J.R. Maffei Richard Maffei Betty J. Maffei v. Northern Insurance Company of New York Maryland Casualty Co.

12 F.3d 892 J.R. MAFFEI; Richard Maffei; Betty J. Maffei, Plaintiffs-Appellants, v. NORTHERN INSURANCE COMPANY OF NEW YORK; Maryland Casualty Co., Defendants-Appellees. No. 92-15651. United States Court of Appeals, Ninth Circuit. Argued and Submitted Oct. 7, 1993. Decided Dec. 27, 1993. Philip Borowsky and Dennis Kruszynski, Cartwright, Slobodin, Bokelman, Borowsky, Wartnick, Moore & Harris, San Francisco, CA, for plaintiffs-appellants. Roxanne L. Holmes, Bronson, Bronson & McKinnon, San Francisco, CA, for defendants-appellees. Appeal from the United States District Court for the Northern District of California. Before: HUG, Jr., FARRIS and BRUNETTI, Circuit Judges. HUG, Circuit Judge: 1 This is an action by an insured, J.R. Maffei, against the two defendant insurance carriers for breach of contract, bad faith, and declaratory relief. The action was originally filed in state court, but then was removed by the defendants on the basis of diversity of citizenship, pursuant to 28 U.S.C. Sec. 1441 . The primary issue in this case is whether a discharge of sulfur dioxide resulted from a fire in a drum of sodium hydrosulfite or from a non-fire-related chemical reaction in the…

dissenting:

I dissent because Dr. Clark’s declaration did not provide evidence that a fire took place in the drum.

We may affirm the district court’s decision on any grounds supported in the record even if the district court reached its decision for different reasons. See United States v. Washington, 969 F.2d 752, 755 (9th Cir.1992) cert. denied, — U.S. -, 113 S.Ct. 1945 , 123 L.Ed.2d 651 (1993); Lofton v. Heckler, 781 F.2d 1390 (9th Cir.1986). Assuming ar-guendo that the majority has correctly concluded that the expert testimony was improperly struck, Maffei has failed to allege that a fire took place in the drum within the meaning of the hostile fire exception. We should therefore affirm the granting of summary judgment.

The district court correctly held that the parties contemplated the term “fire” would be defined in its “ordinary and popular sense.” AIU Ins. Co. v. Superior Court, 51 Cal.3d 807 , 274 Cal.Rptr. 820, 831 , 799 P.2d 1253 (1990). Under California law, “if the meaning a layperson-would ascribe to contract language is not ambiguous,” that meaning should be applied. Id. The district court defined fire as “oxidation rapid enough to produce heat and light.”…

This is an action, by an insured, J.R. Maf-fei, against the two defendant insurance carriers for breach of contract, bad faith, and declaratory relief. The action was originally filed in state court, but then was removed by the defendants on the basis of diversity of citizenship, pursuant to 28 U.S.C. § 1441 . The primary issue in this case is whether a discharge of sulfur dioxide resulted from a fire in a drum of sodium hydrosulfite or from a non-fire-related chemical reaction in the drum. The insurance policies of J.R. Maffei, Richard Maffei, and Betty J. Maffei (“Maf-fei”), underwritten by Northern Insurance of New York and Maryland Casualty Insurance Company, Defendants-Appellees, cover “hostile fires,” but exclude other pollution claims.

The insurance companies refused to defend Maffei in several state court lawsuits for personal injury and property damage, which were brought against Maffei by third parties who alleged injury from exposure to sulfur dioxide smoke emitted from a drum of material stored adjacent to Maffei’s warehouse in Berkeley. Maffei contends that the district court erred by striking the testimony of Maf-fei’s fire and insurance experts, by placing the…