James Lee Construction, Inc. v. Geico

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 17, 2023
• Docket: 22-35102
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 17 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JAMES LEE CONSTRUCTION, INC., a No. 22-35102 Montana Corp.; JAMES B. LEE; TRACY D. LEE, husband and wife, D.C. No. 9:20-cv-00068-DWM

Plaintiffs-Appellants, MEMORANDUM* v.

GOVERNMENT EMPLOYEES INSURANCE COMPANY, a corporation; GEICO GENERAL INSURANCE COMPANY, a corporation; GEICO INDEMNITY COMPANY, a corporation; GEICO CASUALTY COMPANY,

Defendants-Appellees.

Appeal from the United States District Court for the District of Montana Donald W. Molloy, District Judge, Presiding

Argued and Submitted December 8, 2022 Seattle, Washington

Before: O’SCANNLAIN, McKEOWN, and MILLER, Circuit Judges.

Plaintiffs James Lee Construction, Inc., and James and Tracy Lee (“Lee

Plaintiffs”) sought to represent a putative class challenging the subrogation practices

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. of Defendants Government Employees Insurance Company, GEICO General

Insurance Company, GEICO Indemnity Company, and GEICO Casualty Company

(“GEICO Defendants”). The district court dismissed the Lee Plaintiffs’ claims, and

the Lee Plaintiffs appealed that dismissal. As the facts are known to the parties, we

repeat them only as necessary to explain our decision. We affirm.

I

We start by clarifying what is at issue in this appeal. The Lee Plaintiffs

purport only to advance claims and arguments for declaratory relief—not for

damages. See, e.g., Oral Arg. at 2:59-3:13 (conceding that the Lee Plaintiffs are only

seeking declaratory relief); see also, e.g., Blue Br. 29 (disclaiming UTPA damages);

Blue Br. 41 (conceding unavailability of contract damages). Accordingly, whatever

the requirements of Montana’s “made whole” rule governing subrogation and the

relevance of those requirements to a claim for damages, see, e.g., Van Orden v.

United Servs. Auto Ass’n, 318 P.3d 1042 (Mont. 2014), the sole question presented

on appeal—and the only issue we need decide—is whether the district court erred in

dismissing the Lee Plaintiffs’ claims for declaratory relief. See, e.g., Currier v.

Potter, 379 F.3d 716, 723 n.4 (9th Cir. 2004); Carmickle v. Comm’r, Soc. Sec.

Admin., 533 F.3d 1155, 1161 n.2 (9th Cir. 2008); see also Greenwood v. F.A.A., 28

F.3d 971, 977 (9th Cir. 1994).

2 II

The Montana Unfair Trade Practices Act—at least as we read the statute, see,

e.g., Bateman v. Nat’l Union Fire Ins. Co. of Pittsburgh, 423 F. App’x 763, 766 (9th

Cir. 2011) (following Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938))—does

not permit the Lee Plaintiffs’ claims for declaratory relief. See Mont. Ann. Code §

33-18-242(3) (“An insured who has suffered damages as a result of the handling of

an insurance claim may bring an action against the insurer for breach of the insurance

contract, for fraud, or pursuant to this section, but not under any other theory or cause

of action.”). First, the Lee Plaintiffs’ suit—which challenges the GEICO

Defendants’ subrogation practices—seeks relief for injuries resulting from “the

handling of an insurance claim.” Mont. Ann. Code § 33-18-242(3); see also, e.g.,

Johnson v. Mont. Eleventh Jud. Dist., No. 21-OP-0472, 2021 WL 5088743, at *2

(Mont. 2021). Second, the Lee Plaintiffs’ claims for declaratory relief—which seek,

inter alia, a declaration that the GEICO Defendants have failed to ensure that their

insureds are “made whole” prior to subrogation, see, e.g., Blue Br. 54; E.R. 42—

cannot proceed because, whatever other infirmities might plague the operative

claims, see, e.g., E.R. 10-15, such declaratory relief is not a permissible “theory or

cause of action” allowed under the Montana law applicable here. Mont. Ann. Code

§ 33-18-242(3); see, e.g., Bateman, 423 F. App’x at 766; Byorth v. USAA Cas. Ins.

Co., No. 17-CV-153-M-KLD, 2019 WL 6715970, at *2-5 (D. Mont. Dec. 10, 2019);

3 Woodman v. Standard Ins. Co., No. 20-CV-153-M-KLD, 2021 WL 927373, at *2-3

(D. Mont. Mar. 11, 2021).

AFFIRMED.