Unpublished Disposition, 889 F.2d 1095 (9th Cir. 1989)

MEMORANDUM^* 

Hess Farms, Inc. (Hess Farms) appeals from the order granting summary judgment to Monarch Insurance Company of Ohio, Inc. (Monarch). The district court decided the issues presented on alternate grounds. The district court concluded that there was no coverage for the injuries suffered by Hess Farms because Mountain States used uninsured aircraft for chemical spraying in violation of an express condition of the insurance policy that denied coverage under those circumstances. The district court also determined that the policy was void ab initio because Mountain States' application contained false representations.

Hess Farms contends that the district court erred in granting summary judgment on the following grounds: 1) genuine issues of material fact exist concerning whether the policy covers the injury claimed by Hess Farms; 2) Monarch is equitably estopped from relying on Condition Nine of its policy because its agent, Sam Buckley, was aware that Mountain States owned a helicopter equipped to spray crops; 3) Monarch is absolutely liable to Hess Farms, notwithstanding the exclusion provisions of Condition Nine, because Idaho Code Sec. 22-3404(2) (c) makes possession of insurance compulsory; and 4) Monarch is jointly and severally liable for the crop damage because Mountain States had insurance coverage for two of the aircraft used in the spraying.

We conclude that the loss suffered by Hess Farms was not covered by the policy and that the statute does not impose absolute liability on Monarch. Accordingly, it is unnecessary for us to decide whether the policy was void ab initio. We discuss each issue concerning the coverage of the policy and the facts pertinent thereto under separate headings.

STANDARD OF REVIEW

We review a grant of summary judgment de novo. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1540 (9th Cir.) (en banc), cert. denied, 58 U.S.L.W. 3213 (U.S. Oct. 3, 1989). Summary judgment is appropriate when, " [v]iewing the evidence in the light most favorable to the nonmoving party," there are no genuine issues of material fact and "the district court correctly applied the [relevant] substantive law." Judie v. Hamilton, 872 F.2d 919, 920 (9th Cir. 1989). There is no genuine issue of material fact if the record as a whole demonstrates that a rational trier of fact could not find in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

DISCUSSION

Hess Farms does not dispute that Condition Nine requires all aircraft engaged in spraying to be insured before coverage will attach. Instead, Hess Farms asserts that the exclusion provisions cannot be enforced because the policy does not comply with the requirements of the regulations regarding insurance against crop damage caused by the spraying of pesticides. C.R. 72. Hess Farms argues that the Certificate of Insurance filed by Monarch did not comply with this requirement because it did not list any exceptions to the policy of insurance.

This argument is without merit. Section 6(C), of the regulations provides as follows:

Any exceptions not covered by such insurance policy, bond, or cash deposit shall be listed.

Hess Farms misconstrues the requirements of the regulation. Section 6(C) requires a listing of exceptions which are not covered by the insurance policy. The exclusion provisions contained in Condition Nine are incorporated in the insurance policy. Therefore, Monarch was not required to list Condition Nine in the certificate of insurance.

Hess Farms contends that, notwithstanding Mountain States' use of an uninsured aircraft in violation of Condition Nine, Monarch is nevertheless liable for Hess Farms' loss because Steenson had knowledge that Mountain States owned a helicopter that was equipped for spraying and had asked for a quote on the costs of insuring it. Hess claims that Monarch is equitably estopped from relying upon Condition Nine. We disagree.

Hess' contention that the facts known by Steenson placed Monarch on notice that Mountain States intended to violate an express condition of the policy is unpersuasive. Under Hess Farms' theory, knowledge by an agent that the insured has other aircraft but declines to pay the necessary premiums would result in free coverage. Hess Farms' argument would lead to an inequitable result that defies economic reality. The district court did not err in rejecting this hypothesis.

3. Compulsory Insurance Law and Absolute Liability

Hess Farms argues that we must construe the policy issued by Monarch to include coverage for innocent third parties whose crops were injured by the spraying of pesticides. Notwithstanding the policy's exclusion provisions, Hess Farms argues coverage must be recognized because the legislature has made such insurance compulsory. Hess Farms concedes that Idaho case law does not support this argument. At oral argument, Hess Farms relied upon two cases from other states to support the contention that we can ignore the exclusion of coverage expressly set forth in Condition Nine. These authorities are readily distinguishable.

In Allstate Insurance Co. v. Wyoming Insurance Deptartment, 672 P.2d 810 (Wyo.1983), the Supreme Court of Wyoming held that a "household exclusion clause" which excepts coverage for any loss to any insured or any spouse, or relative, or member of the insured's family residing in his household violated Wyoming public policy as reflected in its compulsory insurance statute, financial responsibility law, and uninsured motor vehicles act. Id. at 813-14. The only exceptions to compulsory insurance coverage are set forth in these statutes. The statutes do not contain any exception for members of the household. Id. at 823.

In Safeway Insurance Co. v. Harvey, 36 Ill.App.3d 388, 343 N.E.2d 679 (1976), the insurance carrier sought to rescind a policy after an accident occurred. The district court granted summary judgment. 343 N.E.2d at 681. The Appellate Court of Illinois held that the trial court had no jurisdiction to enter the judgment because an indispensable party had not been served. Id. at 682-83. Notwithstanding its holding that the judgment was void, the Illinois court proceeded to discuss the merits of the order granting summary judgment in favor of the Safeway Insurance Company. Id. at 683. The court concluded that the carrier could not rescind the policy because, under express provisions of Illinois law, a motor vehicle policy "may [not] be cancelled or annulled as respects any loss or damage, by any agreement between the carrier and the insured after the insured has become responsible for such loss or damage, and any such cancellation or annulment shall be void." Id. (quoting Ill.Rev.Stat. Ch. 95 1/2, para. 7-317(f) (2) (1971)). Based on the express statutory prohibition against cancellation or annulment, the Illinois court commented, in what appears to be pure dictum, that Safeway Insurance Company's liability as to an injured third party was absolute. Id.

Neither of these cases supports Hess Farms' cause. The policy issued by Monarch did not exclude any class of persons from coverage. Instead, it covered injuries to any crops caused by the insured if no uninsured aircraft was used in the spraying operation. Hess Farms has not been able to point to any provision in Idaho's statutory or case law that compels insurance coverage for spraying operations conducted in violation of the express terms of the policy. Idaho law does not contain a provision comparable to that found in Illinois motor vehicle insurance laws that makes coverage for pesticide spraying absolute as to innocent third parties "whenever loss covered by the policy occurs." Id. (quoting Ill.Rev.Stat. ch. 95 1/2, para. 7-317(f) (1) (1971)). Furthermore, according to Condition Nine, the loss suffered by Hess Farms was not covered by the policy issued by Monarch. Monarch is not absolutely liable to Hess Farms under Idaho law or public policy.

4. Applicability of the Doctrine of Joint and Several Liability

Hess Farms contends that it should be able to recover all damages caused by the insured Grumman Ag-Cat under the doctrine of joint and several liability notwithstanding the fact that Condition Nine excludes coverage because Mountain States used an uninsured helicopter in the spraying operations. This argument is not supported by relevant insurance contract principles.

The doctrine of joint and several liability is a tort doctrine. Each of the authorities cited by Hess Farms involves a claim against joint tort-feasors. Hess Farms has not referred us to any Idaho authority which supports its contention that the tort concept of joint and several liability can be used to extend insurance coverage to an event expressly excluded under the terms of the policy. We have found none. Monarch is not a tort-feasor. We fail to see how it can be liable to Hess Farms when it is not liable to Mountain States under Condition Nine of its policy.

Hess seeks attorneys' fees. The cases relied upon by Hess Farms provide that attorneys' fees are recoverable if a party prevails against an insurer. E.g., Bonner County v. Panhandle Rodeo Ass'n, 101 Idaho 772, 620 P.2d 1102, 1107 (1980). Hess Farms is not entitled to attorneys' fees because it has not prevailed.

AFFIRMED.