                  FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ALEXANDER MANUFACTURING, INC.          
EMPLOYEE STOCK OWNERSHIP
                                            No. 07-35812
PLAN AND TRUST,
                Plaintiff-Appellant,
                                             D.C. No.
                                           CV-06-00735-PK
                 v.
                                             OPINION
ILLINOIS UNION INSURANCE CO.,
               Defendant-Appellee.
                                       
        Appeal from the United States District Court
                  for the District of Oregon
         Paul J. Papak, Magistrate Judge, Presiding

                  Argued and Submitted
             March 4, 2009—Portland, Oregon

                   Filed March 25, 2009

     Before: Susan P. Graber, Raymond C. Fisher, and
            Milan D. Smith, Jr., Circuit Judges.

                  Opinion by Judge Graber




                            3843
         ALEXANDER MANUFACTURING v. ILLINOIS UNION        3845




                         COUNSEL

Michael A. Maurer, Lukins & Annis, P.S., Spokane, Wash-
ington, for the plaintiff-appellant.

Donald J. Verfurth, Carney Badley Spellman, P.S., Seattle,
Washington, for the defendant-appellee.


                         OPINION

GRABER, Circuit Judge:

   Plaintiff Alexander Manufacturing, Inc. Employee Stock
Ownership Plan and Trust, the sole shareholder of Alexander
Manufacturing, Inc. (“AMI”), sued Defendant Illinois Union
Insurance Company, seeking to recover under an insurance
policy that Defendant had issued to AMI. Plaintiff was the
assignee of post-loss claims under the policy. The district
court held that, under Oregon law, the insurance policy’s anti-
assignment clause prevented post-loss assignment of the
claims to Plaintiff. We read the policy and Oregon law differ-
ently and, accordingly, reverse.

       FACTUAL AND PROCEDURAL HISTORY

   Plaintiff is an employee stock ownership plan, a pension
plan defined by 29 U.S.C. § 1002(2)(A) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), which
was organized in Oregon effective in 1998. Plaintiff was the
sole shareholder of AMI.
3846     ALEXANDER MANUFACTURING v. ILLINOIS UNION
   Plaintiff filed an action against three of its former fidu-
ciaries, William Klutho, Daniel Spofford, and Donald Thore-
son, alleging breach of fiduciary duty under ERISA. These
same individuals were also former directors and officers of
AMI. Plaintiff also brought a derivative action against them,
alleging that they had breached certain duties owed as direc-
tors and officers of AMI.

   AMI had previously purchased an insurance policy from
Defendant, covering the period from January 1, 2003, to Janu-
ary 1, 2004. Under the insurance policy, AMI had “Directors
& Officers and Company” coverage with a limit of $1 mil-
lion. AMI also had fiduciary liability coverage with an addi-
tional limit of $1 million. The policy contained an anti-
assignment clause, which stated that “[a]ssignment of interest
under this Policy shall not bind Insurer unless their consent is
endorsed hereon.”

  Plaintiff resolved the claims against Klutho, Spofford, and
Thoreson through a settlement agreement for $1.3 million.
The settlement agreement contained the following clause:

       Klutho, Spofford and Thoreson hereby each
    assign to [Plaintiff] any and all claims and/or causes
    of action each may possess against [Defendant]
    relating to, but not by means of limitation any and all
    rights or obligations relating to policy number
    BMI20004728. It is not the intent of the parties
    through this assignment to extinguish any claims
    which Klutho, Spofford and Thoreson may have
    against the insurance company, and this assignment
    therefore, does not release Klutho, Spofford and
    Thoreson from the liability, nor should it be con-
    strued in any way [to] affect any obligation of
    indemnity on the part of the insurance company.

The individuals paid $10,000 each and then assigned their
rights under Defendant’s insurance policy to Plaintiff. Plain-
         ALEXANDER MANUFACTURING v. ILLINOIS UNION         3847
tiff agreed not to execute the remainder of the judgment
against the individuals and to bring the claim against Defen-
dant instead. Defendant consented neither to the settlement
agreement nor to the assignment of the policy to Plaintiff.

  Plaintiff filed the present action against Defendant for
breach of the duty to indemnify and breach of the duty of
good faith and fair dealing. The parties filed cross-motions for
summary judgment on the issue of assignability of claims.
After briefing and oral argument, the district court granted
Defendant’s motion for summary judgment, denied Plaintiff’s
cross-motion for summary judgment, and dismissed the case.
Plaintiff timely appeals.

                STANDARDS OF REVIEW

   We review de novo the district court’s grant of summary
judgment and may affirm on any ground supported by the
record. Dietrich v. John Ascuaga’s Nugget, 548 F.3d 892, 896
(9th Cir. 2008). We must determine, viewing the evidence in
the light most favorable to the nonmoving party, whether
there are any genuine issues of material fact and whether the
district court correctly applied the relevant substantive law.
Id.

                        DISCUSSION

A.   Applicable Law

   We have diversity jurisdiction, so we must follow Oregon
law with respect to the interpretation of the insurance policy.
Kabatoff v. Safeco Ins. Co. of Am., 627 F.2d 207, 209 (9th
Cir. 1980). Three decisions by the Oregon Supreme Court are
relevant to our analysis: Groce v. Fid. Gen. Ins. Co., 448 P.2d
554 (Or. 1968); Hoffman Constr. Co. of Alaska v. Fred S.
James & Co., 836 P.2d 703 (Or. 1992); and Holloway v.
Republic Indem. Co. of Am., 147 P.3d 329 (Or. 2006).
3848      ALEXANDER MANUFACTURING v. ILLINOIS UNION
   [1] Groce addressed an anti-assignment provision that is
almost identical to the provision in this case. The provision in
Groce read: “Assignment of interest under this policy shall
not bind the company until its consent is endorsed hereon.”
448 P.2d at 559 (alterations omitted). The insurer in Groce
had argued that the text of the provision prohibited the assign-
ment of post-loss causes of action against the insurer without
the insurer’s endorsement. Id. The Oregon Supreme Court
rejected that argument summarily, stating:

    But the contention that such a clause prohibits the
    insured from assigning his cause of action need not
    detain us. It is well settled that such a provision does
    not preclude the assignment of a cause of action for
    damages for breach of a contract.

Id. The court supported its statement by citing only California
state law cases.

   In Hoffman, the Oregon Supreme Court set forth an analyti-
cal approach to the construction of insurance contracts. 836
P.2d at 706-07. Noting that interpretation of insurance con-
tracts is a question of law, the court stated that the “ ‘primary
and governing rule of the construction of insurance contracts
is to ascertain the intention of the parties.’ ” Id. at 706 (quot-
ing Totten v. N.Y. Life Ins. Co., 696 P.2d 1082, 1086 (Or.
1985)). The court held that “[w]e determine the intention of
the parties based on the terms and conditions of the insurance
policy.” Id.

  At issue in Hoffman was how to interpret the phrase
“amount recoverable.” Id. at 705. The plaintiff and the defen-
dant offered competing, “plain meaning” interpretations. Id.
The plaintiff argued that, because the term reasonably could
be interpreted in two ways, it was ambiguous and should be
construed against the insurer, who drafted the policy. Id. The
Oregon Supreme Court disagreed, holding that, before resort-
          ALEXANDER MANUFACTURING v. ILLINOIS UNION          3849
ing to the rule of construction against the insurer, a court must
engage in a series of analytical steps:

    In other words, a term is ambiguous in a sense that
    justifies application of the rule of construction
    against the insurer only if two or more plausible
    interpretations of that term withstand scrutiny, i.e.,
    continues to be reasonable, after the interpretations
    are examined in the light of, among other things, the
    particular context in which that term is used in the
    policy and the broader context of the policy as a
    whole.

Id. Thus, if one possible meaning of a term is not reasonable
in light of the other provisions of the policy, leaving only the
other reasonable interpretation of the term, there is no remain-
ing ambiguity. In such a case, “resort to the rule that ambigui-
ties are construed against the insurer is inappropriate.” Id. at
709.

   In 2006, the Oregon Supreme Court reaffirmed the analyti-
cal approach in Hoffman when it construed an anti-assignment
clause in an insurance policy. Holloway, 147 P.3d at 333-35.
In Holloway, the plaintiff sued the insured, claiming that she
had been sexually harassed while employed by the insured.
Id. at 331-32. The insurer refused to defend and indemnify the
insured. Id. at 332. The plaintiff and the insured settled the
case and, under the settlement, the insured assigned to the
plaintiff the insured’s right to defense and indemnity under
the insurance policy. Id. Once she received the assignment,
the plaintiff filed an action for breach of contract against the
insurer. Id. The insurance policy contained an anti-assignment
clause that provided: “Your rights or duties under this policy
may not be transferred without our written consent.” Id. at
331.

  The Oregon Court of Appeals held that the provision was
ambiguous because it did not define which particular rights or
3850       ALEXANDER MANUFACTURING v. ILLINOIS UNION
duties could not be assigned and, therefore, construed the
clause in favor of the insured. Id. at 332-33. The Oregon
Supreme Court reversed after reaffirming and elaborating on
the analytical approach introduced in Hoffman. Id. The court
held that, if the insurance policy explicitly defines the phrase
in question, the court applies that definition. Id. If the policy
does not define the phrase in question, the court must consider
whether the phrase has a plain meaning. Id. If the phrase in
question has a plain meaning, the court must apply that mean-
ing and no further analysis is needed. Id. If the phrase in ques-
tion has more than one plausible interpretation, the court must
then examine the context in which the phrase is used and the
broader context of the policy as a whole. Id. at 333-34. It is
only after this full contextual examination that any remaining
ambiguity should be construed against the drafter. Id. at 334.

   Following this framework, the Oregon Supreme Court held
that the anti-assignment clause in Holloway was not ambigu-
ous and that the provision was broadly worded to include both
pre-loss and post-loss rights. Id. at 335. Specifically, the court
held that “the clause applies to whatever rights or duties the
insured may have under the policy” and that “[n]othing in the
clause suggests a limitation to pre-loss rights or duties or pro-
vides an exception for post-loss rights or duties.” Id. at 334.
The court further held that “[r]eading such an exception into
the policy would not be reasonable.” Id. In holding the assign-
ment invalid, the court distinguished contrary authority from
other jurisdictions on the ground that those courts did not fol-
low Oregon’s analytical approach to the construction of insur-
ance contracts. Id. at 335.

B.     Interpretation of the Anti-Assignment Clause

   The parties dispute what Oregon law requires us to do as
we interpret the anti-assignment clause before us. Plaintiff
argues that Groce remains good law and stands for the propo-
sition that an anti-assignment clause worded like this one
applies only to pre-loss assignments. Defendant argues that
           ALEXANDER MANUFACTURING v. ILLINOIS UNION                3851
Holloway holds that any anti-assignment clause that fails to
limit its scope expressly must be interpreted to apply to pre-
loss and post-loss rights, thus implicitly overruling Groce and
controlling our decision.

   [2] We agree with Plaintiff. Groce declared a substantive
rule of law concerning the interpretation of a specific clause
in insurance contracts. The clause at issue in that case—
“Assignment of interest under this policy shall not bind the
company until its consent is endorsed hereon,” Groce, 252 Or.
at 306 (alterations omitted), was materially identical to the
clause here—“Assignment of interest under this Policy shall
not bind Insurer unless their consent is endorsed hereon.”
Hoffman provided a method for analyzing insurance contracts
in the future but did not overrule any previous substantive
case, including Groce. In fact, the Oregon Supreme Court did
not even mention Groce in either Hoffman or Holloway. The
court did not suggest that every pre-Hoffman case, which, by
definition, had not applied Hoffman’s analytical steps, was
overruled.

   [3] Furthermore, the rule set forth in Groce, that this anti-
assignment clause applies only to pre-loss assignments, is not
undercut by the Hoffman methodology. Even if Groce were
not binding, this anti-assignment clause is ambiguous.1 There
are two plausible interpretations of the term “interest”: one in
which “interest” does not encompass post-loss assignments,
and one in which “interest” does apply to post-loss as well as
pre-loss assignments. See Hoffman, 836 P.2d at 706.

   Regarding the first interpretation, “interest” plausibly could
refer to a financial stake in the policy, as distinct from a finan-
cial stake in a post-loss cause of action. In that sense, no “in-
terest” in the policy may be assigned, for the sensible reason
that the insurer accepts only the known risk of a particular
  1
   Holloway is not instructive in applying Hoffman here, because the anti-
assignment clauses are worded very differently.
3852      ALEXANDER MANUFACTURING v. ILLINOIS UNION
insured. See 16 Samuel Williston & Richard A. Lord, A Trea-
tise on the Law of Contracts § 49.51, at 420 (4th ed. 2000).
That purpose is irrelevant after a known loss already has
occurred. A definition of the term “interest” in Black’s Law
Dictionary supports this reading: “A legal share in something;
all or part of a legal or equitable claim to or right in property.”
Black’s Law Dictionary 828 (8th ed. 2004). The words that
follow “interest” in the anti-assignment clause also support
this reading: The clause precludes assignment of an “interest
under this policy” (emphasis added), not an interest in later
causes of action.

   On the other hand, “interest” could be understood to
include both pre- and post-loss assignments. An alternate def-
inition of “interest” contained in Black’s Law Dictionary is
the following: “Collectively, the word includes any aggrega-
tion of rights, privileges, powers, and immunities; distribu-
tively, it refers to any one right, privilege, power, or
immunity.” Id. Under that definition, one plausibly could
interpret “interest” in the anti assignment clause to encompass
all rights, including post-loss assignments.

   [4] Reviewing the greater context of “interest” and other
provisions of the policy, we find no clues to determine which
of the two plausible interpretations was intended by the par-
ties. When both interpretations are reasonable in light of the
other provisions of the policy, the court must resort to the rule
of construction against the insurer. Hoffman, 836 P.2d at 706.
Defendant drafted the anti-assignment clause, so we construe
the term against it. The usual presumption against the drafter
applies with particular force here in view of the clear rule of
Groce; Defendant chose a nearly identical anti-assignment
clause with constructive knowledge of its meaning. Because
Plaintiff’s interpretation of the anti-assignment clause is rea-
sonable in context, because Defendant drafted it, and because
Defendant chose a clause with a known meaning under Ore-
gon law, we hold that the anti-assignment clause at issue in
this case excludes post-loss assignments.
    ALEXANDER MANUFACTURING v. ILLINOIS UNION   3853
REVERSED.
