First One Lending Corp. v. Hartford Casualty Insurance Co.

MEMORANDUM

First One Lending Corporation and John Vescera (together, “First One”) appeal from the district court’s grant of summary judgment in favor of The Hartford Casualty Insurance Company (“Hartford”). The district court held that Hartford had no duty to defend First One in a lawsuit brought against it by the Neighborhood Assistance Corporation of America (“NACA”) because the complaint sought only restitution of ill-gotten gains, which are not insurable as a matter of public policy under California law. See, e.g., Bank of the W. v. Superior Court, 2 Cal.4th 1254, 10 Cal.Rptr.2d 538 , 833 P.2d 545, 553-54 (1992) (in bank). We have jurisdiction under 28 U.S.C. § 1291 . We review the district court’s order de novo, see, e.g., Trishan Air, Inc. v. Fed. Ins. Co., 635 F.3d 422, 426 (9th Cir, 2011), and we reverse.

“The California Supreme Court has stated that the insured is entitled to a defense if the underlying complaint alleges the insured’s liability for damages potentially covered under the policy, or if the complaint might be amended to give rise to a liability that would be covered under the policy.” Anthem Elecs., Inc. v. Pac. Emp’rs Ins. Co., 302 F.3d 1049, 1054 (9th…