                                                                              FILED
                           NOT FOR PUBLICATION                                DEC 17 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


DAVID KING and JULIE KING,                       No. 10-36174

              Plaintiffs - Appellants,           D.C. No. 9:09-cv-00096-DWM

  v.
                                                 MEMORANDUM*
STATE FARM FIRE AND CASUALTY
INSURANCE COMPANY,

              Defendant - Appellee.


                   Appeal from the United States District Court
                           for the District of Montana
                   Donald W. Molloy, District Judge, Presiding

                     Argued and Submitted December 4, 2012
                              Seattle, Washington

Before: SCHROEDER, McKEOWN, and TALLMAN, Circuit Judges.

       David and Julie King (“the Kings”), residents of Montana and assignees of

rights under a comprehensive general liability (“CGL”) policy in favor of their

judgment debtor, brought suit against State Farm Fire and Casualty Company

(“State Farm”) for satisfaction of a $600,048.47 judgment entered in their favor


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
after a special verdict award by a Montana state court jury in a breach of contract

case. The Kings sought three forms of relief: (1) a declaratory judgment that the

defendants’ CGL policy in the underlying case covered the damages incurred, (2)

estoppel to prevent State Farm from denying coverage, and (3) attorneys’ fees

related to the underlying lawsuit. The United States district court properly granted

summary judgment in favor of State Farm on all three claims.

      The Kings are not entitled to a declaratory judgment because the facts of the

underlying case do not constitute an “occurrence” as defined in the State Farm

policy. Where the defendants in the underlying case deliberately refused to

remedy the breach of a contract to deliver a log home package and the Kings

deliberately chose to use the known non-conforming product in constructing their

residence, any unintended results stemming from their intentional actions are not

caused by an occurrence under Montana state law. See Blair v. Mid-Continent

Cas. Co., 167 P.3d 888, 891–92 (Mont. 2007). Without an occurrence no coverage

exists and there is no resulting duty to defend or to indemnify. See Daly Ditches

Irr. Dist. v. Nat’l Sur. Corp., 764 P.2d 1276, 1279 (Mont. 1988).

      Neither are the elements of estoppel met. The Kings failed to prove by clear

and convincing evidence that in reliance on an act of State Farm, they, or the

defendants in the underlying case, changed their position for the worse. See


                                          2
Avanta Fed. Credit Union v. Shupak, 223 P.3d 863, 872 (Mont. 2009); St. Paul

Fire & Marine Ins. Co. v. Am. Bank, 33 F.3d 1159, 1161 (9th Cir. 1994). We have

examined the Kings’ remaining claims for coverage, but none have merit. The

district court properly denied attorneys’ fees because it denied the Kings’ claim for

declaratory judgment. See Mont. Code Ann. § 27-8-313.

      AFFIRMED.




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