                   FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

FINANCIAL MANAGEMENT ADVISORS,           
LLC, FINANCIAL MANAGEMENT
ADVISORS, INC. and KENNETH D.
                                                No. 06-55001
MALAMED,
              Plaintiffs-Appellants,              D.C. No.
                v.                             CV 04-10463-
                                               RSWL (MANx)
AMERICAN INTERNATIONAL
                                                 OPINION
SPECIALTY LINES INSURANCE
COMPANY,
               Defendant-Appellee.
                                         
        Appeal from the United States District Court
           for the Central District of California
        Ronald S.W. Lew, District Judge, Presiding

                   Argued and Submitted
            August 9, 2007—Pasadena, California

                    Filed November 5, 2007

     Before: Alex Kozinski and Johnnie B. Rawlinson,
     Circuit Judges, and Miriam Goldman Cedarbaum,*
                    Senior District Judge.

                 Opinion by Judge Cedarbaum




  *The Honorable Miriam Goldman Cedarbaum, Senior U.S. District
Judge for the Southern District of New York, sitting by designation.

                              14637
          FINANCIAL MANAGEMENT v. AMERICAN INT’L     14639


                       COUNSEL

David M. Roberts and Jenner C. Tseng, Roberts, Raspe &
Blanton LLP, Los Angeles, California, for the plaintiffs-
appellants.

Andrew J. Waxler and Gretchen S. Carner, Waxler, Carner,
Weinreb, Brodsky LLP, El Segundo, California, for the
defendant-appellee.


                        OPINION

CEDARBAUM, Senior District Judge:

  Financial Management Advisors, LLC and Financial Man-
agement Advisors, Inc. (collectively, “FMA”) and Kenneth D.
Malamed appeal from the district court’s grant of summary
judgment in favor of American International Specialty Lines
14640      FINANCIAL MANAGEMENT v. AMERICAN INT’L
Insurance Company (“AISLIC”). For the reasons that follow,
we reverse that summary judgment and remand for proceed-
ings consistent with this opinion.

                         Background

   FMA is a firm that provides investment advice and portfo-
lio management services. Malamed is FMA’s President and
Chief Investment Officer, and acts as the financial advisor to
many of FMA’s clients.

   In May of 2002, FMA purchased from AISLIC an Invest-
ment Management Insurance Policy to cover claims made
against the FMA Parties for “Wrongful Acts” in the rendering
of, or failure to render, investment advisory services. A
“Wrongful Act” is defined as “any breach of duty, neglect,
error, misstatement, misleading statement, omission or other
act wrongfully done or attempted by the Insured.” The initial
policy issued to FMA (“Policy I”) covered the period from
May 2, 2002 to May 2, 2003. In May of 2003, AISLIC issued
a “renewal” policy (“Policy II”) covering the period from
May 2, 2003 to May 2, 2004. Each policy is subject to a $2
million limit of liability.

   The dispute in this case arises from the effect of two provi-
sions, one in each of the AISLIC policies. Endorsement No.
3 of Policy I provides:

    If written notice of a Claim has been given to the
    Insurer . . . then a claim which is subsequently made
    against the Insureds and reported to the Insurer alleg-
    ing, arising out of, based upon or attributable to the
    facts alleged in the Claim for which such notice has
    been given, or alleging any Wrongful Act which is
    the same as or related to any Wrongful Act alleged
    in the Claim of which such notice has been given,
    shall be considered made at the time such notice was
    given.
            FINANCIAL MANAGEMENT v. AMERICAN INT’L             14641
(emphasis added). Exclusion II(9) of Policy II excludes from
coverage:

      [A]ny claim arising out of the facts alleged, or aris-
      ing out of the same or related Wrongful Acts
      alleged or contained, in any claim which has been
      reported, or in any circumstances of which notice
      has been given, under any policy of which this pol-
      icy is a renewal or replacement or which it may suc-
      ceed in time.

(emphasis added). Pursuant to these provisions, a claim
brought under Policy II that arises out of the same or related
Wrongful Acts as a claim brought under Policy I will be
treated as having been brought under Policy I, and will
receive coverage only to the extent that the $2 million limit
of Policy I was not exhausted by the earlier claim.

              The Sitrick and Steinman Claims

   FMA and Malamed (collectively, the “FMA Parties”) seek
insurance coverage for two separate lawsuits brought against
them by unrelated investors who received financial advice
from Malamed.

   The Sitricks are a family of investors who invested in tradi-
tional equities and fixed income products managed by FMA.
In December of 2002, when the value of their investments
began to decline, the Sitricks filed a lawsuit against the FMA
Parties in Los Angeles Superior Court alleging, among other
things: (1) that Malamed made certain misrepresentations in
order to dissuade the Sitricks from liquidating their equity
investments; and (2) that Malamed misrepresented the risk
inherent in several Collateral Bond Obligation funds (CBOs)1
  1
   CBOs are diversified portfolios of corporate bonds which are under-
written by an investment banking firm and managed by a fund manager.
FMA managed several different CBOs, including CBO II, CBO III, and
CBO IV. The Sitricks invested in all three.
14642      FINANCIAL MANAGEMENT v. AMERICAN INT’L
managed by FMA in order to induce the Sitricks to invest in
those funds. The FMA Parties tendered the Sitrick Claim to
AISLIC for coverage, and AISLIC agreed to assume the
defense. In May of 2004, the Sitricks and the FMA Parties
reached a settlement which exhausted the $2 million coverage
limitation of Policy I.

   In February of 2004, FMA began settlement discussions
with another of its clients, Mark Steinman. In June of 1999,
relying on Malamed’s advice, Steinman invested in the CBO
II fund. When his investment declined materially, Steinman
sought recovery on the ground that Malamed had misrepre-
sented the riskiness of CBO II and, moreover, had placed
Steinman’s investment into a tranche of the fund different
from and riskier than the tranche he had agreed to invest in.
Thus, Steinman alleged not only that FMA and Malamed mis-
led him, but also that they breached their agreement with him.
After reviewing the pertinent materials and comparing the
Steinman and Sitrick Claims, AISLIC preliminarily denied
coverage for the Steinman Claim, on the ground that it arose
out of the same Wrongful Acts as, or Wrongful Acts related
to, those alleged by the Sitricks and thus would be treated as
having been made under Policy I — the limits of which had
been exhausted in settling the Sitrick Claim. In September of
2004, Steinman sued the FMA Parties. FMA urged AISLIC
to reconsider its coverage position, and AISLIC issued a for-
mal denial of coverage.

   In November of 2004, FMA and Malamed sued AISLIC in
Los Angeles Superior Court. The complaint alleged that AIS-
LIC’s denial of coverage constituted a breach of its contract
obligations and that AISLIC had breached its implied cove-
nant of good faith and fair dealing by failing to investigate
and refusing to defend the Steinman Claim. After AISLIC
removed the action to federal court, the FMA Parties moved
for partial summary judgment on their breach of contract
claim, and AISLIC cross-moved for summary judgment on all
issues.
           FINANCIAL MANAGEMENT v. AMERICAN INT’L        14643
   The district court denied the FMA Parties’ motion and
granted AISLIC’s motion for summary judgment. The district
court agreed with AISLIC that the Sitrick and Steinman
Claims were “related” because both involved material misrep-
resentations made by the same financial advisor about the risk
of investing in CBO II. Because the limits of Policy I had
already been exhausted by the Sitrick Claim, the district judge
held that AISLIC had no further obligation to defend or
indemnify FMA or Malamed.

                         Discussion

   We review a district court’s grant of summary judgment de
novo. Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872,
877 n.11 (9th Cir. 2006). Findings of fact are reviewed for
clear error. Metropolitan Life Ins. Co. v. Parker, 436 F.3d
1109, 1113 (9th Cir. 2006). Conclusions of law are reviewed
de novo. Conestoga Servs. Corp. v. Exec. Risk Indem., 312
F.3d 976, 981 (9th Cir. 2002).

   This case turns on whether the Sitrick and Steinman Claims
“arise[ ] out of the same or related Wrongful Acts.” We hold
that they do not.

   [1] The Sitricks and Steinman were unrelated investors,
with unique investment objectives. They were advised at sep-
arate meetings on separate dates, according to their unique
financial positions. Indeed, the investment packages ulti-
mately recommended to and chosen by each client were dif-
ferent — the Sitricks invested in several CBO funds as well
as various equities, while Steinman invested only in CBO II.

   [2] More importantly, some of the Wrongful Acts alleged
by the two clients were different. The district court focused
solely on the allegations in the Sitrick and Steinman com-
plaints relating to the investment vehicle common to both
investors — CBO II. But a large part of the Sitricks’ case
against the FMA Parties was based on misrepresentations
14644      FINANCIAL MANAGEMENT v. AMERICAN INT’L
concerning their equity investments — investments not made
by Steinman. Even with respect to CBO II, the Sitricks and
Steinman allege different wrongful conduct by Malamed and
FMA. The Sitricks based their CBO claims largely on
Malamed’s failure to disclose certain significant information,
including: (1) that FMA failed to maintain sufficient liability
insurance; (2) that FMA had been stripped of its management
duties with respect to the first CBO it managed; and (3) that
Malamed and FMA stood to earn substantial fees on the CBO
investments. Steinman’s claim, by contrast, relies heavily on
affirmative misrepresentations in written materials prepared
by Prudential, the underwriter for the CBOs, and in a commit-
ment letter confirming that Steinman’s investment would be
placed in a low risk, “senior” tranche of CBO II when in fact
it was placed in a more junior, higher-risk tranche. The Sit-
ricks’ claims were not based on written materials.

   [3] In Bay Cities Paving & Grading, Inc. v. Lawyers’
Mutual Insur. Co., 5 Cal. 4th 854 (1993), the Supreme Court
of California defined the term “related” in a similar insurance
policy. There, a general contractor sued his attorney for two
failures to perfect the contractor’s mechanic’s lien on a single
construction project. As a result of the attorney’s malpractice,
the contractor was unable to collect the money he was owed
for the project. The attorney’s professional liability insurance
policy provided that “[t]wo or more claims arising out of a
single act, error or omission or a series of related acts, errors
or omissions shall be treated as a single claim.” Id. at 857.
The court held that the term “related” is broad enough to
include “both logical and causal connections.” Id. at 873. It
went on to find that the contractor’s two claims were logically
related because they: (1) arose out of the same transaction, the
collection of a debt; (2) arose as to the same client; (3) were
committed by the same attorney; and (4) resulted in a single
injury, the loss of the debt. Id.

   [4] AISLIC contends that the Sitrick and Steinman Claims
are logically related under the teaching of Bay Cities. But
           FINANCIAL MANAGEMENT v. AMERICAN INT’L         14645
unlike the contractor in Bay Cities, whose one attorney made
two mistakes in the course of helping his client to reach a sin-
gle goal (collection of a debt), the Sitricks and Steinman are
separate clients with distinct goals. It was significant to the
Bay Cities court that the attorney’s two acts of malpractice
caused a single injury, and that either act would have caused
the same injury — the contractor was unable to collect pay-
ment for his work. “[W]hen two or more errors lead to the
same injury, they are — for that very reason — ‘related’
under any fair and reasonable meaning of the word.” Bay Cit-
ies, 5 Cal. 4th at 869. Steinman suffered a loss independent
of the loss to the Sitricks, and sued separately for recovery of
his separate loss.

   [5] AISLIC relies on two cases decided under the laws of
other states. Those cases do not require a different result. In
both Gregory v. Home Insurance Co., 876 F.2d 602 (7th Cir.
1989) and Continental Casualty Co. v. Wendt, 205 F.3d 1258
(11th Cir. 2000), the insured attorney committed a single
wrong — he gave the same advice to several parties to pro-
mote a single investment. In this case, the Sitricks and Stein-
man complained of different Wrongful Acts. The Sitricks
complained of various omissions and oral misrepresentations
made in connection with many different investment vehicles,
while Steinman complained about the FMA Parties’ breach of
a written agreement to put Steinman’s investment in a less
risky tranche of CBO II. We do not believe the term “related”
was intended to bar recovery whenever two parties are
advised to invest in the same fund. Nor are the Sitrick and
Steinman Claims logically related simply because both claim-
ants blamed the same financial advisor.

                         Conclusion

  [6] The district court erred in holding that the Sitrick and
Steinman Claims are related within the meaning of the AIS-
LIC insurance policies. For the foregoing reasons, we reverse
14646     FINANCIAL MANAGEMENT v. AMERICAN INT’L
and remand to the district court for proceedings consistent
with this opinion.

REVERSED AND REMANDED.
