Ausmus v. Lexington Ins. Co., 020911 FED9, 09-55831

Docket Nº:09-55831, 09-56137
Party Name:BRADLEY D. AUSMUS and ELIZABETH A. AUSMUS, Plaintiffs-Appelants, v. LEXINGTON INSURANCE COMPANY; AMERICAN INTERNATIONAL GROUP, INC. DOES 1-100, INCLUSIVE Defendants-Appellees.
Judge Panel:Before: GOODWIN and RAWLINSON, Circuit Judges, and ZOUHARY, District Judge.
Case Date:February 09, 2011
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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BRADLEY D. AUSMUS and ELIZABETH A. AUSMUS, Plaintiffs-Appelants,

v.

LEXINGTON INSURANCE COMPANY; AMERICAN INTERNATIONAL GROUP, INC. DOES 1-100, INCLUSIVE Defendants-Appellees.

Nos. 09-55831, 09-56137

United States Court of Appeals, Ninth Circuit

February 9, 2011

NOT FOR PUBLICATION

Argued and Submitted November 3, 2010 Pasadena, California

Appeal from the United States District Court for the Southern District of California M. James Lorenz, District Judge, Presiding, D.C. No. 3:08-cv-2342-L-LSP.

Before: GOODWIN and RAWLINSON, Circuit Judges, and ZOUHARY, District Judge. [**]

MEMORANDUM [*]

This is an insurance coverage dispute filed by Bradley and Elizabeth Ausmus (the "Ausmuses") against Lexington Insurance Company and American International Group, Inc. (collectively "Lexington"). (AIG was the parent company of Lexington.) The Ausmues are seeking insurance coverage for defective work performed by a contractor, a Lexington insured. The district court dismissed the Complaint pursuant to Federal Civil Rule 12(b)(6), finding the claims were barred by one of the policy exclusions. A later Motion to Vacate Judgment was denied.

The district court concluded the policy exclusion was (a) plain, clear and conspicuous, and (b) the insurer was not required to provide its insured with advance notice of the reduction in coverage. The district court also concluded that the Ausmuses failed to raise their California common law argument in opposition to the Motion to Dismiss, thereby waiving that argument in their later Motion to Vacate Judgment.

This court reviews de novo a district court's grant of a Rule 12(b)(6) motion to dismiss, Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005), and the denial of a motion under Rule 59(e) to alter or amend the judgment for an abuse of...

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