                                                                           FILED
                           NOT FOR PUBLICATION                              JUL 08 2010

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



MW BUILDERS, INC., a Missouri                    No. 09-35538
corporation; GREAT AMERICAN
ALLIANCE INSURANCE COMPANY,                      D.C. No. 3:02-cv-01578-AC
an Ohio corporation,

              Plaintiffs - Appellees,            MEMORANDUM *

  v.

SAFECO INSURANCE COMPANY OF
AMERICA, a Washington corporation;
SAFECO INSURANCE COMPANY OF
OREGON, an Oregon corporation;
AMERICAN STATES INSURANCE
COMPANY, an Indiana corporation,

              Defendants - Appellants,

  And

ELLIOTT, POWELL, BADEN &
BAKER, INC., an Oregon corporation;
REX & COMPANY, an Oregon
corporation; LAWRENCE REX ESTATE,
by and through its personal representative;
LAWRENCE REX TRUST, by and
through its Trustee, L.V. Rex,



        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
              Defendants.



                   Appeal from the United States District Court
                             for the District of Oregon
                 Ancer L. Haggerty, Senior District Judge, Presiding

                        Argued and Submitted June 10, 2010
                                 Portland, Oregon

Before: THOMPSON, McKEOWN and PAEZ, Circuit Judges.


      Defendants Safeco Insurance Company of America and its affiliates

(collectively “Safeco”) appeal the district court’s judgment, following our remand,

in favor of MW Builders, Inc., and its subrogated insurer (collectively “MW

Builders”). We have jurisdiction under 28 U.S.C. § 1291, and we reverse and

remand.

      In the prior appeal, we concluded that Safeco was obligated to cover certain

repair costs but not others, and remanded to the district court to partition the

$620,000 arbitration award between covered and uncovered costs. On remand, the

district court referred the matter to the magistrate judge who ordered the parties to

conduct discovery and file cross motions for summary judgement. The magistrate

judge concluded that sixty percent of the $620,000 arbitration award represented

covered costs and recommended that MW Builders be awarded $372,000. The


                                           2
district court, however, overruled the magistrate judge’s recommendation and

granted MW Builders the entire $620,000 arbitration award. “We review de novo

the district court’s rulings on cross-motions for summary judgment.” Caliber One

Indem. Co. v. Wade Cook Fin. Corp., 491 F.3d 1079, 1082 (9th Cir. 2007).

         The district court erred in granting MW Builders the entire arbitration award

because that award included uncovered repair costs, which we previously

instructed the court to partition from the covered repair costs.1 We know that the

arbitration award included uncovered repair costs because it was calculated as a

percentage of MW Builders’ $2 million settlement that was based, in part, on

$629,960 in uncovered repair costs. The magistrate judge reasonably partitioned

these uncovered costs from the covered costs and recommended that MW Builders

be awarded sixty percent of the arbitration award pursuant to this court’s prior

order.

         The district court’s decision to award MW Builders the entire arbitration

award notwithstanding the fact that the award included some uncovered costs was

improper. That the actual repair costs, excluding uncovered repairs, ended up



         1
         Because we conclude that the arbitration award included uncovered costs
that must be partitioned, we need not resolve Safeco’s other contentions regarding
the law of the case doctrine and which party bears the burden of proof to establish
an allocation between covered and uncovered claims under Oregon law.

                                            3
exceeding the $620,000 arbitration award does not justify awarding MW Builders

the entire award. MW Builders was never entitled to recover all the repair costs

from Safeco. It was only entitled to recover a portion of the damage to the hotel

caused by Safeco’s insured.

      We therefore reverse the district court’s decision to award MW Builders the

entire $620,000 arbitration award, and remand for the district court to modify the

judgment to reflect an award of $372,000 in favor of MW Builders, the amount of

covered costs recommended by the magistrate judge.

      REVERSED AND REMANDED.




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