                                                                            FILED
                           NOT FOR PUBLICATION
                                                                             MAY 17 2016
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT


HOLLYWAY CLEANERS & LAUNDRY                      No. 15-55973
COMPANY, INC.; et al.,
                                                 D.C. No. 2:13-cv-07497-ODW-E
              Plaintiffs - Appellants,

 v.                                              MEMORANDUM*

CENTRAL NATIONAL INSURANCE
COMPANY OF OMAHA, INC.,

              Defendant - Appellee.


                    Appeal from the United States District Court
                       for the Central District of California
                    Otis D. Wright II, District Judge, Presiding

                              Submitted May 2, 2016**
                                Pasadena, California

Before: PREGERSON, BYBEE, and N.R. SMITH, Circuit Judges.

      Appellee Central National Insurance Company of Omaha, Inc. issued a

liability insurance policy to appellant Hollyway Cleaners & Laundry, a dry


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
cleaning business. Hollyway was sued in California state court for contaminating

its premises with cleaning solvents. Hollyway asked Central Insurance, its insurer,

to defend Hollyway under the parties’ policy. But Central Insurance refused, and

Hollyway brought this action requesting a declaration that Central Insurance must

defend Hollyway in the California case. The district court granted summary

judgment to Central Insurance, holding that the insurer had no duty to defend

Hollyway because there was no evidence that could possibly trigger Central

Insurance’s liability. We reverse and remand back to the district court.

      We review a grant of summary judgment de novo. Padfield v. AIG Life Ins.

Co., 290 F.3d 1121, 1124 (9th Cir. 2002).

      Notably, “the insurer has a higher burden than the insured” on a summary

judgment motion disputing a duty to defend. Am. States Ins. Co. v. Progressive

Cas. Ins. Co., 180 Cal. App. 4th 18, 27 (2009). The insurer is only relieved of its

duty if it can conclusively prove there is no potential coverage. Id. In other words,

“the insured need only show that the underlying claim may fall within policy

coverage; the insurer must prove it cannot.” Id. (citation omitted); see also Gray v.

Zurich Ins. Co., 65 Cal. 2d 263, 275 (1966).

      Central Insurance’s liability under the policy is triggered only in the event of

an accidental spill. The parties agree that the sole question is whether Central


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Insurance has conclusively proven that there were no “accidental” spills of solvent

at Hollyway’s store.

      California courts have explained that “accidental,” in this context, means

that an event was both (1) unintentional and (2) unexpected. No one contends

Hollyway's spills were intentional; the question is whether Central Insurance has

proven that all spills at Hollyway’s were “expected” and thus not an accident under

the Hollyway’s policy.

      To show a spill was expected in this context, the insurer must prove that the

insured “subjectively knew or believed [the spill] was highly likely to occur.”

State v. Allstate Ins. Co., 45 Cal. 4th 1008, 1024 (2009). Spills must occur

regularly before California courts will find, as a matter of law, that a reasonable

jury must find that the insured subjectively expected a spill. Id. at 1027. For

example, in one case, “four or five spills” over the course of several years “hardly

constituted” an “expected” event. A-H Plating, Inc. v. Am. Nat'l Fire Ins. Co., 57

Cal. App. 4th 427, 438 (1997).

      Taking all evidence in the light most favorable to Hollyway, there is a

genuine dispute as to whether accidental spills occurred at Hollyway’s store.

Hollyway’s employees, Hollyway’s owner, and an independent solvent delivery

driver all testified that solvent spills occurred on the premises. And none of the


                                           3
evidence in the record indicates that these spills happened with such frequency that

they were, as a matter of law, expected. The few spills described in the record

were less frequent than the spills the court found insufficient to foreclose the

insurer’s duty to defend in A-H Plating.

      Central Insurance failed to meet its heavy burden to prove conclusively that

there is no potential for coverage in this case. Because there is a genuine dispute

of fact as to whether Central Insurance is liable under Hollyway’s policy, summary

judgment was inappropriate.

REVERSED and REMANDED.




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