BANNER BANK, a Washington banking corporation, Plaintiff - Appellee/Cross -Appellant,
FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, Defendant-Appellant/Cross -Appellee.
Appeals from the United States District Court for the
District of Utah (D.C. No. 2:16-CV-00200-BSJ)
E. Gizer (Sophia S. Lau, of Early Sullivan Wright Gizer &
McRae LLP; Los Angeles, California, and Sara E. Bouley of
Action Law LLC, Salt Lake City, Utah, with him on the
briefs), Early Sullivan Wright Gizer & McRae LLP; Los
Angeles, California, for Defendant -
L. Booher, (Michael D. Zimmerman, Freyja R. Johnson and Dick
J. Baldwin of Zimmerman, Booher, with him on the briefs),
Salt Lake City, Utah, for Plaintiff
PHILLIPS, KELLY, and CARSON, Circuit Judges.
and Cross-Appellee First American Title Insurance Co. appeals
from the district court's orders granting summary
judgment in favor of and attorneys' fees to
Plaintiff-Appellee and Cross-Appellant Banner Bank ("the
Bank"). The district court held that First
American had a duty to defend and indemnify its insured (the
Bank), breached the implied covenant of good faith and fair
dealing, and was responsible for attorneys' fees in this
case. This resulted in an award of damages ($675, 000) plus
attorneys' fees in an underlying lawsuit ($159, 288), and
consequential damages of attorneys' fees in this case
($130, 411.50). The Bank cross-appeals in the event that the
award of consequential damages was procedurally incorrect.
Our jurisdiction arises under 28 U.S.C. § 1291 and we
Jacobson was an insider of MSI, Inc., through which he
controlled two related LLCs. To secure loans from the Bank
for his businesses, Mr. Jacobson conveyed deeds of trust to
the Bank as collateral. See 1 J.A. 39-69. The Bank
then purchased a title insurance policy from First American
to cover those deeds of trust. See id. at 71-94.
Unfortunately for the Bank, Mr. Jacobson was apparently using
his businesses to operate a Ponzi scheme. When the Securities
and Exchange Commission filed an enforcement action against
Mr. Jacobson, a Receiver was appointed to represent his
creditors. Id. at 114-15. The Receiver then filed an
action against the Bank challenging the conveyances.
Id. at 114-17. Relying on the title policy, the Bank
requested that First American defend it in the Receiver's
action. Id. at 112. First American refused and
explained that the Receiver's action fell outside the
coverage of the policy. Id. at 134. The Bank
responded to First American's denial and disputed First
American's basis for refusing to defend. Id. at
136-38. First American reaffirmed its conclusion that it owed
no duty to defend. Id. at 140-41. The Bank and the
Receiver eventually entered a settlement for $675, 000.
Id. at 100-06. The Bank then brought this diversity
action against First American.
Bank's complaint contained five claims: (1) breach of
contract for failure to indemnify, (2) breach of contract for
failure to defend, (3) breach of the implied covenant of good
faith and fair dealing, (4) contingent breach of contract or
breach of implied covenant, and (5) declaratory relief.
Id. at 26-32. On cross-motions for summary judgment,
the district court granted summary judgment in favor of the
Bank on its claims for (1) breach of contract for failure to
indemnify, (2) breach of contract for failure to defend, and
(3) declaratory relief. 12 J.A. 2815. The district court held
that the claim for breach of the implied covenant of good
faith and fair dealing was subsumed into its findings on the
breach of express terms, and it found that it did not need to
decide the contingent breach of contract claim. Id.
The district court entered judgment consistent with those
findings, but it did not rule on the Bank's other damages
arguments related to prejudgment interest or consequential
damages. Id. at 2816.
American filed a notice of appeal to this court on June 7,
2017, id. at 2841; the Bank filed its own notice of
appeal (along with a motion to extend time to file the
notice) on July 13, 2017. Id. at 2859-67. Meanwhile
in the district court, the Bank (1) renewed its motion for
attorneys' fees from its summary judgment motion; (2)
moved, in the alternative, under Rule 54(d) for
attorneys' fees; and (3) moved under Rule 60 to set aside
the judgment to ensure the district court kept jurisdiction
until the damages issue was resolved. Id. at
November 7, 2017, we ordered a limited remand for the
district court to address the Bank's request for
attorneys' fees. Order, Banner Bank v. First Am.
Title Ins. Co., Nos. 17-4098 & 17-4112 (10th Cir.
Nov. 7, 2017), ECF No. 10511740. On remand, the district
court awarded the Bank attorneys' fees under its renewed
motion for attorneys' fees and denied the motions under
Rule 54(d) and Rule 60. 13 J.A. 3154-56. First American filed
another notice of appeal from that decision. Id. at
review a summary judgment decision de novo, and we use the
same standard the district court applied to determine if
summary judgment was warranted. See Birch v. Polaris
Indus., Inc., 812 F.3d 1238, 1251 (10th Cir. 2015). In
other words, we ask if the movant demonstrated there was no
genuine dispute as to any material fact and the movant was
entitled to judgment as a matter of law. See
Fed.R.Civ.P. 56(a). The factual record and reasonable
inferences that may be drawn from it are viewed in the light
most favorable to the nonmoving party. See Birch,
812 F.3d at 1251. Cross-motions for summary judgment are
treated as two individual motions for summary judgment and
held to the same standard, with each motion viewed in the
light most favorable to its nonmoving party.
Breach of Contract ...