In James B. Lansing Sound, Inc. v. Nat. U. Fire Ins. (9th Cir. 1986) 801 F.2d 1560, the policy gave the insured the election of either paying actual cash value or making the necessary repair or replacement. The district court held "that under this provision, National had an election to pay the 'actual cash value' (fair market value) for the lost property, or it could pay the replacement cost. Further, the court held that replacement cost must mean JBL's replacement cost (cost for JBL to manufacture the equipment), and not National's replacement cost (cost for National to go into the market and purchase like equipment to replace JBL's loss), because if replacement cost were National's replacement cost, National would have no effective election between actual cash value or replacement costs, for both are measured by fair market value." (James. B., supra, 801 F.2d at pp. 1564-1565.) The James B. court reversed. It concluded that the policy was "not without ambiguity. The first sentence of the clause limits National's liability to not more than 'actual cash value' or 'actual cost of . . . replacing the property with property or material of like quality or value.' The policy does not define what is meant by 'actual cash value,' nor does it indicate whose 'actual cost' is to be the measure of replacement cost." (James B., supra, 801 F.2d at p. 1565.) Then the court stated: "We agree that 'actual cash value' means fair market value (usually the list or wholesale price). As the district court recognized, the troubling question is whether 'actual cost' of replacement is to be JBL's actual cost to remanufacture or National's actual cost to go into the market and purchase replacement equipment. Contrary to the district court's suggestion, we are not certain that National's actual cost to enter the market and purchase replacement equipment is necessarily the same as fair market value. An insurance company could well possess sufficient market power to purchase replacement equipment of like quality and value at a cost below the insured's wholesale list price. We find the first sentence of the clause ambiguous with regard to the meaning of replacement cost." (Ibid.) James B. explained that because the policy gave the insurer the option of paying actual cash value or making any replacement itself, there was an implication that the insurer could not force the insured to make the replacement. (James B., at p. 1565.)