EQUITY INCOME PARTNERS, LP, an Arizona Limited Partnership v. Chicago Title Insurance Company, a Delaware Corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
EQUITY INCOME PARTNERS, LP, an
Arizona Limited Partnership; GALILEO
CAPITAL PARTNERS LIMITED, a
Cayman Islands Exempted Company,
Plaintiffs-Appellants,
v.
CHICAGO TITLE INSURANCE
COMPANY, a Delaware Corporation,
Defendant-Appellee.
No. 14-15388
D.C. No. 2:11-cv-01614-SMM
MEMORANDUM *
Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding
Argued March 18, 2016
Submitted March 3, 2017
San Francisco, California
Before: KLEINFELD, RAWLINSON, and HURWITZ, Circuit Judges.
On July 12, 2016, we certified the following questions of law to the Arizona
Supreme Court pursuant to Ariz. Rev. Stat. § 12-1862:
1. When a lender purchases property by full-credit bid at a trustee’s
sale, does Section 9 [of the standard form lender’s title insurance
* This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
FILED
MAR 3 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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2
policies] apply, or does Section 2 apply?
2. Is a full-credit bid at a trustee’s sale a “payment” or “payment[]
made” under Sections 2 or 9 of the policies?
3. To what extent does a full-credit bid at a trustee’s sale either (a)
terminate coverage under Section 2(a)(i) of the policies, or (b)
reduce coverage under Section 2 and any possible liability under
Section 7?
Equity Income Partners, LP v. Chi. Title Ins. Co., 828 F.3d 1040, 1045 (9th Cir.
2016).
On February 7, 2017, the Arizona Supreme Court answered the certified
questions as follows:
1. Section 2 applies when a lender purchases property by full-credit
bid at a trustee’s sale.
2. A full-credit bid at a trustee’s sale is not a “payment” under
Sections 2 or 9 of the policy.
3. The full-credit bid neither terminates nor reduces coverage under
Section 2 or Section 7.1
Equity Income Partners, LP v. Chi. Title Ins. Co., No. CV-16-0162-CQ, --- P.3d ----,
1 The footnote in the Arizona Supreme Court opinion stated:
As explained below, the trustee sale may reduce or even eliminate a
title insurer’s ultimate liability under its policy. However, this
reduction or elimination is not a function of the credit bid amount.
Rather, the amount of the reduction, if any, is the fair market value of
the property the lender receives as a result of its credit bid or, if the
property is acquired by a third party, the amount that party pays for the
property.

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3
2017 WL 490398, at *1 (Ariz. 2017).
In light of the Arizona Supreme Court’s answers to the certified questions, we
vacate the district court’s summary judgment and remand for further proceedings
consistent with those answers. Costs are awarded to appellants. Fed. R. App. P.
39(a).
VACATED and REMANDED.

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