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United States v. Safeco Insurance
Citation: 65 F. App'x 637Docket: No. 02-15737
Court: Court of Appeals for the Ninth Circuit; May 29, 2003; Federal Appellate Court
The action concerns the interpretation of a surety bond related to the reclamation costs of a mine in Nevada. Safeco Insurance Company of America (Safeco) is appealing a summary judgment favoring the appellees, who sought declaratory relief. The court establishes that Safeco did not waive its appeal rights, as its signature on the proposed judgment only indicated consent to the form, not the substance, reflecting its lack of intent to accept the final judgment. The court dismisses Safeco's argument regarding a lack of Article III jurisdiction, affirming that a real and substantial controversy exists due to Safeco’s cancellation of the bond, which affected Florida Canyon Mining, Inc.'s ability to continue operations. The cancellation created a scenario where Florida Canyon either needed a substitute bond or had to stop mining, presenting a concrete dispute rather than a hypothetical one. The court concludes that the surety bond continues to cover disturbances occurring before its cancellation and that the interpretation of the bond is governed by federal common law, requiring contracts to be read as a whole, prioritizing reasonable interpretations and ordinary meanings of terms. The plain language of a contract should be prioritized in interpretation, and disagreement over its meaning does not imply ambiguity unless reasonable interpretations exist. The bond's wording supports the district court’s interpretation, stating that if Safeco cancels the bond, it remains effective for areas disturbed before cancellation. This clause ensures continued coverage for previously disturbed areas and does not exclude disturbances from subsequent mining after cancellation. Safeco's cancellation limits its liability to reclamation costs for areas disturbed prior to cancellation, while it will not be responsible for costs related to areas mined afterward. Although reclamation costs may rise due to further mining, this does not negate the validity of Safeco's cancellation rights. The decision is affirmed, and the disposition is not for publication or citation in this circuit, per 9th Cir. R. 36-3.