter fluid after she refused to give Stanewich the number.

Meanwhile, Donald's girlfriend managed to get out of the house and called for help. When a police officer arrived at the Van Ort home, he found Stanewich pouring lighter fluid on Donald Van Ort. The officer shot and killed Stanewich.

The Van Orts sued the County of San Diego, the County Sheriff's Department, and the Estate of Michael Stanewich in federal district court. The jury awarded the Van Orts $850,000: $170,000 against the Estate of Michael Stanewich and $680,000 against the County. The district court granted the County's motion for judgment as a matter of law and amended the judgment so that 100 percent of the award was against the Estate of Michael Stanewich. We affirmed, but limited the judgment to the Estate's available insurance coverage because the Van Orts failed to file a probate claim with the Estate. See Van Ort v. Estate of Stanewich, 92 F.3d 831, 841-42 (9th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 950, 136 L.Ed.2d 837 (1997).

Michael Stanewich and his wife, Kathy Stanewich, had purchased a homeowners insurance policy from Blue Ridge which was in

                effect during the attempted robbery.  The policy provided personal liability coverage for Michael Stanewich and Kathy Stanewich, separately, up to $300,000 per "occurrence."   The policy defined an "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in:  a. bodily injury;  or b. property damage."   The policy also contained an exclusion for "bodily injury ... which is expected or intended by the insured."   Blue Ridge defended Kathy Stanewich, as administratrix of the Estate of Michael Stanewich, throughout the underlying civil rights/tort action under a reservation of rights.  In this action, Blue Ridge sued for a declaratory judgment that it had no duty to defend further or to indemnify the Estate in the Van Orts' suit.  The district court granted summary judgment in favor of Blue Ridge, and the Van Orts appeal.  We have jurisdiction under 28 U.S.C. § 1291
                

STANDARD OF REVIEW

A grant of summary judgment is reviewed de novo. Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir.), cert. denied, --- U.S. ----, 118 S.Ct. 559, 139 L.Ed.2d 401 (1997). Viewing the evidence in the light most favorable to the nonmoving party, we must determine if there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Id. If the factual context makes the non-moving party's claim of a disputed fact implausible, then that party must come forward with more persuasive evidence than otherwise would be necessary to show that there is a genuine issue for trial. California Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir.1987).

The meaning and construction of an insurance policy is a question of law reviewed de novo. HS Servs., Inc. v. Nationwide Mut. Ins. Co., 109 F.3d 642, 644 (9th Cir.1997). Words used in an insurance policy are to be interpreted according to the plain meaning that a layperson would attach to them. Reserve Ins. Co. v. Pisciotta, 30 Cal.3d 800, 807, 180 Cal.Rptr. 628, 640 P.2d 764 (1982). A policy is ambiguous if it is capable of two or more reasonable constructions. Producers Dairy Delivery Co. v. Sentry Ins. Co., 41 Cal.3d 903, 912, 226 Cal.Rptr. 558, 718 P.2d 920 (1986). Any ambiguities are to be resolved against the insurer. Reserve Ins. Co., 30 Cal.3d at 807, 180 Cal.Rptr. 628, 640 P.2d 764.

DISCUSSION

A. District Court Jurisdiction

On appeal, both the Van Orts and Blue Ridge asserted that the basis of the district court's jurisdiction over this declaratory judgment action was federal question jurisdiction under 28 U.S.C. § 1331, because the underlying civil rights/tort action included a federal claim arising under 42 U.S.C. § 1983. Because this was obviously incorrect, see Berg v. Leason, 32 F.3d 422 (9th Cir.1994), we raised sua sponte the issue of the district court's subject matter jurisdiction. See Continental Airlines, Inc. v. Goodyear Tire & Rubber Co., 819 F.2d 1519, 1522-23 (9th Cir.1987) (appellate court required to consider apparent jurisdictional defect sua sponte ).

In its complaint, Blue Ridge alleged diversity of citizenship jurisdiction, but its jurisdictional allegations were deficient. Although it alleged its own citizenship and that of the Van Orts, ¹ there was no allegation of the citizenship of the decedent, Michael Stanewich, or of the representative of his estate, Kathy Stanewich. ² We, therefore, directed "Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." 28 U.S.C. § 1653. See also Luehrs v. Utah Home Fire Ins. Co., 450 F.2d 452, 454 (9th Cir.1971). "In order to avoid dismissal for lack of subject matter jurisdiction, the plaintiff must enlarge the record to show the citizenship of each party as of the date that the complaint was filed." Dausch v. Rykse, 9 F.3d 1244, 1245 (7th Cir.1993). A plaintiff may be required to submit additional affidavits with respect to the citizenship of the parties to the appellate court. Id.; Canedy v. Liberty Mut. Ins. Co., 126 F.3d 100, 103 (2nd Cir.1997).

the parties "to supplement the record regarding their status for purposes of diversity jurisdiction."

The certifications of citizenship under penalty of perjury, filed pursuant to the court's order, now show that complete diversity of citizenship existed between the plaintiff and the defendants at the time the complaint was filed: Blue Ridge was incorporated in Maryland with its principal place of business in Texas. The Van Orts, Michael Stanewich and the County of San Diego were citizens of California. No party has contested the representations in the certifications or suggested that the district court did not have jurisdiction. We are now satisfied, on the basis of the record, as supplemented by the certifications of citizenship, that the district court had diversity jurisdiction over this action. As the "defect may be cured by amendment and nothing is to be gained by sending the case back for that purpose," Realty Holding Co. v. Donaldson, 268 U.S. 398, 400, 45 S.Ct. 521, 521-22, 69 L.Ed. 1014 (1925), we deem the pleadings amended and the jurisdictional defect cured. ³ Canedy, 126 F.3d at 103. Because this is a diversity case, we apply California law. HS Servs., 109 F.3d at 644.

B. The Merits

The Van Orts claim that the district court erred in finding that there was no "occurrence" which triggered Blue Ridge's duty to indemnify Stanewich. The policy, which provides indemnification for injury caused by an "occurrence," defines "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. bodily injury; or b. property damage." The insured has the burden of showing that there was an occurrence. See Interinsurance Exch. of the Auto. Club v. Flores, 45 Cal.App.4th 661, 668, 53 Cal.Rptr.2d 18 (1996) (citing Waller v. Truck Ins. Exch., Inc., 11 Cal.4th 1, 16, 44 Cal.Rptr.2d 370, 900 P.2d 619 (1995)). Therefore, the Estate or, in this case, the Van Orts have the burden of showing that liability resulted from an "accident."

The term "accident" is not defined in the insurance policy. In Hogan v. Midland Nat'l Ins. Co., 3 Cal.3d 553, 91 Cal.Rptr. 153, 476 P.2d 825 (1970), the California Supreme Court defined...