Unpublished Disposition, 904 F.2d 710 (9th Cir. 1990)

MEMORANDUM^* 

This is an insurance coverage case. At issue is whether the term "unfair competition" within an insurance policy is an ambiguous term. It is not. Following settled Washington state law, we AFFIRM the district court's granting of summary judgment for appellee Globe Indemnity Company.

Globe brought a declaratory judgment action asserting that it had no duty to defend or indemnify appellant First American State Bank et al. in actions arising from an allegedly fraudulent investment scheme. The district court granted summary judgment in favor of Globe because it determined the actions for allegedly fraudulent schemes were outside the scope of insurance coverage provided by Globe.

ANALYSIS

We review de novo the grant of summary judgment, Kruso v. Int'l Tel. & Telegraph, 872 F.2d 1416, 1421 (9th Cir. 1989), and apply the standard set forth in Fed. R. Civ. P. 56(c). Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir. 1986).

Any potential coverage for the actions brought against First American would fall under the policy's "advertising offense" section. The policy defines "advertising offense" as:

injury occurring in the course of ... advertising activities, if such injury arises out of libel, slander, defamation, violation of right of privacy, piracy, unfair competition, or infringement of copyright, title or slogan.

CR 13 at Ex. F. (emphasis added).

First American contends that the term "unfair competition" encompasses the type of actions brought against it. Alternatively, it argues that the term is at least ambiguous and, hence, must be construed against Globe. We disagree.

First American was accused of making:

false, deceptive and misleading statements of material facts and fail [ing] to disclose facts material to the customer's decision to purchase metals on margin with [appellants], including but not limited to the misrepresentations and omissions set forth

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CR 13 at 12-15. These actions arise from alleged harm to customers, not competitors. As the district court correctly determined, the term "unfair competition" refers unambiguously only to actions affecting competitors.

The district court relied upon Pine Top Ins. v. PUD of Chelan City, 676 F. Supp. 212 (E.D.Wa.1987) in which "unfair competition" was found to refer to "the protection of a business from another's misappropriation of the business' organization (or its expenditure of labor, skill and money." Id. at 216 (citations omitted).

The Pine Top decision is lent further credence by the recent Washington Court of Appeals decision in Boggs v. Whitaker, Lipp & Helsea, 784 P.2d 1273 (Wash.App.), rev. denied, 114 Wash. 2d 1018 (1990).

Confronted by an insurance policy with identical language as in this case, the Boggs court opined that "unfair competition" applied only to acts against competitors and " [s]uits based on conduct that is harmful to consumers but not competitors arise under the prohibition of unfair and deceptive practices, not unfair competition. " Boggs, 784 P.2d at 1275 (emphasis added) (internal citations omitted).

Boggs controls this case.

We note that, at oral argument, counsel for First American argued repeatedly that Boggs was decided incorrectly in light of the Washington Supreme Court's decision in Boeing Co. v. Aetna Cas. and Sur. Co., 784 P.2d 507 (Wash.1990). Counsel focused on the Boeing court's statement that insurance policies be interpreted as "would be understood by the average man," id. at 513, and appeared to reason that this statement was somehow at odds with the decision in Boggs. We are mystified as to what edification Boeing purportedly brings to Boggs as both cases utilize an "average man" standard. Compare Boeing, 784 P.2d at 513 with Boggs, 784 P.2d at 1274.

First American argues, in the alternative, that the question of what definition to give "unfair competition" should be certified to the Washington Supreme Court. Certification is uncalled for. See Wash.Rev.Code Sec. 2.60.020 (1989) (certification permitted for undetermined issues of state law).

Finally¹ , we reject First American's assertion that its rule 56(f) motion was improperly denied. Further discovery would have served no purpose given the policy's facial exclusion of coverage for the underlying actions. The district court did not abuse its discretion in denying the motion. Mackey v. Pioneer Nat. Bank, 867 F.2d 520, 524 (9th Cir. 1989) (denial of rule 56(f) reviewed for abuse of discretion).

AFFIRMED.