BRYAN GRIGGS; VALERIE GRIGGS, husband and wife v. Allstate Insurance Company

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRYAN GRIGGS; VALERIE GRIGGS,
husband and wife,
Plaintiffs - Appellants,
v.
ALLSTATE INSURANCE COMPANY,
Defendant - Appellee.
No. 13-35282
D.C. No. 3:12 cv-00463 MO
MEMORANDUM*
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, Chief District Judge, Presiding
Argued and Submitted May 6, 2016
Portland, Oregon
Before: TASHIMA, TALLMAN, and HURWITZ, Circuit Judges.
Plaintiffs Bryan and Valerie Griggs appeal the district court’s order granting
summary judgment to Defendant Allstate Insurance Company (“Allstate”). We
have jurisdiction under 28 U.S.C. § 1291, and we affirm.
FILED
MAY 25 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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I.
From June 2010 to June 2011, Plaintiffs maintained a Renters Insurance
Policy (“Policy”) with Allstate. While the Policy provided protection against
unauthorized use of a credit card, it also contained an exclusion for any “loss
arising from any business of an insured person.”
Between June 2009 and November 2010, Bryan Griggs was employed as the
Chief Financial Officer of HDMC Group LLC (“HDMC”). HDMC and Advanced
Travel Systems, Inc. (“ATS”) purchase hotel rooms in bulk and then resell them,
typically to attendees of conventions and tradeshows. To reserve the hotel rooms,
HDMC and ATS place a credit card on file with the vendor. HDMC and ATS
maintain various company credit cards for this purpose, but the daily credit limit
on these cards is not always sufficient to cover all of the charges they wish to
incur. Thus, Griggs agreed to allow HDMC to use his personal American Express
card to reserve some hotel rooms. Griggs authorized each transaction on a
case-by-case basis, and HDMC agreed to reimburse Griggs for any charges.
In September 2010, Griggs noticed that his credit card statement contained
transactions that he did not recall authorizing HDMC to make. Griggs disputed the
charges and informed HDMC that it could no longer use his card. A few months
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later, HDMC terminated Griggs’s employment. Griggs alleges that HDMC
continued to make unauthorized charges on his credit card after he was fired.
In January 2011, ATS and HDMC sued Plaintiffs in Nevada state court,
alleging that Griggs wrongfully disputed charges that he had authorized and for
which he had been reimbursed. Plaintiffs twice tendered the defense of the state
court action to Allstate. Allstate denied coverage and declined to provide a
defense.
In response, Plaintiffs filed this federal action, seeking damages and a
declaration that Allstate owed Plaintiffs a duty to defend the state court action.
The district court granted Allstate’s motion for summary judgment, concluding that
the business exclusion clause applied. Plaintiffs appeal.
II.
We review de novo a grant of summary judgment on an insurer’s duty to
defend. Ind. Lumbermens Mut. Ins. Co. v. W. Or. Wood Prods., Inc., 268 F.3d 639,
643 (9th Cir. 2001). “Viewing the evidence in the light most favorable to the
nonmoving party, we must decide whether there are any genuine issues of material
fact and whether the district court correctly applied the pertinent substantive law.”
Id. a 644 (citation omitted).
III.
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“Under Oregon law, a court assesses an insurer’s duty to defend an action
against its insured by reviewing the complaint and the insurance policy.” Id.
(citing Ledford v. Gutoski, 877 P.2d 80, 82 (Or. 1994) (en banc)). “In evaluating
whether an insurer has a duty to defend, the court looks only at the facts alleged in
the complaint to determine whether they provide a basis for recovery that could be
covered by the policy.” Ledford, 877 P. 2d at 82. “The insurer has a duty to
defend if the complaint provides any basis for which the insurer provides
coverage.” Id. at 83.
The district court correctly concluded that Allstate did not have a duty to
defend under Oregon law. The Policy expressly excludes coverage for credit card
losses “arising from any business of an insured person.” In the context of
insurance policies, Oregon courts have broadly construed the phrase “arising out
of” to indicate “a causal connection, rather than a proximate causal connection.”
Ristine v. Hartford Ins. Co. of Midwest, 97 P.3d 1206, 1208 (Or. Ct. App. 2004)
(citation omitted); see also Oakridge Cmty. Ambulance Serv., Inc. v. U.S. Fid. &
Guar. Co., 563 P.2d 164, 166–67 (Or. 1977) (en banc). The Policy defines
“business” as “any full or part-time activity of any kind engaged in for economic
gain.” Although the Policy does not further define “economic gain,” Plaintiffs
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concede that a principal form of economic gain recognized in the case law is salary
or compensation earned through employment.
the state court complaint alleges that Plaintiffs’ claimed credit card losses
arose from Griggs’ employment at HDMC. Those allegations fall squarely within
the Policy’s business exclusion clause. That complaint also alleges that Griggs
was employed full-time as the CFO of HDMC. The complaint explains that
HDMC and ATS are hotel room wholesalers that, “[a]s part of their normal course
of doing business,” place a credit card on file with the vendor to reserve hotel
rooms. Further, it also alleges that, at Griggs’ suggestion, HDMC and ATS used
Griggs’s “personal American Express card to make payment due from HDMC or
ATS to various hotel and travel wholesalers, as those vendors required immediate
payment by credit card for rooms being purchased by HDMC.”
Plaintiffs were sued, in the Nevada state court action, in connection with acts
Griggs took in furtherance of a for-profit venture. Any losses Griggs sustained
from HDMC’s unauthorized use of Griggs’s credit card arose from – that is, were
causally connected to – his full-time, paid employment at HDMC.
Because the Policy’s business exclusion provision precludes coverage, the
district court did not err in granting summary judgment in favor of Allstate.
AFFIRMED.
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