Raelene Galusha v. Unigard Ins. Co.

• Court: Court of Appeals for the Ninth Circuit
• Decided: August 13, 2020
• Docket: 19-16396
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS AUG 13 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

RAELENE GALUSHA; GREG No. 19-16396 GALUSHA, D.C. No. 4:18-cv-06905-SBA Plaintiffs-Appellants,

v. MEMORANDUM*

UNIGARD INSURANCE COMPANY,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Saundra B. Armstrong, District Judge, Presiding

Submitted August 11, 2020** San Francisco, California

Before: GRABER and BRESS, Circuit Judges, and DAWSON,*** District Judge.

Ralene and Greg Galusha appeal the district court’s dismissal under Federal

Rule of Civil Procedure 12(b)(6) of the Galushas’ breach of contract and related

* 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 Robert T. Dawson, United States District Judge for the Western District of Arkansas, sitting by designation. claims against Unigard Insurance Co. We have jurisdiction under 28 U.S.C. § 1291.

Reviewing de novo the district court’s dismissal under Rule 12(b)(6), see Biltmore

Assocs., LLC v. Twin City Fire Ins. Co., 572 F.3d 663, 668 (9th Cir. 2009), we affirm.

After the Galushas’ home was destroyed in a wildfire, the Galushas chose to

rebuild at a new location rather than at the insured premises. Under the terms of

their homeowners insurance policy with Unigard, the Galushas were entitled to “the

smallest of the following amounts”—(1) the policy limit ($568,458), (2) the

replacement cost of the insured premises ($494,600.35), or (3) the Galushas’ actual

expenditures in replacing their home ($378,972). When Unigard reimbursed the

Galushas for their actual expenditures of $378,972, it therefore complied with the

insurance policy.

The district court correctly determined that the Galushas were not entitled to

the replacement costs of the insured premises ($494,600.35) under the 2005 version

of California Insurance Code section 2051.5(c), which was in effect when the

Galushas purchased their insurance policy. That provision prevents insurers from

“limit[ing] or den[ying] payment of the replacement cost in the event the insured

decides to rebuild or replace the property at a location other than the insured

premises.” Cal. Ins. Code. § 2051.5(c) (2005). It also states that the measure of a

replacement cost indemnity “shall be based upon the replacement cost of the insured

property and shall not be based upon the cost to repair, rebuild, or replace at a

2 location other than the insured premises.” Id.

Contrary to the Galushas’ interpretation, section 2051.5(c) does not state that

an insured is entitled to replacement costs; it merely defines how to calculate that

measure of indemnity when that is the appropriate measure of recovery. Nothing in

section 2051.5(c) prevented Unigard from limiting the Galushas’ reimbursement to

their actual expenditures, as set forth in the homeowners insurance policy. See

Conway v. Farmers Home Mut. Ins. Co., 26 Cal. App. 4th 1185, 1190 (Cal. Ct. App.

1994) (explaining that an actual expenditures indemnity “limit[s] recovery to the

amount the insured spent on repair or replacement” and thus “disallow[s] an insured

from recovering, in replacement cost proceeds, any amount other than that actually

expended” (quotations omitted)).

AFFIRMED.