Unpublished Disposition, 909 F.2d 1489 (9th Cir. 1989)

MEMORANDUM^* 

James R. Hopkins appeals summary judgment in favor his automobile insurer, Allstate Insurance Company. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

* On September 27, 1988, Hopkins was involved in a traffic accident that damaged his 1980 Oldsmobile automobile. Hopkins filed a claim with Allstate, with which he had a policy for comprehensive liability and collision insurance. Two provisions of that policy are pertinent to this appeal. The first provision, the "appraisal clause," gives both parties the option of subjecting claim disputes to an even-handed appraisal procedure.¹  The second provision, the "litigation clause," makes full compliance with the policy a condition precedent for filing a lawsuit against Allstate.² 

Roughly one week after the accident, Allstate inspected the Oldsmobile and began processing Hopkins' claim. Allstate concluded that the Oldsmobile was "totaled" (i.e. the cost of its repair exceeded its market value at the time of the crash) and offered Hopkins $2,000, minus a $100 deductible. Hopkins did not accept the offer. Subsequently, Allstate lowered its offer to $1,500, minus the $100 deductible and charges for storage of the automobile. Hopkins, now under the advice of counsel, found this offer even less attractive. On November 2, 1988, Allstate repeated to Hopkins' attorney that it did not intend to go beyond its $1,500 offer. Hopkins filed a complaint that very day, alleging that Allstate's settlement practices violated Montana's Unfair Claims Practices Act, MCA Sec. 33-18-201 (1987).

Roughly six weeks after Hopkins filed suit, on December 14, 1988, Allstate invoked the appraisal clause. Hopkins refused to comply with the appraisal procedures. Allstate then removed Hopkins' action to federal court on the basis of diversity jurisdiction. On January 17, 1989, Hopkins filed an amended complaint in federal district court. The new complaint added an allegation that Allstate's insurance rates were excessive and thereby sought relief on behalf of a class of similarly situated individuals.

Allstate moved, pursuant to Federal Rule of Civil Procedure 12(b) (6), for dismissal of Hopkins' amended complaint for failure to state a claim. Because the parties had submitted matters outside the pleadings, the district court construed the motion as one for summary judgment. The district court granted Allstate summary judgment on the unfair practices claim but, pursuant to Federal Rule of Civil Procedure 15(a), granted Hopkins leave to amend after he had undergone the appraisal process. The district court also granted Allstate summary judgment on the excessive rates claim. Hopkins timely appealed.

II

Because the district court did not exclude matters outside of the pleadings, it properly construed Allstate's Rule 12(b) (6) motion to dismiss as a Rule 56 motion for summary judgment. See Fed. R. Civ. P. 12(b); Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir. 1984).

We review a grant of summary judgment de novo. State Farm Fire and Casualty Co. v. Martin, 872 F.2d 319, 320 (9th Cir. 1989) (per curiam). In doing so, we also review the district court's interpretation of the substantive state law de novo. See In re McLinn, 739 F.2d 1395, 1397 (9th Cir. 1984) (en banc).

We review a grant of leave to amend after summary judgment for an abuse of discretion. Nguyen v. United States, 792 F.2d 1500, 1503 (9th Cir. 1986).

III

The litigation clause bars Hopkins from maintaining an action against Allstate if he is not in full compliance with the policy. Hopkins concedes that he has not complied with the appraisal clause of the contract. Accordingly, it appears relatively straightforward that he cannot maintain an action until he complies.

Hopkins claims however, that it is not so straightforward as all that. He claims that under Montana law, the litigation clause bars him only if Allstate had invoked the appraisal provision before he filed suit. See Dunn v. Way, 786 P.2d 649, 652 (Mont.1989).

We disagree. In Garretson v. Mountain West Farm Bureau Mutual Ins. Co., 761 P.2d 1288 (Mont.1988) the Montana Supreme Court interpreted an automobile insurance policy with litigation and appraisal clauses similar to those in the present case. See id. at 1288-89. There, as here, the insurance company invoked the appraisal clause nearly one month after the insured filed suit. Id. at 1289. Nonetheless, the Montana Supreme Court affirmed summary judgment in favor of the insurer. Id. at 1291.

In this light, we cannot say that the district court erred in dismissing Hopkins' claim.³ 

IV

Hopkins next challenges summary judgment on his class action claim seeking to recover excess insurance premiums from Allstate. However, after independent review, we agree with the district court that Montana law does not provide an insured with a private cause of action against his insurer for excessive premiums.

V

For these reasons, the judgment of the district court is AFFIRMED.