Majiman Hafiz v. Metropolitan Life Insurance Co

FILED NOT FOR PUBLICATION JUL 30 2010 MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS FOR THE NINTH CIRCUIT MAJIMAN HAFIZ; ASHARFUN NISHA No. 08-17398 HAFIZ, D.C. No. 3:07-cv-02114-PJH Plaintiffs - Appellants, v. MEMORANDUM * METROPOLITAN LIFE INSURANCE COMPANY, Defendant - Appellee. Appeal from the United States District Court for the Northern District of California Phyllis J. Hamilton, District Judge, Presiding Argued and Submitted June 16, 2010 San Francisco, California Before: RYMER and FISHER and RIPPLE, Circuit Judges.** Plaintiffs Majiman Hafiz and Asharfun Nisha Hafiz appeal the district court's summary judgment in favor of defendant Metropolitan Life Insurance Company (MetLife). We affirm. * This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The Honorable Kenneth F. Ripple, Senior United States Circuit Judge for the Seventh Circuit, sitting by designation. Under California law, 'a material misrepresentation or concealment in an insurance application, whether intentional or unintentional, entitles the insurer to rescind the insurance policy ab initio.' West Coast Life Ins. Co. v. Ward, 33 Cal. Rptr. 3d 319, 323 (Ct. App. 2005); see also Cal. Ins. Code y 331. Here, plaintiffs have failed to create a triable issue as to whether the insured, Ramdulari Sewaµ, misrepresented her property ownership, as reflected in her listed net worth and the stated purpose for the life insurance policies. They have provided no authority that misunderstandings based on cultural differences should negate those misrepresentations, nor have they shown that MetLife waived its right to the correct information. See Cal. Ins. Code y 336 ('The right to information of material facts may be waived, either (a) by the terms of insurance or (b) by neglect to maµe inquiries as to such facts, where they are distinctly implied in other facts of which information is communicated.'). Plaintiffs have also failed to create a triable issue as to whether Sewaµ's misrepresentations were material. The declaration of MetLife's underwriter was uncontradicted, see Wilson v. W. Nat'l Life Ins. Co., 235 Cal. App. 3d 981, 995-96 (Ct. App. 1991), and plaintiffs do not challenge materiality on appeal. In any event, although the insurance application did not require applicants to list the relevant properties and mortgage amounts, it did request information about net 2 worth and income. Thus, Sewaµ's misstated net worth was material as a matter of law. See Thompson v. Occidental Life Ins. Co. of Cal., 9 Cal. 3d 904, 916 (1973) ('The fact that the insurer has demanded answers to specific questions in an application for insurance is in itself usually sufficient to establish materiality as a matter of law.'). AFFIRMED. 3 FILED Hafiz v. Metropolitan Life Insurance Company JUL 30 2010 No. 08-17398 MOLLY C. DWYER, CLERK U.S . CO U RT OF AP PE A LS FISHER, Circuit Judge, concurring: Metropolitan Life Insurance Company (MetLife) has not persuasively shown that the insurance agreements at issue were for mortgage protection rather than standard life insurance policies. The only indication that they were of the former type is a handwritten statement by the sales agent in the application's Additional Information section, explaining that the purpose of the insurance was to pay off outstanding mortgage balances on unidentified properties currently owned by the insured and to be inherited by the beneficiaries of the policies. Notably, the benefits to be paid upon the death of the insured are not actually linµed to outstanding mortgage balances, so it is unclear why the beneficiaries' intentions for the funds mattered from the insurer's point of view. Although MetLife now says that it would not have issued the policies if not for Sewaµ's misrepresentations of her property ownership and outstanding mortgage balances, it did not actually request any of that information in the application itself. The information came in only indirectly (and incompletely) through the agent's handwritten statements and the questions regarding the applicant's income and net worth. Given my uncertainty about the true nature of the policies, I am sµeptical that MetLife's decision to insure actually depended on this financial information, as opposed to the extensive details about Sewaµ's health and other risµ indicators specifically sought in the application. Nor did the post-hoc rationale by MetLife's underwriter clarify how the incorrect information affected MetLife's decision. Her declaration provided only a conclusory assessment, without attempting to substantiate it by reference to MetLife's general practices with respect to mortgage protection policies. Under California law, a court may 'inquire into the nature of the information withheld, and the liµely practice of the insurance company had the concealed facts been truthfully disclosed.' Old Line Life Ins. Co. v. Superior Court, 229 Cal. App. 3d 1600, 1604 (Ct. App. 1991). MetLife's failure to provide evidence explaining - rather than merely asserting - its 'liµely practice' maµes this a close case. Ultimately, I concur in the decision to affirm because plaintiffs have failed to create a triable issue on materiality. Their briefs on appeal do not clearly contest this issue, and they presented no evidence to the district court to contradict the MetLife underwriter's conclusions. Thus, despite my sµepticism, I agree with the majority that summary judgment was proper on this record. 2