Argonaut Great Central Insurance Company v. C&kmarket, Inc.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARGONAUT GREAT CENTRAL
INSURANCE COMPANY,
Plaintiff-Appellee,
v.
C&K MARKET, INC.,
Defendant-Appellee,
PAUL R. DANOFF; KIM L. DANOFF;
DANOFF FAMILY TRUST 2000,
Defendants-Appellants.
No. 16-35483
D.C. No. 6:15-cv-01466-MC
MEMORANDUM*
Appeal from the United States District Court
for the District of Oregon
Michael J. McShane, District Judge, Presiding
Argued and Submitted March 7, 2018
Portland, Oregon
Before: FISHER, N.R. SMITH, and HURWITZ, Circuit Judges.
FILED
MAR 23 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

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Paul R. Danoff, Kim L. Danoff, and the Danoff Family Trust 2000
(collectively “Danoff”) appeal the district court’s grant of summary judgment to
Argonaut Great Central Insurance Company. We have jurisdiction under 28 U.S.C.
§ 1291, and we affirm.
Under Oregon law, the loss payee “must claim in the right of the insured,
and not in his own right.” Armbrust v. Travelers Ins. Co., 376 P.2d 669, 671 (Or.
1962) (en banc). “The party named [as loss payee] does not recover in the event of
loss as the party insured, but as the beneficiary under the policy in the right of the
insured. . . . Hence it is the damage sustained by the party insured and not by the
party appointed to receive payment that is recoverable from the insurer.” Transp.
Equip. Rentals, Inc. v. Or. Auto Ins. Co., 478 P.2d 620, 623 (Or. 1970) (quoting
Charles R. Allen, Inc. v. R.I. Ins. Co., 60 S.E.2d 609, 613 (S.C. 1950)). Therefore,
to recover under the Argonaut policy, Danoff (as loss payee) must be able to
demonstrate that C&K Market, Inc. (the insured) sustained a loss. Danoff argues it
is entitled to payment for (1) missing fixtures and equipment; (2) damage to the
building; and (3) business income.
First, Danoff is not entitled to payment for the fixtures and equipment. C&K
Market has not claimed any losses regarding the equipment and fixtures. Any
liability between Danoff and C&K Market was settled in the bankruptcy court, and
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Danoff has not represented that it obtained the rights to C&K Market’s claim
against Argonaut. Further, there is no evidence that C&K Market did not the own
the equipment and fixtures it removed. A representative of C&K Market testified
that it removed only its own items, and (a) Danoff admits he never inspected the
building, (b) there is no sale evidence demonstrating that the missing equipment
was actually purchased by Danoff, (c) the sale agreement for the sale from C&K
Market to Crest Net Lease, Inc. is silent regarding fixtures and equipment, and (d)
evidence about the various building plans does not demonstrate ownership.
Second, Danoff is not entitled to payment for damage to the building. C&K
Market did not make a claim for losses and any liability between C&K Market and
Danoff was settled in the bankruptcy action. Further, even if C&K Market caused
damage, Danoff has not proven that C&K Market suffered a loss, and, under the
policy, Danoff cannot bring a claim for its own damages.
Finally, under the loss payee terms of the insurance policy, Danoff has no
right to recover for business income losses (if any) suffered by C&K Market.
AFFIRMED.
3

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Argonaut v. Danoff, No. 16-35483
FISHER, Circuit Judge, dissenting:
For a loss payee to recover under an insurance policy in Oregon, the named
insured must (1) have an insurable interest and (2) must have sustained a loss. See
Transp. Equip. Rentals, Inc. v. Or. Auto Ins. Co., 478 P.2d 620, 623 (Or. 1970).
In the majority’s view, Danoff has not presented a triable issue of fact as to
whether he is entitled to payment for: (1) missing fixtures and equipment; (2)
physical damage to the building; and (3) lost business income. Although I agree
Danoff has not raised a genuine issue of material fact with respect to the missing
fixtures and equipment and lost business income, I disagree Danoff failed to do so
with respect to physical damage to the building. On this point, the majority
misapplied Oregon law and misapprehended the factual record.
The majority appears to offer three rationales to support its conclusion that
Danoff failed to present a triable issue as to physical damage to the building. First,
the majority says C&K Market did not make a claim to Argonaut for losses. But
C&K Market was not required to make a claim for Danoff to recover. Under
Oregon law, Danoff needed to show only that C&K Market had an insurable
interest and sustained a loss. See id. The majority points to no authority to support
the further requirement that C&K needed to make a claim for losses. This added
requirement has no basis in Oregon law.
FILED
MAR 23 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Second, the majority says any liability between C&K Market and Danoff
was settled in the bankruptcy action. But whether there is ongoing liability
between C&K Market and Danoff is not relevant to whether Danoff can recover
under the insurance policy as a loss payee. The relevant inquiry is whether C&K
Market had an insurable interest and sustained a loss, see id., not whether C&K
Market itself remained liable to Danoff. The majority again points to no authority
under Oregon law to support the added requirement that C&K Market must remain
liable to Danoff for him to recover as a loss payee.
Third, the majority says Danoff has not proven C&K Market suffered a loss
with respect to the physical damage to the building. At the summary judgment
stage, however, Danoff was not required to prove C&K Market suffered such a
loss. Danoff needed only to raise a genuine issue of material fact, drawing all
inferences in his favor. He easily did so. Although Argonaut argued any physical
damage to the building was normal wear and tear, the only evidence it submitted
was testimony in which several of C&K Market’s own employees stated in
conclusory and cursory fashion that the damage to the building was not beyond
normal wear and tear. Danoff rebutted this testimony in his own affidavit, in
which he stated the building sustained direct physical loss and damage “to, among
other property, wires and lights, a sliding-glass door, plumbing components, and
the ceiling and floor.” Danoff further stated he observed damage upon visiting the

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building: “[i]n addition to physical damages caused by demolishing and tearing off
parts of the building, including demolished walls that had been built into the store
for [a] walk-in freezer, there are numerous holes [in] the walls, scrapes in the
flooring, and instances of plumbing and wiring damaged when the fixtures that had
been permanently affixed to the building were torn off and removed.” Danoff also
provided photographs corroborating much of the alleged damage. Although it is
unclear what several of the photographs depict, others clearly show missing and
damaged walls, missing and damaged ceiling tiles, and missing and damaged
flooring – all of which are damages Danoff described in his affidavit.
Given Oregon law and the evidence in the record, I cannot join in the
majority’s conclusion that Danoff did not present a triable issue of fact with respect
to physical damage to the building. Therefore, I respectfully dissent.

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