The Upper Deck Company, Llc, a Delaware Limited Liability Company v. Federal Insurance Company, an Indiana Corporation

358 F.3d 608 The UPPER DECK COMPANY, LLC, a Delaware limited liability Company, Plaintiff-Appellant, v. FEDERAL INSURANCE COMPANY, an Indiana Corporation, Defendant Appellee. No. 02-56081. United States Court of Appeals, Ninth Circuit. Argued and Submitted November 4, 2003 — Pasadena, California. Filed January 12, 2004. COPYRIGHT MATERIAL OMITTED Gary W. Osborne, Osborne & Nesbitt, San Diego, CA, for the plaintiff-appellant. Peter Abrahams, Horvitz & Levy, Encino, CA, for the defendant-appellee. Appeal from the United States District Court for the Southern District of California Rudi M. Brewster, District Judge, Presiding, D.C. No. CV-01-01413-RMB. Before: BRIGHT, * O'SCANNLAIN, and McKEOWN, Circuit Judges. Opinion by Judge McKeown. Concurrence by Judge Bright. OPINION McKEOWN, Circuit Judge: 1 We consider here the scope of an insurer's duty to defend a lawsuit on the basis of an unpled theory of recovery and damages. This case arises out of a lawsuit brought against the Upper Deck Company ("Upper Deck") for violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968 , and various gambling laws for randomly…

We consider here the scope of an insurer’s duty to defend a lawsuit on the basis of an unpled theory of recovery and damages. This case arises out of a lawsuit brought against the Upper Deck Company (“Upper Deck”) for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968 , and various gambling laws for randomly inserting valuable cards into the packages of its entertainment and sports cards. Upper Deck tendered this litigation to Federal Insurance Company (“Federal”) under insurance policies covering claims for bodily injury arising out of an accident. Federal rejected the tender on the grounds that there was no accident or occurrence as required under the policy.

Upper Deck then filed suit against Federal for breach of contract and declaratory relief. Upper Deck claimed that, although the lawsuit was styled as a RICO suit, it could have been construed or amended to assert damages for personal injury to children as a result of a gambling addiction. On cross motions for summary judgment, the district court denied Upper Deck’s motion and granted Federal’s motion. We affirm. Federal had no duty to defend under the policies because…

concurring' specially:

I concur in the result but do so on the basis of the well-reasoned opinion of the district judge in this case. Upper Deck Co. v. Federal Ins. Co., No. CIV. 01 CV1413-B, 298 F.Supp.2d 994 , 2002 WL 32344339 (S.D.Cal.2002).

In essence, the district judge determined that the insurer in this case was not obligated to defend the three separate lawsuits because Upper Deck, which has the burden to show the policy covers any legal action, has failed to provide facts that show a possibility that the underlying plaintiffs’ injuries were caused by an occurrence (or accident). Id., at 8, 298 F.Supp.2d at 998 , 2002 WL 32344339 .

The district court concluded that on the evidence provided to the court Upper Deck could not show that “it possibly did not expect or intend that its customers would become ‘hooked’ or in the ‘habit’ of buying its deck of cards.” Id., at 9, 298 F.Supp.2d at 1003 , 2002 WL 32344339 .

Based on the record and the reasoning of the district court, I agree that this case should be affirmed. I repeat the conclusion of the district court:

Id., at 12, 298 F.Supp.2d at 1003 , 2002 WL 32344339 . The district court properly ruled that no duty to defend…