United States v. 2020-08-14 | 18-17350 | WILSHIRE INSURANCE COMPANY V. PATRICK YAGER | nonprecedential | memorandum disposition |

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

WILSHIRE INSURANCE COMPANY,
Plaintiff-counter-
defendant-Appellee,
v.
PATRICK YAGER; JAVIER LOPEZ,
Defendants-counter-
claimants-Appellants,
v.
GIRARD INSURANCE COMPANY; IRA
LEE GIRARD; MARY ANN GIRARD,
Third-party-defendants.
No. 18-17350
D.C. No. 4:16-cv-00192-JAS
MEMORANDUM
*
Appeal from the United States District Court
for the District of Arizona
James Alan Soto, District Judge, Presiding
Submitted May 5, 2020
**
Seattle, Washington
FILED
AUG 14 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
* *
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

Before: TASHIMA, W. FLETCHER, and RAWLINSON, Circuit Judges.
This appeal arises from an insurance coverage dispute. Alonso Pastor
obtained commercial auto insurance coverage with Appellee Wilshire Insurance
Company (Wilshire). Appellants Patrick Yager and Javier Lopez were involved in
a motor vehicle accident during which Yager sustained injuries. The van owned
and driven by Lopez was added as a covered auto under Pastor’s policy, but Lopez
was not added as a named insured.
Following the accident, Yager initiated a state lawsuit against Lopez and
Pastor. Months after Wilshire obtained counsel on Lopez’s behalf, Wilshire issued
a reservation of rights on the basis that Lopez was not covered under the policy.
The state action was dismissed as to Pastor, and Lopez assigned his rights against
Wilshire to Yager, with the pair agreeing to a stipulated judgment of $1.5 million.
Wilshire initiated the underlying declaratory action in federal court, seeking
a declaration that the insurance company had no duty to indemnify Lopez under
the insurance policy.
Yager and Lopez appeal the district court’s grant of summary judgment in
favor of Wilshire. We review the district court’s order granting summary
judgment de novo. See Arce v. Douglas, 793 F.3d 968, 975-76 (9th Cir. 2015).
2

1.The district court properly entered judgment in favor of Wilshire, as
Lopez was not covered under the policy. The policy defined “insured” as Pastor
“for any covered auto” and “[a]nyone else while using with [Pastor’s] permission a
covered auto . . . own[ed], hire[d] or borrow[ed] except [t]he owner or anyone else
from whom [Pastor] hire[d] or borrow[ed] a covered auto.” Although the vehicle
being operated by Lopez was insured, Lopez was not. Further, as the owner of the
vehicle being operated, Lopez did not fit within the definition of a permissive
driver.
2.Wilshire was not estopped from raising coverage defenses, nor did
Wilshire waive any coverage defenses. Waiver requires a clear expression of
intent to relinquish a known right. See Prieto v. Paul Revere Life Ins. Co., 354
F.3d 1005, 1013 n.12 (9th Cir. 2004) (citing Arizona law); see also Services
Holding Co., Inc. v. Transamerica Occidental Life Ins. Co., 883 P.2d 435, 443
(Ariz. Ct. App. 1994). Morever, Wilshire would only be estopped from asserting
coverage defenses if an insured detrimentally relied on Wilshire’s actions. See
Services Holding., 883 P.2d at 443. Because Lopez produced no evidence of
Wilshire’s intentional relinquishment of its right to deny coverage, or of Lopez’s
detrimental reliance on any action taken by Wilshire, no material issue of fact was
3

raised to preclude summary judgment. See Penn-Am. Ins. Co. v. Sanchez, 202 P.3d
472, 476 (Ariz. Ct. App. 2008) (articulating the summary judgment standard).
3.Finally, because Lopez was not covered under the Wilshire policy, his
claims for bad faith and breach of the covenant of good faith and fair dealing are
not viable. See Desert Ridge Resort LLC v. Occidental Fire & Cas. Co. of NC, 141
F. Supp. 3d 962, 972-73 (D. Ariz. 2015).
AFFIRMED.

4