FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT UNIVERSAL CABLE PRODUCTIONS, No.17-56672 LLC, a Delaware limited liability company; NORTHERN D.C. No. ENTERTAINMENT PRODUCTIONS, 2:16 cv-04435 PA LLC, a Delaware limited liability company, Plaintiffs-Appellants, OPINION v. ATLANTIC SPECIALTY INSURANCE COMPANY, a New York insurance company, Defendant-Appellee. Appeal from the United States District Court for the Central District of California Percy Anderson, District Judge, Presiding Argued and Submitted March 4, 2019 Pasadena, California Filed July 12, 2019 2 UNIVERSAL CABLE V. ATLANTIC SPECIALTY INS. Before: Ransey Guy Cole, Jr.,* A. Wallace Tashima, and Jacqueline H. Nguyen, Circuit Judges. Opinion by Judge Tashima SUMMARY** Insurance Law The panel reversed in part and vacated in part the district court’s summary judgment in favor of Atlantic Specialty Insurance Company in a diversity insurance coverage action brought by Universal Cable Productions against its insurer, Atlantic. Universal sought to recover for expenses incurred when they moved production of the television series Dig out of Jerusalem after Hamas fired rockets from Gaza into Israel. Atlantic denied coverage based on the insurance policy’s war exclusions. The panel applied California law. Under the doctrine of contra proferentem, any ambiguity in a policy exclusion is generally construed against the * The Honorable Ransey Guy Cole, Jr., United States Chief Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. UNIVERSAL CABLE V. ATLANTIC SPECIALTY INS. 3 insurer and in favor of the insured. The panel declined to apply contra proferentem either in favor of Universal’s interpretation, or in favor of Atlantic. The panel held that the district court erred in holding that Atlantic met its burden of demonstrating that the first two war exclusions applied. The panel further held that to the contrary, the record demonstrated that neither exclusion applied here, and Atlantic breached its insurance contract by denying Universal coverage on that basis. Specifically, the panel held that Atlantic breached its contract when it denied coverage by defining Hamas’ conduct as “war” and “warlike action by a military force.” The panel also held that the district court erred when it failed to apply the specialized meaning, pursuant to Section 1644 of the California Civil Code, of those two terms. The panel held that the specialized meaning of both “war” and “warlike action by a military force” required hostilities to be between either de jure or de facto sovereigns, and Hamas constituted neither. The panel directed the entry of summary judgment in favor of Universal on these two exclusions. Because the district court did not address the third war exclusion – whether Hamas’ actions constituted “insurrection, rebellion, or revolution” – the panel remanded for the district court to address that question in the first instance. The panel held that the district court’s summary judgment on Universal’s bad faith claim was predicated on its erroneous analysis of the first ...
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