                                                                           FILED
                           NOT FOR PUBLICATION
                                                                            FEB 15 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT

FOREMOST INSURANCE COMPANY                       Nos. 15-55869
GRAND RAPIDS, a Michigan                              15-55988
Corporation,
                                                 D.C. No.
             Plaintiff-counter-                  3:13-cv-01604-H-DHB
             defendant-Appellee-Cross-
             Appellant,
                                                 MEMORANDUM*
 v.

BENJAMIN EVANS,

              Defendant,

 and

JIMMY ENRIQUEZ,

              Defendant-counter-claimant-
              Appellant-Cross-Appellee.


                   Appeals from the United States District Court
                      for the Southern District of California
                    Marilyn L. Huff, District Judge, Presiding

                      Argued and Submitted February 7, 2017
                               Pasadena, California



       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: GRABER, BYBEE, and CHRISTEN, Circuit Judges.

      Jimmy Enriquez appeals the entry of partial summary judgment in favor of

Foremost Insurance Company Grand Rapids on Foremost’s duty to indemnify

Enriquez for personal injury claims arising out of a motocross motorcycle accident

and Enriquez’s counterclaims for breach of contract and breach of the covenant of

good faith and fair dealing. Foremost cross-appeals the district court’s order

granting summary judgment to Enriquez on Foremost’s duty to defend Enriquez

and Foremost’s unjust enrichment claims against Enriquez.

      We have jurisdiction under 28 U.S.C. § 1291. California substantive law

governs the interpretation of insurance policy provisions in this diversity case.

Stanford Univ. Hosp. v. Fed. Ins. Co., 174 F.3d 1077, 1083 (9th Cir. 1999) (citing

28 U.S.C. § 1652). “We review cross-motions for summary judgment de novo,”

Bader v. N. Line Layers, Inc., 503 F.3d 813, 816–17 (9th Cir. 2007), and we

affirm.

      1.     The district court correctly concluded that Foremost did not have a

duty to indemnify Enriquez. The insurance policy excluded the bodily injury

claims brought against Enriquez because they “ar[ose] out of the ownership,

operation, maintenance, use, loading or unloading of . . . [a] recreational land

motor vehicle,” the “entrustment” of such vehicle to another person, and the


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“negligent supervision” by Enriquez of another person using such a vehicle.

Enriquez did not put forth sufficient evidence to create a genuine dispute of

material fact about whether a concurrent independent act, such as fireworks or the

proximity of Enriquez’s truck and trailer to the road, caused the accident. See

Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1061 (9th Cir. 2011) (“To

survive summary judgment, a plaintiff must set forth non-speculative evidence of

specific facts, not sweeping conclusory allegations.”); see also State Farm Mut.

Auto. Ins. Co. v. Partridge, 514 P.2d 123, 129 (Cal. 1973) (holding that, when an

insured risk and an uninsured risk constitute concurrent independent causes of an

injury, “the insurer is liable so long as one of the causes is covered by the policy”).

      Enriquez’s waiver and estoppel arguments fail. Foremost consistently and

directly informed Enriquez that it was defending him under a reservation of rights

in numerous letters and phone calls, and an in-house attorney’s potentially

conflicting statements in two instances do not rise to the level of waiver. See

Waller v. Truck Ins. Exch., Inc., 900 P.2d 619, 637 (Cal. 1995) (“California courts

will find waiver when a party intentionally relinquishes a right or when that party’s

acts are so inconsistent with an intent to enforce the right as to induce a reasonable

belief that such right has been relinquished.” (quoting Intel Corp. v. Hartford Acc.

& Indem. Co., 952 F.2d 1551, 1559 (9th Cir. 1991)). Estoppel cannot create


                                           3
coverage where none exists. Advanced Network, Inc. v. Peerless Ins. Co., 119 Cal.

Rptr. 3d 17, 27 (Ct. App. 2010) (“[I]t is the general and quite well settled rule of

law that the principles of estoppel and implied waiver do not operate to extend the

coverage of an insurance policy after the liability has been incurred or the loss

sustained.” (alteration in original) (internal quotation marks omitted)).

      2.     The district court did not err by concluding that Foremost is not

entitled to reimbursement for the cost of settling the underlying action, because

Foremost did not comply with all the prerequisites for seeking reimbursement of a

noncovered claim under Blue Ridge Insurance Co. v. Jacobsen, 22 P.3d 313 (Cal.

2001).

      3.     The district court correctly concluded that Foremost had a duty to

defend Enriquez. See Hartford Cas. Ins. Co. v. Swift Distribution, Inc., 326 P.3d

253, 258 (Cal. 2014) (holding that insurers owe a duty to defend against a claim

that is potentially covered, even if the claim is ultimately not covered under the

policy). “The defense duty arises upon tender of a potentially covered claim and

lasts until the underlying lawsuit is concluded, or until it has been shown that there

is no potential for coverage.” Scottsdale Ins. Co. v. MV Transp., 115 P.3d 460, 466

(Cal. 2005). “Determination of the duty to defend depends, in the first instance, on

a comparison between the allegations of the complaint and the terms of the policy.


                                           4
But the duty also exists where extrinsic facts known to the insurer suggest that the

claim may be covered.” Id. (citation omitted).

      Here, the original complaint in the underlying action alleged only negligent

supervision, which was potentially covered by the insurance policy. It did not

mention a recreational motor vehicle. Foremost knew of the police report, which

described the accident as occurring on a recreational motor vehicle, but other

extrinsic facts could have allowed for coverage, including Enriquez’s theory that

the ambulance driver was distracted by the truck and trailer or by fireworks. See

N. Ctys. Eng’g, Inc. v. State Farm Gen. Ins. Co., 169 Cal. Rptr. 3d 726, 739 (Ct.

App. 2014) (“If coverage depends on an unresolved dispute over a factual

question, the very existence of that dispute would establish a possibility of

coverage and thus a duty to defend.”). Foremost had a duty to defend Enriquez at

least “until it ha[d] been shown that there is no potential for coverage” and is not

entitled to reimbursement for defense costs. See Scottsdale, 115 P.3d at 466.

      4.     The district court did not err by concluding that Foremost is not liable

for breach of contract or breach of the covenant of good faith and fair dealing,

because the insurance policy did not provide coverage. See Kransco v. Am. Empire

Surplus Lines Ins. Co., 2 P.3d 1, 14 (Cal. 2000) (“[W]ithout coverage there can be

no liability for bad faith on the part of the insurer.”); Ward Gen. Ins. Servs., Inc. v.


                                            5
Empl’rs Fire Ins. Co., 7 Cal. Rptr. 3d 844, 853 (Ct. App. 2004) (“Since no

coverage was provided by the policy, defendant’s denial of coverage manifestly

was a breach of neither the contract nor the covenant of good faith and fair

dealing.”).

      AFFIRMED.




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