Caliber One Indemnity Company, a Foreign Corporation v. Wade Cook Financial Corporation, a Foreign Corporation, and Diana K. Carey, Trustee-Appellant

491 F.3d 1079 CALIBER ONE INDEMNITY COMPANY, a foreign corporation, Plaintiff-Appellee, v. WADE COOK FINANCIAL CORPORATION, a foreign corporation, Defendant, and Diana K. Carey, Trustee-Appellant. No. 04-35181. United States Court of Appeals, Ninth Circuit. Argued and Submitted July 27, 2006. Filed June 22, 2007. H. Troy Romero and Michael E. Wiggins (argued), Romero Montague P.S., Bellevue, WA, for appellant Wade Cook Financial Corporation. William A. Pelandini (argued), Melissa O'Loughlin White and Thomas J. Braun, Cozen O'Connor, Seattle, WA, for appellee Caliber One Indemnity Company. Appeal from the United States District Court for the Western District of Washington; John C. Coughenour, Chief District Judge, Presiding. D.C. No. CV-01-01128-JCC. Before: J. CLIFFORD WALLACE, KIM McLANE WARDLAW and RAYMOND C. FISHER, Circuit Judges. Opinion by Judge FISHER; Partial Concurrence and Partial Dissent by Judge WARDLAW. FISHER, Circuit Judge: 1 This case arises from a commercial property insurance policy Plaintiff-Appellee Caliber One Indemnity Company ("Caliber One") issued to the Defendant Wade Cook Financial Corporation ("Cook"). Cook — through its trustee Diana K. Carey…

Opinion by Judge FISHER; Partial Concurrence and Partial Dissent by Judge WARDLAW.

This case arises from a commercial property insurance policy Plaintiff-Appel-lee Caliber One Indemnity Company (“Caliber One”) issued to the Defendant Wade Cook Financial Corporation (“Cook”). Cook — through its trustee Diana K. Carey — appeals the district court’s summary judgment under Washington law that the insurance contract between Cook and Caliber One limited earthquake coverage to $500,000, subject to a deductible calculated as a percentage of the total insured value of the property affected by an earthquake rather than of the claimed earthquake loss. Cook also appeals the district court’s refusal to consider affidavits submitted in connection with its motion for reconsideration. We affirm in part and reverse in part.

Background

In 1998, Cook purchased a comprehensive commercial property insurance policy from Caliber One that, among its various terms and conditions, provided $5 million in earthquake coverage for various buildings Cook owned. In 1999, Cook— through its insurance broker, Crump Insurance Services, Inc. (“Crump”) — told Caliber One that Cook wanted to renew the policy “under…

concurring in part and dissenting in part:

I agree that the mutual mistake doctrine is applicable, the contract should be reformed, and that the district court properly excluded Cook’s affidavits. However, I dissent because both the district court and the majority have erred by using extrinsic evidence to create ambiguity where none exists. Nothing in the policy language supports the majority’s view that “5.00% deductible” meant a percentage of the total insured value (“TIV”) of properties af *1086 fected by the earthquake, or that the TIV would be adjusted during the policy term for appreciation or depreciation of the covered properties.

This is a diversity action, which requires us to apply Washington State’s law. When interpreting insurance contracts, “[t]he pertinent rules are simple enough. If the policy language is clear and unambiguous, the court may not modify the contract or create an ambiguity where none exists.” E-Z Loader Boat Trailers, Inc. v. Travelers Indem. Co., 106 Wash.2d 901 , 726 P.2d 439, 443 (1986). Here, the insurance policy expressed the deductible in terms of a percentage per occurrence. The policy does not expressly define “deductible.” Under Washington…