Michael Wampold v. Safeco Ins. Co.

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 9, 2020
• Docket: 19-35972
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 9 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT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

2 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

3 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.