Commercial Union Insurance Co. v. Richard Sponholz Ingrid Sponholz

Richard and Ingrid Sponholz appeal a declaratory judgment which determined that the marine insurance policy issued by Commercial Union Insurance Company did not cover loss of their trawler due to a defective title. We review grants of declaratory judgment de novo, United States v. State of Washington, 759 F.2d 1353, 1356-57 (9th Cir.1985) (per curiam en banc), and affirm.

The Sponholzes purchased a 43-foot trawler which they insured under a Commercial Union marine insurance policy. During the term of the policy, the trawler was confiscated by the police as a stolen vessel. The Sponholzes filed a claim with Commercial Union for the value of the trawler, which Commercial Union denied. Commercial Union then filed suit under 28 U.S.C. § 2201 , asking for declaratory relief.

The district court granted Commercial Union’s motion for summary judgment, ruling that the insurance policy was a casualty policy rather than a title policy. The Sponholzes counter that the phrase “all risks” as used in the policy must be interpreted broadly to cover any event that results in the Sponholzes not possessing the trawler.

The Sponholzes correctly observe that, in California, ambiguous or unclear…