NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS APR 19 2021

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

BITCO GENERAL INSURANCE No. 20-35490

CORPORATION,

D.C. No. 4:18-cv-00087-BMM Plaintiff-Appellee,

v. MEMORANDUM*

J. BURNS BROWN OPERATING CO.,

Defendant-Appellant.

Appeal from the United States District Court for the District of Montana Brian M. Morris, District Judge, Presiding

Submitted April 14, 2021** Seattle, Washington

Before: O’SCANNLAIN, GRABER, and CALLAHAN, Circuit Judges.

J. Burns Brown Operating Co. appeals the district court’s grant of summary

judgment in BITCO General Insurance Corporation’s favor. At issue is whether

the umbrella insurance policy J. Burns purchased from BITCO covers pollution

* 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). costs that J. Burns incurred after one of its wells discharged oil and related

contaminants into a reservoir. The district court held that the policy bars coverage.

We have jurisdiction under 28 U.S.C. § 1291, and reviewing de novo, AXIS

Reinsurance Co. v. Northrop Grumman Corp., 975 F.3d 840, 844 (9th Cir. 2020),

we affirm.1

The umbrella policy excludes coverage for pollution-caused property

damage, with one exception: The exclusion does not apply if J. Burns possesses

“underlying insurance” for pollution costs “at the limits shown in the schedule of

underlying insurance.” That schedule, in turn, lists a $1 million each-occurrence

limit on J. Burns’s primary policy, but the primary policy provides only $100,000

in pollution coverage. So while J. Burns’s “underlying insurance” does cover

some of the company’s cleanup costs, it does not do so at the requisite limits.

Accordingly, the narrow exception to the pollution exclusion does not apply, and

the umbrella policy bars coverage. See Performance Mach. Co. v. Yellowstone

Mountain Club, LLC, 169 P.3d 394, 403 (Mont. 2007) (“Where the language of a

contract is unambiguous, the duty of the court is to apply [it] as written.”).

J. Burns concedes that this view is reasonable but argues that the policy is

ambiguous. We disagree. Contrary to the company’s contention, a reasonable

policyholder would understand the need to have $1 million in pollution coverage.

1 We grant J. Burns’s request for judicial notice. See Fed. R. Evid. 201(d).

2 The language about the primary policy’s limits applying “whether or not such is

collectible” means only that the umbrella policy will not drop down if J. Burns

recovers less than the primary policy’s $1 million limit, which comports with the

way umbrella policies typically work. See 15 Couch on Ins. § 220:34 (3d ed.

2020). This language cannot reasonably be read as negating the requirement that J.

Burns have a certain level of pollution coverage. If that were the case, the

exception would always apply, and the exclusion would be superfluous. See

Mont. Petro. Tank Release Comp. Bd. v. Crumleys, Inc., 174 P.3d 948, 957 (Mont.

2008) (stressing that, “if possible,” courts must reconcile a policy’s “various parts

to give each meaning and effect” (internal quotation marks and citation omitted)).

J. Burns’s remaining arguments are likewise unavailing. Although a “follow

form” policy typically provides the same coverage as an underlying one, the term

carries little weight here. It appears only in the exclusion’s title, and a reasonable

policyholder would not construe “POLLUTION EXCLUSION–FOLLOW FORM”

as providing pollution coverage based solely on the latter two words. Finally,

because the exclusion is unambiguous, we reject J. Burns’s argument that, as an

oil-and-gas company, it could reasonably expect BITCO, an oil-and-gas insurer, to

cover its pollution costs. See id. at 958 (“[A] policyholder’s expectations which

are contrary to a clear exclusion from coverage are not objectively reasonable.”

(internal quotation marks and citation omitted)).

3

AFFIRMED.

4