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Mike Howisey v. Transamerica Life Ins. Co.

Court: Court of Appeals for the Ninth Circuit
Date filed: 2019-03-21
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                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAR 21 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

MIKE HOWISEY, as attorney in fact for           No.    17-36045
Wallace E. Howisey, an incapacitated
person and WALLACE HOWISEY, an                  D.C. No. 2:17-cv-00009-RSM
incapacitated person,

                Plaintiffs-Appellants,          MEMORANDUM*

 v.

TRANSAMERICA LIFE INSURANCE
COMPANY, a foreign corporation
organized under laws of the State of Iowa,

                Defendant-Appellee.

                   Appeal from the United States District Court
                     for the Western District of Washington
                   Ricardo S. Martinez, Chief Judge, Presiding

                       Argued and Submitted March 4, 2019
                               Seattle, Washington

Before: GOULD and PAEZ, Circuit Judges, and BASHANT,** District Judge.

      Mike Howisey, attorney-in-fact for his father, Wallace E. Howisey


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Cynthia A. Bashant, United States District Judge for
the Southern District of California, sitting by designation.
(“Howisey”), appeals various district court orders in a dispute arising from the long-

term care insurance policy (the “Policy”) Howisey held with Transamerica Life

Insurance Company (“Transamerica”).1 This dispute involves two Policy benefits:

(1) the Nursing Home Benefit, which covers the cost of care in a state-licensed

nursing home and (2) the separate Assisted Living Facility (“ALF”) Benefit, which

covers the cost of care in a licensed ALF.

      Beginning in October 2014, Howisey received care for Alzheimer’s at Aegis

of Kirkland (“Aegis”), a facility licensed by the state of Washington as an assisted

living facility. Howisey submitted a Policy coverage claim for his Aegis stay, which

Transamerica approved for the ALF Benefit. After exhausting his ALF Benefit in

March 2016, Howisey claimed entitlement to the Nursing Home Benefit to cover his

Aegis stay. Transamerica investigated and ultimately denied Howisey’s second

claim because it determined that Aegis was not a state-licensed nursing home, nor

substantially like one under the Policy. Howisey rejected an alternate care plan

Transamerica offered to cover his Aegis stay pursuant to the Policy and filed this

suit instead. In relevant part, Howisey raised claims for breach of contract and

common law and statutory bad faith. He sought damages and declaratory relief.

      Transamerica moved for summary judgment on all of Howisey’s claims and



      1
       We grant the motion by United Policyholders to file an amicus curiae brief
in support of Howisey. Dkt. No. 17-1.

                                          2                                   17-36045
Howisey cross-moved on his coverage claim. The district court granted summary

judgment for Transamerica, denied Howisey’s Rule 56(d) request for additional

discovery, and denied Howisey’s subsequent motion for reconsideration of summary

judgment. Howisey appeals the district court’s summary judgment order and denial

of his Rule 56(d) request.2 We have jurisdiction pursuant to 28 U.S.C. § 1291 and

we affirm.

      We review de novo a district court’s grant of summary judgment.

Campidoglio LLC v. Wells Fargo & Co., 870 F.3d 963, 973 (9th Cir. 2017). We

view the evidence in the light most favorable to the nonmovant and inquire “whether

there are any genuine issues of material fact and whether the district court correctly

applied the relevant substantive law.” Oswalt v. Resolute Indus., Inc., 642 F.3d 856,

859 (9th Cir. 2011) (citation omitted). Washington law applies in this diversity

action. Stanford Ranch v. Md. Cas. Co., 89 F.3d 618, 624 (9th Cir. 1996). We may

affirm the district court’s order “for any reason supported by the record.” Travelers

Prop. Cas. Co. of Am. v. ConocoPhillips Co., 546 F.3d 1142, 1145 (9th Cir. 2008).


      2
         We deem waived Howisey’s appeal of the reconsideration order because
Howisey’s opening brief failed to identify the applicable review standard or argue
why the order fails under that standard. See Lolli v. Cty. of Orange, 351 F.3d 410,
415 (9th Cir. 2003). We will not consider arguments related to the order raised for
the first time in reply. United States v. Alcan Elec. & Eng’g, Inc., 197 F.3d 1014,
1019 (9th Cir. 1999). Howisey’s opening brief does not address the summary
judgment rulings on his negligent retention and hiring and intentional
misrepresentation claims. Those claims are therefore waived, and we do not address
them. Miller v. Fairchild Indus., Inc., 797 F.2d 727, 738 (9th Cir. 1986).

                                          3                                    17-36045
We review a denial of a Rule 56(d) request for abuse of discretion. Tatum v. City &

Cty. of San Francisco, 441 F.3d 1090, 1100 (9th Cir. 2006).

      1.     The district court did not err in granting summary judgment for

Transamerica on Howisey’s coverage claim because the Policy’s Nursing Home

Benefit does not cover Howisey’s Aegis stay. “The court examines the terms of an

insurance contract to determine whether under the plain meaning of the contract

there is coverage.” Kitsap Cty. v. Allstate Ins. Co., 964 P.2d 1173, 1178 (Wash.

1998). “If terms are defined in a policy, then the term should be interpreted in

accordance with that policy definition.” Id. The Policy expressly defines the term

“Nursing Home” to mean a state-licensed nursing home and the Policy’s Nursing

Home Benefit provisions use this defined term. Aegis was undisputedly not a state-

licensed nursing home. Thus, pursuant to the Nursing Home definition’s

unambiguous language, the Nursing Home Benefit does not embrace Howisey’s

Aegis stay.3 The district court properly determined that the Nursing Home Benefit’s


      3
         We reject Howisey’s arguments that certain Washington law principles of
insurance policy interpretation applicable to coverage and exclusion provisions
warrant a different result. In addition to incorporating the Nursing Home definition,
the Policy’s Nursing Home Benefit coverage and exclusion provisions expressly
require care in a state-licensed nursing home. We cannot ignore the plain language
of these provisions to import meanings the provisions preclude. See Quadrant Corp.
v. Am. States Ins. Co., 110 P.3d 733, 737 (Wash. 2005) (holding that strict
application of an insurance exclusion provision “should not trump the plain, clear
language of an exclusion”); State Farm Mut. Auto. Ins. Co. v. Ruiz, 952 P.2d 157,
159 (Wash. 1998) (“[C]ourts must liberally construe inclusionary clauses in


                                         4                                    17-36045
substantial compliance provision is not at issue because Transamerica’s personal

care advisor did not agree that Aegis substantially complies with the Policy’s

Nursing Home definition.

      We reject Howisey’s arguments that Washington’s Long-Term Care

Insurance Act and implementing regulations render invalid the Policy’s state-

licensed nursing home requirement. See Wash. Rev. Code § 48.84 et seq.; Wash.

Admin. Code § 284-54 et seq. Howisey has not shown that the Policy is contrary to

the various provisions of Washington law on which he relies.

      Finally, reading the Policy as a whole shows that the Policy’s separate ALF

Benefit—not the Nursing Home Benefit—covered Howisey’s Aegis stay. See

Overton v. Consol. Ins. Co., 38 P.3d 322, 325 (Wash. 2002) (holding that an

insurance policy “is construed as a whole and each clause is given force and effect”).

The ALF Benefit unambiguously provided coverage for care in a licensed ALF and

thus covered Howisey’s Aegis stay. It is undisputed that Howisey received and

exhausted the Policy benefit to which he was entitled for his Aegis stay.

      2.     The district court did not err in granting summary judgment to

Transamerica on Howisey’s bad faith claims related to Transamerica’s investigation




insurance policies in favor of coverage for those who can reasonably be embraced
within the terms of the clause.” (emphasis added)).


                                          5                                   17-36045
and Nursing Home Benefit denial.4

      For bad faith, a plaintiff must show “duty, breach of that duty, and damages .

. . caused” by the breach and that “the insurer’s breach . . . was unreasonable,

frivolous, or unfounded.” Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash.

2003). “Whether an insurer acted in bad faith is question of fact.” Id. But “an

insurer is entitled to . . . dismissal on summary judgment of a policyholder’s bad

faith claim only if there are no disputed material facts pertaining to the

reasonableness of the insurer’s conduct under the circumstances . . . .” Id. (citation

omitted). Transamerica based its Nursing Home Benefit denial on a reasonable

interpretation of the Policy and thus “there is no action for bad faith.” Overton, 38

P.3d at 329. Howisey failed to show that Transamerica violated any regulation that

would constitute a per se breach of an insurer’s duty of good faith. See Coventry

Assocs. v. Am. States Ins. Co., 961 P.2d 933, 935 (Wash. 1998); see also Wash.

Admin. Code. § 284-30 et seq.

      Howisey also failed to show that a different investigation by Transamerica

would have led to a different Nursing Home Benefit claim determination. See Am.

Best Food, Inc. v. Alea London, Ltd., 158 P.3d 119, 129–30 (Wash. Ct. App. 2007)

(affirming dismissal of a bad faith investigation claim when the party had not shown


      4
        We decline to separately analyze each of the underlying assertions of bad
faith because Howisey has failed to meaningfully differentiate among them.
Therefore, we consider his bad faith claims together.

                                          6                                   17-36045
that further factual investigation would lead to a different outcome given the

insurer’s legal opinions and conclusions), rev’d in part and aff’d in relevant part,

229 P.3d 693, 699 n.4 (Wash. 2008).

         3.   The district court did not abuse its discretion in denying Howisey’s

Rule 56(d) request. Abuse of discretion in denying a Rule 56(d) request turns on

whether the movant has shown how specifically identified additional facts are

essential and will preclude summary judgment. SEC v. Stein, 906 F.3d 823, 833 (9th

Cir. 2018). Howisey failed to identify what specific facts additional discovery would

reveal and how such facts would preclude summary judgment on coverage or bad

faith.

         4.   We deny Howisey’s request for attorney fees. “Attorney fees under

Olympic [S.S. Co. v. Centennial Ins. Co., 811 P.2d 673, 681 (Wash. 1991)] are

available only when the insured prevails.” Hardy v. Pemco Mut. Ins. Co., 61 P.3d

380, 382 (Wash. Ct. App. 2003). Howisey did not prevail and, therefore, he is not

entitled to recover such fees.

         AFFIRMED.




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