                                                                           FILED
                           NOT FOR PUBLICATION                              SEP 29 2011

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




                            FOR THE NINTH CIRCUIT



ADMIRAL INSURANCE COMPANY,                       No. 10-15830

            Plaintiff-Appellee,                  D.C. 5:07-cv-04185 JF

  v.
                                                 MEMORANDUM *
PIF HIGH YIELD FUND II, formerly
known as WM Trust High Yield Fund; PIF
INCOME FUND, formerly known as WM
Trust Income Fund; PVC INCOME
ACCOUNT, formerly known as WM
Variable Trust Income Fund; TONGA
PARTNERS, L.P.; ANEGADA MASTER
FUND, LTD.; CUTTYHUNK FUND,
LTD.; CANNELL CAPITAL, L.L.C.;
NEBO INVESTMENT FUND,

            Counter-claimants-Appellants.

SONICBLUE INCORPORATED,

            Debtor.




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
ADMIRAL INSURANCE COMPANY,                     No. 10-16020

            Plaintiff-Appellant,               D.C. No. C 07-4185

  v.

PIF HIGH YIELD FUND II, formerly
known as WM Trust High Yield Fund; PIF
INCOME FUND, formerly known as WM
Trust Income Fund; PVC INCOME
ACCOUNT, formerly known as WM
Variable Trust Income Fund; TONGA
PARTNERS, L.P.; ANEGADA MASTER
FUND, LTD.; CUTTYHUNK FUND,
LTD.; CANNELL CAPITAL, L.L.C.;
NEBO INVESTMENT FUND,

            Counter-claimants-Appellees.

SONICBLUE INCORPORATED,

            Debtor.



                   Appeal from the United States District Court
                      for the Northern District of California
                    Jeremy D. Fogel, District Judge, Presiding

                       Argued and Submitted May 13, 2011
                            San Francisco, California

Before: W. FLETCHER and N.R. SMITH, Circuit Judges, and MILLS,** Senior
District Judge.




       **
             The Honorable Richard Mills, Senior United States District Judge for
the Central District of Illinois, sitting by designation.
      A group of holders of notes issued by now-defunct SONICblue, Inc. (the

“1996 Bondholders”) appeal the district court’s grant of summary judgment to

Admiral Insurance Company (“Admiral”) on the basis of recision, and the district

court’s denial of the 1996 Bondholders’ cross-motion for summary judgment.

Admiral cross-appeals, challenging the district court’s denial of the alternative

bases for relief contained in its motion for summary judgment. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

      “We review a district court’s decision on cross-motions for summary

judgment de novo.” Avery v. First Resolution Mgmt. Corp., 568 F.3d 1018, 1021

(9th Cir. 2009). “The meaning and construction of an insurance policy is a

question of law reviewed de novo. Words used in an insurance policy are to be

interpreted according to the plain meaning that a layperson would attach to them.”

Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1147 (9th Cir. 1998) (citation

omitted).

      The November 14, 2002, letter constituted a written demand for money or

services. Therefore, SONICblue should have revealed the letter to Admiral in

response to question 24 of the policy application. As a result, recision is warranted

in this case. See Nieto v. Blue Shield of Cal. Life & Health Ins. Co., 181 Cal. App.




                                          3
4th 60, 75-78 (2010); Mitchell v. United Nat’l Ins. Co., 127 Cal. App. 4th 457,

468-69 (2005).

      Accordingly, we affirm the district court’s grant of summary judgment on

the recision claim. The 1996 Bondholders’ remaining arguments are unavailing.

      Because we affirm on the recision claim, we do not reach the issues raised

by Admiral in the cross-appeal.

      AFFIRMED.




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