DAVID KING and JULIE KING v. State Farm Fire and Casualty Insurance Company

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID KING and JULIE KING,
Plaintiffs - Appellants,
v.
STATE FARM FIRE AND CASUALTY
INSURANCE COMPANY,
Defendant - Appellee.
No. 10-36174
D.C. No. 9:09-cv-00096-DWM
MEMORANDUM*
Appeal from the United States District Court
for the District of Montana
Donald W. Molloy, District Judge, Presiding
Argued and Submitted December 4, 2012
Seattle, Washington
Before: SCHROEDER, McKEOWN, and TALLMAN, Circuit Judges.
David and Julie King (“the Kings”), residents of Montana and assignees of
rights under a comprehensive general liability (“CGL”) policy in favor of their
judgment debtor, brought suit against State Farm Fire and Casualty Company
(“State Farm”) for satisfaction of a $600,048.47 judgment entered in their favor
FILED
DEC 17 2012
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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after a special verdict award by a Montana state court jury in a breach of contract
case. The Kings sought three forms of relief: (1) a declaratory judgment that the
defendants’ CGL policy in the underlying case covered the damages incurred, (2)
estoppel to prevent State Farm from denying coverage, and (3) attorneys’ fees
related to the underlying lawsuit. The United States district court properly granted
summary judgment in favor of State Farm on all three claims.
The Kings are not entitled to a declaratory judgment because the facts of the
underlying case do not constitute an “occurrence” as defined in the State Farm
policy. Where the defendants in the underlying case deliberately refused to
remedy the breach of a contract to deliver a log home package and the Kings
deliberately chose to use the known non-conforming product in constructing their
residence, any unintended results stemming from their intentional actions are not
caused by an occurrence under Montana state law. See Blair v. Mid-Continent
Cas. Co., 167 P.3d 888, 891–92 (Mont. 2007). Without an occurrence no coverage
exists and there is no resulting duty to defend or to indemnify. See Daly Ditches
Irr. Dist. v. Nat’l Sur. Corp., 764 P.2d 1276, 1279 (Mont. 1988).
Neither are the elements of estoppel met. The Kings failed to prove by clear
and convincing evidence that in reliance on an act of State Farm, they, or the
defendants in the underlying case, changed their position for the worse. See

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Avanta Fed. Credit Union v. Shupak, 223 P.3d 863, 872 (Mont. 2009); St. Paul
Fire & Marine Ins. Co. v. Am. Bank, 33 F.3d 1159, 1161 (9th Cir. 1994). We have
examined the Kings’ remaining claims for coverage, but none have merit. The
district court properly denied attorneys’ fees because it denied the Kings’ claim for
declaratory judgment. See Mont. Code Ann. § 27-8-313.
AFFIRMED.

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