NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS AUG 17 2023

FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

AMCO INSURANCE COMPANY, No. 22-55279 Plaintiff-Appellee, D.C. No. 2:20-cv-10360-JVS-SK v. CYNTHIA MCGRUDER, AKA Cynthia MEMORANDUM* Kiefer; DERON KIEFER, Defendants-Appellants, and CAMERON KIEFER; et al., Defendants.

Appeal from the United States District Court for the Central District of California James V. Selna, District Judge, Presiding Argued and Submitted March 8, 2023 Submission Vacated July 18, 2023 Resubmitted July 18, 2023** Pasadena, California Before: COLLINS, FORREST, and KOH, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** This case was originally argued and submitted to a panel consisting of Judges Kleinfeld, Watford, and Collins. After Judge Watford resigned from the court and Judge Kleinfeld became unavailable, Judges Forrest and Koh were drawn to replace them pursuant to General Order 3.2(h), and the submission to the prior panel was vacated. Judges Forrest and Koh have reviewed the briefs, record, and video recording of the prior oral argument. The reconstituted panel has unanimously concluded that this case is suitable for decision without further oral argument. See FED. R. APP. P. 34(a)(2)(C). Deron Kiefer and Cynthia McGruder, defendants in a declaratory judgment

action by AMCO Insurance Company (“AMCO”) to establish the liability limits of

an automobile insurance policy, appeal from the district court’s grant of summary

judgment to AMCO. We affirm.

I

This case arises from an unusual series of events. Kiefer is himself a

licensed insurance “broker/agent” and the owner of a small insurance agency

called “Gold Mountain Insurance Services, Inc.” Kiefer is married to Cynthia

McGruder, and they have a son named Cameron. It is undisputed that Kiefer, at

McGruder’s instruction, purchased an automobile insurance policy for his family

from AMCO. A copy of the policy is present in the record before us. To be more

precise, ten copies of that policy are present, dating from December 2017 through

April 2019. That is because Kiefer—an insurance professional with 34 years of

experience in the business—frequently updated the policy via an online portal

accessible to both Kiefer and AMCO, resulting in changes to various terms in the

policy. AMCO asserts that, each time Kiefer modified the policy online, AMCO

mailed a new copy of the modified policy to Kiefer and McGruder’s home address.

Every single one of the ten copies of the policy in the record before us is labeled

with Kiefer and McGruder’s home address, the accuracy of which the couple does

not dispute. Moreover, an AMCO representative filed a declaration under penalty

2 of perjury stating that updated copies of the policy were in fact mailed to that

address, as well as sent electronically to Kiefer’s company, Gold Mountain. All

ten copies of the policy in the record contain identical liability limits: $25,000 per

person and $50,000 per occurrence. We will refer to this as a “25/50” policy.

The policy’s liability limits present the central question in this appeal. The

parties’ dispute began when the couple and their son, Cameron, were sued based

on the allegation that Cameron “r[an] over” and then “back[ed] over” a high school

employee with the family’s AMCO-insured Mercedes Benz on February 8, 2019—

allegedly while the employee was attempting to prevent Cameron from “fleeing the

scene” after she witnessed him steal items from a concessions stand at a high

school basketball game. See First Amended Complaint, Solis v. Kiefer et al., 2020

WL 5991935, at ¶ 7 (Cal. Super. Ct. 2020). Kiefer and McGruder claimed

insurance coverage under their automobile insurance policy from AMCO. But

Kiefer insisted—despite all ten copies of the policy in the record listing identical

liability limits of $25,000/$50,000—that, when originally purchasing the policy

from AMCO, he had really selected liability limits ten times that high:

$250,000/$500,000.1 Specifically, Kiefer insisted that—when originally

1 On May 10, 2019—after the February 8, 2019 incident giving rise to the suit against the family—Kiefer requested (and was granted) increased liability limits to $250,000/$500,000. Kiefer concedes in his declaration that after he and McGruder were notified by AMCO, in “April or May, 2019,” that the relevant policy had

3 purchasing automobile insurance for his own family at McGruder’s request—he

went online and, via a “scroll down menu” listing various options for coverage,

“requested,” at McGruder’s direction, an automobile insurance policy from AMCO

with liability limits of $250,000/$500,000. According to Kiefer’s declaration

before the district court, “[t]here is absolutely no question in my mind that I

deliberately, purposefully, and actually selected the option of ‘250/500’, and not

‘25/50’.” AMCO responded that it had mailed him many copies of the policy, all

of which plainly listed the lower 25/50 limits; that Kiefer had frequently accessed

and modified the policy via the online portal, placing him on notice of the 25/50

limits; and that there was no evidence, other than Kiefer’s after-the-fact

declaration, that Kiefer had ever requested the higher 250/500 limits prior to the

February 2019 incident. In response, Kiefer claimed that he never saw any of the

mailed notices; alleged that he had never checked the policy’s liability limits,

online or otherwise; insisted that he had in fact “requested” a 250/500 policy from

the online scroll-down menu; and theorized that a technical error in AMCO’s

25/50 limits, he requested that the policy be changed to include higher limits of 250/500. The premium on the policy then increased accordingly: from $1,073.12 for the April 2019 version of the policy with lower limits to $1,632.28 for the May 2019 version of the policy with higher limits. In other words, Kiefer concedes that the May 2019 copy of the policy was not issued to him prior to the relevant February 2019 incident. The revised May 2019 policy is therefore irrelevant to our review, except in one respect: it confirms that, at the time of the relevant February 2019 incident, Kiefer was paying an insurance premium commensurate with the lower 25/50 limits, not the 250/500 limits.

4 internal computer system must have erroneously generated a 25/50 policy. Kiefer

claims that “I am the only witness to the fact that I requested liability limits of

$250,000/$500,000.”

AMCO brought this declaratory judgment action in federal court to establish

the true liability limits in Kiefer and McGruder’s policy. The district court granted

summary judgment to AMCO, and Kiefer and McGruder appeal.

II

We need not address the parties’ dispute regarding whether, as a factual

matter, Kiefer did (or did not) select the 250/500 policy on the online scroll-down

menu. Nor need we address the question whether Kiefer’s allegation on that score

is so implausible that a reasonable jury could not accept it. Cf. Scott v. Harris, 550

U.S. 372, 380 (2007) (“When opposing parties tell two different stories, one of

which is blatantly contradicted by the record, so that no reasonable jury could

believe it, a court should not adopt that version of the facts for purposes of ruling

on a motion for summary judgment.”). For the reasons we shall explain, we affirm

the district court’s grant of summary judgment regardless of which option Kiefer in

fact selected from the scroll-down menu, meaning that the issue is immaterial to a

proper resolution of this case. See FED. R. CIV. P. 56(a).

Regardless of whether Kiefer, as he claims in his declaration, indeed

“requested” the 250/500 higher liability limits on the scroll-down menu, there is no

5 dispute that AMCO did not actually issue him that policy. The policy AMCO

issued him was—Kiefer does not dispute—a 25/50 policy. There are many copies

of that policy in the record, and Kiefer does not claim that AMCO ever, prior to the

February 2019 incident, actually issued him a 250/500 policy. (Kiefer argues that

AMCO should have issued him a 250/500 policy when he clicked the correct

option on the scroll-down menu, not that AMCO actually did issue him a 250/500

policy.) The undisputed fact that AMCO never issued a 250/500 policy leaves

Kiefer with four possible legal arguments—two based on the factual assumption

that Kiefer erroneously did not select the higher 250/500 limits on the scroll-down

menu, and two based on the factual assumption that Kiefer did correctly select the

higher 250/500 limits on the scroll-down menu. We consider and reject each

argument in turn.

A

Kiefer and McGruder’s first pair of arguments rests on principles of

California agency law. We reject both versions of the argument.

1

Kiefer and McGruder contend that, if Kiefer made a mistake and—contrary

to McGruder’s instructions—did not actually select the 250/500 policy from the

online scroll-down menu, AMCO is bound by Kiefer’s negligent error because

Kiefer, in selecting the insurance policy at McGruder’s direction, was acting as

6 AMCO’s legal agent. California agency law forecloses that argument. In

purchasing insurance for his own family, Kiefer was not acting as AMCO’s legal

agent, and AMCO is not responsible for any error by Kiefer in selecting

automobile insurance for his own family.

Under California law, even an insurance “agent” is sometimes a legal agent

for the insured, not the insurer. “If an insurance agent is the agent for several

companies, and either selects the company with which to place the insurance or

picks an insurer at the insured’s direction, the insurance agent is the agent of the

insured, not the insurer.” Mercury Ins. Co. v. Pearson, 87 Cal. Rptr. 3d 310, 317

(Cal. Ct. App. 2008). Kiefer asserts in his declaration that “my wife, Cynthia

McGruder, directed me, as the licensed and appointed Agent for AMCO Insurance

Company,” to buy insurance from AMCO. Kiefer explains that he is the

“President, CEO, and sole shareholder of Gold Mountain Insurance Services, Inc.,”

a “Licensed California Insurance Agency,” and that he himself is a “licensed

insurance broker/agent.” Kiefer attached to his declaration a list of companies with

which his company, Gold Mountain, is authorized to transact, only one of which is

AMCO. Kiefer also states that he has “relationships with other insurance

companies for which I place personal automobile insurance.” Therefore, Kiefer’s

own declaration makes clear that he “is the agent for several companies” and

“pick[ed] an insurer at the insured’s direction,” which makes him “the agent of the

7 insured, not the insurer.” Mercury, 87 Cal. Rptr. 3d at 317. AMCO is therefore

neither bound by, nor responsible for, any error by Kiefer in selecting the incorrect

liability limits.

2

For the same reasons, AMCO was not legally required to issue Kiefer and

McGruder a 250/500 policy, even if Kiefer did select that option via the online

scroll-down menu. Kiefer assumes that AMCO would be bound to accept any

such request by Kiefer, but Kiefer’s assumption is wrong. That is because, as

noted above, Kiefer was acting as the agent for McGruder in selecting the policy,

and—as McGruder’s agent—was not empowered to bind AMCO at 250/500

simply by selecting a policy option from AMCO’s online scroll-down menu. See

Mercury, 87 Cal. Rptr. 3d at 317. Nor did AMCO ever, prior to the relevant

incident, issue the couple a 250/500 policy.2

* * *

In short, it does not matter whether Kiefer really clicked “25/50” or

“250/500” on AMCO’s online scroll-down menu. Kiefer’s agency-law argument

2 Kiefer could, as a theoretical matter, have argued that the 25/50 policy AMCO issued was a counteroffer to Kiefer’s request for a 250/500 policy, not an actual insurance contract. But Kiefer does not make that argument, for obvious reasons. For one thing, Kiefer paid (and AMCO accepted) insurance premiums under the contract, so both parties clearly accept the existence of the insurance contract. For another, with no mutually assented-to (and hence valid) insurance contract, Kiefer and McGruder would be entitled to no insurance coverage at all.

8 fails under either factual assumption.

B

We now turn to, and reject, Kiefer’s separate argument that one or more of

the parties made a mistake, and that the parties’ insurance contract should therefore

be equitably reformed to include the higher 250/500 limits.

1

“Since reformation is an equitable remedy, it may be denied if the mistake

was the result of ‘the want of that degree of care and diligence which would be

exercised by persons of reasonable prudence under the same circumstances.’”

Appalachian Ins. Co. v. McDonnell Douglas Corp., 262 Cal. Rptr. 716, 726 (Cal.

Ct. App. 1989) (quoting Fraters Glass & Paint Co. v. Sw. Constr. Co., 290 P. 45,

47 (Cal. Ct. App. 1930)). “The reformation of a policy on the ground of mistake

without the exercise of reasonable care on the part of the insured is not to be

encouraged.” Taff v. Atlas Assur. Co., 137 P.2d 483, 487 (Cal. Ct. App. 1943).

The California Supreme Court has denied reformation where the plaintiff

(1) alleged a unilateral mistake; (2) failed to make “allegations of diligence

sufficient to excuse the long delay in discovering the alleged mistake”; and

(3) made no “showing that [plaintiff] was prevented from reading the contract or

from fully comprehending the meaning of the language used.” Miller v. Lantz, 71

P.2d 585, 587 (Cal. 1937). And for good reason: were it otherwise, plaintiffs could

9 pay low insurance premiums for minimal coverage, wait until an accident

occurred, and then claim that they had really purchased higher-quality insurance all

along. See supra at 3 n.1.

Kiefer has clearly acted unreasonably and, in doing so, has failed to meet

California’s reasonableness standards for reformation of a contract based on

unilateral mistake. Kiefer, despite his 34 years of experience in the insurance

business, never reviewed “a hard copy of the coverages for the AMCO Policy”;

never checked the policy for its liability limits; and generally exercised no

“diligence sufficient to excuse the long delay in discovering the alleged mistake.”

Lantz, 71 P.2d at 587. His claim for reformation of the contract based on his own

unilateral mistake therefore fails as a matter of law.

In addition, “[r]eformation for unilateral mistake is not available unless the

mistake of one party was known or suspected by the other party at the time of the

execution of the document.” Cedars-Sinai Med. Ctr. v. Shewry, 41 Cal. Rptr. 3d

48, 64 (Cal. Ct. App. 2006). There is no evidence in the record, nor does Kiefer

argue in his opening brief, that AMCO suspected or knew of Kiefer’s alleged

mistake, as required to support a claim for reformation based upon unilateral

mistake. That provides a second and independent ground for rejecting, as we do,

Kiefer’s claim for reformation based on unilateral mistake.

10 2

Kiefer could, theoretically, have argued that he correctly selected the higher

250/500 limits and that the contract should be reformed to include the higher limits

because AMCO made a mistake by subjectively intending to write a policy with

the higher 250/500 limits, but accidentally writing a policy with the lower 25/50

limits. Thus, the argument would go, both parties really meant to agree at 250/500,

and the contract should be reformed to reflect that mutual mistake.

As an initial matter, Kiefer has forfeited that argument by failing to raise

mutual mistake in his opening brief. Friends of Yosemite Valley v. Kempthorne,

520 F.3d 1024, 1033 (9th Cir. 2008). In any event, a request for equitable

reformation based upon mutual mistake is, once again, subject to a reasonableness

standard that Kiefer’s conduct in this case does not meet. Appalachian Ins. Co.,

262 Cal. Rptr. at 725–26.

AFFIRMED.

11