Unpublished Disposition, 861 F.2d 268 (9th Cir. 1988)

EMPLOYERS INSURANCE OF WAUSAU and Granite State InsuranceCompany, Inc., Plaintiffs-Appellees,v.R.A. HANSON, INC., Defendant-Appellant.

No. 87-4033.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 4, 1988.Decided Oct. 24, 1988.

Before ALARCON and BEEZER, Circuit Judges, and LELAND C. NIELSEN,^*  Senior District Judge.

MEMORANDUM^** 

Appellant appeals from the judgment and order of the district court granting appellee's motion for summary judgment. For the reasons stated below, we reverse and remand.

This appeal centers on the district court's interpretation of the parties' settlement agreement and the claims evaluation prepared by claims consultant John Hunt. This evaluation listed the items of damage sustained by third party Kiewitt/Pacific and the amounts of those damages. The parties, R.A. Hanson (hereinafter Rahco), Wausau and Granite stipulated as part of their settlement agreement that the evaluation "was the list of damages from which the [Kiewitt/Pacific] settlement was reached."

In the subsequent declaratory judgment action, appellees filed a motion for summary judgment supported by the affidavit of John Hunt. Hunt catagorized the damages listed in the evaluation as either covered (damage to and loss of use of property other than the pipe carrier) or noncovered (direct damage to the pipe carrier or loss of use of the pipe carrier).

The district court granted summary judgment in favor of the appellees, finding that the settlement agreement was "unambiguous" and that the amounts listed in the evaluation were the maximum amounts at issue and represented a ceiling.

We find the district court was incorrect. The settlement agreement does not appear to unambiguously limit the amount of damages to that listed by Hunt in his evaluation. The agreement does clearly state that the evaluation is the "list of damages from which the ... settlement was reached," but that does not mean that the amounts of damage and whether a particular item is covered is governed by the evaluation. The parties did not stipulate to the admissibility or accuracy of the figures. Instead, the parties agreed that the evaluation could be offered as "evidence" in the declaratory judgment proceeding. The settlement agreement does not appear unambiguous in this regard.

Further, Hunt's affidavit was contradicted in several ways, primarily by the affidavit of Kiewitt job superintendent Dave Closner. The court acknowledged that Closner disagreed with Hunt's calculations regarding "Section D Items" of the Hunt evaluation. However, the court ruled that since none of the Section D items were given a value in the evaluation and were therefore not part of the settlement payment to Kiewitt, this conflict raised no triable issue of fact. This approach appears incorrect as it assumes that the settlement agreement unambiguously states not only the list of damages, but also the amounts. As we stated earlier, the agreement is not so unambiguous, especially in a summary judgment situation. Closner also states several times in his deposition that he disputed Hunt's calculations of damage. This disagreement over the amounts of damages is sufficient to overcome a motion for summary judgment.

Hunt's affidavit is further contradicted by the original Kiewitt claim. This two-volume claim was admitted into evidence by the court and conflicts with Hunt's amounts of damages even when referring only to those items listed in the evaluation.

Finally, Hunt's affidavit is clearly contradicted by Mr. Miller's affidavit. The court refused to consider the Miller affidavit, stating that the unambiguous terms of the settlement agreement precluded it. The settlement agreement is not unambiguous in this regard either. Paragraph 6 of the agreement states that all parties reserve the right to present testimony regarding "liability discount factors." Nowhere is "liability discount factors" defined, and it is not clear from the record what the parties meant. It is necessary for the district court to determine what the parties meant because the settlement agreement preserves the right to present testimony on this issue. While the court's interpretation of an agreement is a question of law in the absence of ambiguous language, ambiguous language can raise factual issues as to the intentions of the parties. See generally 3 A.L. Corbin, Corbin on Contracts Sec. 554 (1960). For the reasons stated above, this court concludes that the settlement agreement is ambiguous and that the Rule 56 materials submitted below do not resolve those ambiguities. Accordingly, there are genuine issues of material fact as to the terms of the agreement and the grant of summary judgment was error. See generally Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). Particularly, the court should determine what the parties meant by "liability discount factors," and allow testimony on that issue.

The court's interpretation of the insurance policies and the finding that the spreader bar and pipe carrier constituted a product of Rahco is correct. The policies are not ambiguous in this regard and the court correctly found as a matter of law that the carrier and spreader bar were Rahco's products.

Therefore, we reverse the judgment of the district court and remand for trial on the amounts the insurers are obligated to indemnify Rahco for the damages listed in the evaluation, and for construction of the term "liability discount factors" with accompanying testimony on the issue of "liability discount factors."

REVERSED AND REMANDED.