CALIBER ONE v. CAREY
The Ninth Circuit Court of Appeals today released an opinion in CALIBER ONE v. CAREY, No. 04-35181, a diversity appeal. The panel consisted of J. Clifford Wallace, Kim McLane Wardlaw and Raymond C. Fisher, Circuit Judges.
FISHER, Circuit Judge:
This case arises from a commercial property insurance policy Plaintiff-Appellee Caliber One Indemnity Company (”Caliber One”) issued to the Defendant Wade Cook Financial Corporation (”Cook”). Cook — through its trustee Diana K. Carey — appeals the district court’s summary judgment under Washington law that the insurance contract between Cook and Caliber One limited earthquake coverage to $500,000, subject to a deductible calculated as a percentage of the total insured value of the property affected by an earthquake rather than of the claimed earthquake loss. Cook also appeals the district court’s refusal to consider affidavits submitted in connection with its motion for reconsideration. We affirm in part and reverse in part. BACKGROUND In 1998, Cook purchased a comprehensive commercial property insurance policy from Caliber One that, among its various terms and conditions, provided $5 million in earthquake coverage for various buildings Cook owned. In 1999, Cook — through its insurance broker, Crump Insurance Services, Inc. (”Crump”) — told Caliber One that Cook wanted to renew the policy “under exactly the same terms” as the initial 1998 policy. Contrary to Cook’s asserted intent and apparently unbeknownst to it, the 1999-2000 policy Caliber One issued and Cook accepted contained only a $500,000 sublimit for earthquake coverage. Caliber One acknowledges that the reduction in earthquake coverage from $5 million to $500,000 . . .
WARDLAW, Circuit Judge, concurring in part and dissenting in part:
I agree that the mutual mistake doctrine is applicable, the contract should be reformed, and that the district court properly excluded Cook’s affidavits. However, I dissent because both the district court and the majority have erred by using extrinsic evidence to create ambiguity where none exists. Nothing in the policy language supports the majority’s view that “5.00% deductible” meant a percentage of the total insured value (”TIV”) of properties affected by the earthquake, or that the TIV would be adjusted during the policy term for appreciation or depreciation of the covered properties. This is a diversity action, which requires us to apply Washington State’s law. When interpreting insurance contracts, “[t]he pertinent rules are simple enough. If the policy language is clear and unambiguous, the court may not modify the contract or create an ambiguity where none exists.” E-Z Loader Boat Trailers, Inc. v. Travelers Indem. Co., 726 P.2d 439, 443 (Wash. 1986). Here, the insurance policy expressed the deductible in terms of a percentage per occurrence. The policy does not expressly define “deductible.” Under Washington law, “[w]e give undefined terms in a policy their popu. . .