Darryn Begun v. Scottsdale Insurance Co.

MEMORANDUM

Darryn Begun, Jay R. Begun, Greg Tucker, and Conrad Hewitt (“Appellants”), former directors and officers of the now defunct Clickbooks.com, Inc., appeal the district court’s denial of their motion for summary judgment and grant of Scottsdale Insurance Company’s cross-motion. The central issue on appeal is whether a professional services exclusion in a Business and Management Indemnity Insurance Policy (the “Policy”) barred coverage for claims in the underlying action against Appellants. We have jurisdiction under 28 U.S.C. § 1291 , and we affirm.

We apply California law in this diversity suit. See Edgerly v. City & Cty. of S.F., 713 F.3d 976, 982 (9th Cir.2013). The duty to defend depends on whether the insurance policy in question potentially covers the alleged liability. See Gray v. Zurich Ins. Co., 65 Cal.2d 263, 275 , 54 Cal.Rptr. 104 , 419 P.2d 168 (1966). Appellants initially tendered their defense to Scottsdale during the pendency .of the underlying action against them. The district court properly found Scottsdale had no duty to defend at that time because the claims in the underlying action centered on Appellants’ personal failure, or their failure as the…