                                                                            FILED
                           NOT FOR PUBLICATION
                                                                             FEB 11 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


LANA R. STAHELI, Ph.D. and LYNN T.               No.   16-35480
STAHELI, M.D.,
                                                 D.C. No. 2:16-cv-00096-JCC
              Plaintiffs-Appellants,

 v.                                              MEMORANDUM*

CHICAGO INSURANCE COMPANY, a
foreign corporation,

              Defendant-Appellee.


                    Appeal from the United States District Court
                      for the Western District of Washington
                   John C. Coughenour, District Judge, Presiding

                           Submitted February 7, 2019**
                               Seattle, Washington

Before: IKUTA and CHRISTEN, Circuit Judges, and FREUDENTHAL,***
District Judge.



      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
              The Honorable Nancy D. Freudenthal, United States District Judge for
the District of Wyoming, sitting by designation.
      Plaintiffs-Appellants Lana and Lynn Staheli, together with their “marital

community,” appeal the district court’s order dismissing their diversity suit against

Chicago Insurance Company (“CIC”) and ACE American Insurance Company

(“ACE”) (collectively, “Defendants”). We have jurisdiction under 28 U.S.C.

§ 1291 and we affirm.1

1.    Mr. Staheli’s and the Stahelis’ Marital Community’s Claims. “We review

de novo the district court’s decision to grant [a] motion to dismiss . . . . We accept

factual allegations in the complaint as true and construe the pleadings in the light

most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins.

Co., 519 F.3d 1025, 1031 (9th Cir. 2008) (internal citations and quotation marks

omitted).

      To determine whether an insurer owes a duty to defend a claim, Washington

courts look to whether “a complaint against [an] insured alleges facts which, if

proved, would render the insurer liable under the policy.” Harrison Plumbing &

Heating, Inc. v. N.H. Ins. Grp., 681 P.2d 875, 877 (Wash. Ct. App. 1984)

(emphasis added). It is clear from the record that neither Mr. Staheli nor the

marital community are named insureds on either policy. By the plain terms of the



      1
            Because the parties are familiar with the facts and arguments on
appeal, we do not recite them here.
                                           2
policies, then, Defendants owed no duty to defend Mr. Staheli or the marital

community. See, e.g., Safeco Ins. Co. of Am. v. Davis, 721 P.2d 550, 552 (Wash.

Ct. App. 1986) (“Language in an insurance policy should be interpreted in the way

it would be understood by the average person.”). The Stahelis’ contention that a

judgment might require the expenditure of marital community assets does not

change this analysis because liability would still rest exclusively with Dr.

Staheli—the marital community is not a legal entity that can be liable, see, e.g.,

deElche v. Jacobsen, 622 P.2d 835, 839 (Wash. 1980) (en banc), and there were no

allegations against Mr. Staheli in the underlying state lawsuit. Likewise, Mr.

Staheli and the Staheli marital community are not third-party beneficiaries to the

CIC and ACE policies because the policies were not intended to benefit them. See

Postlewait Const., Inc. v. Great Am. Ins. Cos., 720 P.2d 805, 806 (Wash. 1986) (en

banc).

         We conclude that Defendants did not owe a duty to Mr. Staheli or the

marital community to defend the underlying state lawsuit because neither qualified

as an “insured.” We also conclude that Defendants did not breach any contractual

agreements with Mr. Staheli or the marital community. See Greer v. Nw. Nat’l Ins.

Co., 743 P.2d 1244, 1247–48 (Wash. 1987) (en banc). Mr. Staheli’s and the

marital community’s claims for breach of the duty of good faith and violations of


                                           3
the Washington Consumer Protection Act and Insurance Fair Conduct Act falter on

the same shoals. See Tank v. State Farm Fire & Cas. Co., 715 P.2d 1133, 1139

(Wash. 1986) (en banc).

2.    Dr. Staheli’s Claims. Defendants undisputedly hired a lawyer for Dr. Staheli

in the underlying state court litigation and paid the eventual settlement. They thus

performed their contractual duties to defend and indemnify. We conclude that any

claims Dr. Staheli brought based on a breach of contract, the duty to defend, the

duty of good faith, or the Consumer Protection Act were therefore properly

dismissed.

      We further conclude that Dr. Staheli failed to state a claim for a violation of

the Insurance Fair Conduct Act because that statute requires as an element that an

insurer “unreasonably denied a claim for coverage[.]” Wash. Rev. Code §

48.30.015(1) (2018). The complaint does not allege that Defendants denied Dr.

Staheli’s claim for coverage.

      AFFIRMED.




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