Page Wellcome; Page Wellcome, Professional Service Corp.,plaintiffs-appellants, v. the Home Insurance Company, Defendant-appellee, 993 F.2d 887 (9th Cir. 1993)

Before: FARRIS, NORRIS, and KOZINSKI, Circuit Judges

MEMORANDUM^** 

Page Wellcome, a Montana attorney, appeals the award of summary judgment to Home Insurance Co. (Home), his professional liability carrier, in his diversity action against it for refusing to provide coverage for court-imposed sanctions. The district court, applying Montana law, held that Home's coverage of Wellcome did not extend to court-imposed sanctions because the policy excluded "fines or statutory penalties imposed by law or otherwise." We affirm.

* Wellcome argues that the district court erred in rejecting his two alternative arguments: (1) that the term "fine" in the policy was ambiguous and, therefore, should be construed against Home; and (2) that coverage should be required under the "reasonable expectations" doctrine.

Because no clear controlling precedent in Montana judicial decisions existed on questions determinative of this case, the panel certified the following two questions of law to the Montana Supreme Court:

1. First, was there ambiguity in the contract language that should be construed against Home to require it to provide coverage for the sanctions imposed against Wellcome?

2. Second, does the doctrine of reasonable expectations require Home to provide coverage for the sanctions imposed against Wellcome?

On April 14, 1993, we received an opinion from the Montana Supreme Court, answering "no" to both of these questions. Accordingly, the district court properly rejected both of Wellcome's arguments concerning coverage.

Finally, we agree with the district court that the policy did not require Home to pay Wellcome's defense costs in connection with the sanctions. The coverage section of the policy provides in pertinent part: "With respect to the insurance afforded by this policy, the Company shall defend any claim against the insured ... seeking damages to which this insurance applies...." ER 1, Policy at 3. Because the sanctions are not "damages to which this insurance applies," Home had no duty to defend.

AFFIRMED.