Transamerica Life Insurance Co v. Angelina Slee

FILED
UNITED STATES COURT OF APPEALS
JUN 28 2022
FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

TRANSAMERICA LIFE INSURANCE No. 21-35093
COMPANY,
D.C. No. 2:19-cv-01536-JLR
Plaintiff-Appellee, Western District of Washington,
Seattle
v.

ANGELINA D. SLEE; THOMAS M. ORDER
SLEE; ANTHONY SLEE, as power of
attorney for Angelina D. Slee,

Defendants-Appellants.

Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.

Judges Bea, Bybee, and Christen have voted to deny the Petition for

Rehearing. Judge Christen voted to deny, and Judges Bea and Bybee recommended

denying, the Petition for Rehearing En Banc. The full court has been advised of the

Petition for Rehearing En Banc, and no judge of the court has requested a vote.

Defendant-Appellant's Petition for Rehearing and Rehearing En Banc, filed May

25, 2022, is DENIED.

The memorandum disposition filed May 10, 2022 is amended to note that we

review the grant of summary judgment de novo. The parties may not file another

petition for rehearing or petition for rehearing en banc.
 FILED
NOT FOR PUBLICATION
JUN 28 2022
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

TRANSAMERICA LIFE INSURANCE No. 21-35093
COMPANY,
D.C. No. 2:19-cv-01536-JLR
Plaintiff-Appellee,
AMENDED
v. MEMORANDUM*

ANGELINA D. SLEE; et al.,

Defendants-Appellants.

Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding

Submitted February 9, 2022**
Seattle, Washington

Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.

The district court granted summary judgment in favor of Transamerica Life

Insurance Company. We review a grant of summary judgment de novo. Lopez v.

Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en banc). Viewing the evidence in the

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
light most favorable to the nonmoving party, we must determine whether there are

any genuine issues of material fact. See id.

The district court adopted the Magistrate Judge’s report and

recommendation, which determined that “the policy language unambiguously

requires the insured to be in a nursing home licensed by the state in order to be

entitled to benefits, that [the Slees] failed to prove their [assisted living facilities

(ALFs)] met this requirement, and that Transamerica reasonably exercised its

discretion in determining the ALFs did not ‘substantially comply’ with the policy

definition of ‘nursing home.’” From this determination, the Magistrate Judge

determined that the Slees’s Counterclaims failed as a matter of law. We affirm the

district court’s judgment.

The Slees’s long-term care insurance policies provide that an insured can

qualify for benefits in one of three ways: where treatment is (1) “Medically

Necessary;” (2) required due to a “Cognitive Impairment;” or (3) required

“because of [the insured’s] inability to perform at least 2 of the 6 Activities of

Daily Living.” Once an insured has qualified for benefits, the Policy includes a

“Nursing Home Benefit,” which pays “the actual charges for confinement in a

Nursing Home, up to the Maximum Daily Nursing Home Benefit shown in the

Schedule for each day of a Nursing Home stay.” To “qualify for the Nursing

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Home Benefit,” three conditions must be met: “(1) [The insured’s] Physician must

certify that [the insured’s] treatment is Medically Appropriate; and (2) the care or

services must be provided in a Nursing Home; and (3) the charges must be incurred

while th[e] Policy is in force.”

Under Washington contract law, if the “terms are defined in a policy, then

the term must be interpreted in accordance with that policy definition,” unless the

policy violates public policy or a statute. Kitsap v. Allstate Ins. Co., 136 Wash. 2d

567, 576 (Wash. 1998) (en banc); see Findlay v. United Pacific Ins. Co., 129

Wash. 2d 368, 379 (Wash. 1996) (en banc) (“We have repeatedly held that an

insurer, as a private contractor, is ordinarily permitted to limit its liability unless to

do so would be inconsistent with public policy. When such public policy exists, it

will ordinarily be found in a regulatory statute.”).

The Slees contend that the policy’s definition of nursing home violates

Washington law, and that Transamerica must adopt the broader definition of

nursing home found in the Washington code. Under their reading, that broader

definition would include the ALFs to which the Slees were admitted. And from

that definition, the rest of the Slees’s arguments flow, i.e., that Transamerica

improperly denied coverage.

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 Nothing in the contract is inconsistent with Washington law. The policies

expressly define a “nursing home,” among other requirements, as “[a] facility, or

that part of a facility which: is licensed by the state as a nursing home.” The code

distinguishes between nursing homes and ALFs. See Wash. Rev. Code § 18.51 et

seq. (regulating nursing homes); Wash. Rev. Code § 18.20 et seq. (regulating

assisted living facilities). Under the Washington code, ALFs are not permitted to

act as nursing homes. See Wash. Rev. Code § 18.20.160 (“No person operating

a[] [licensed ALF] . . . shall admit to or retain in the [ALF] any aged person

requiring nursing or medical care of a type provided by institutions licensed under

chapter[ ] 18.51 [Nursing Homes.]”). Thus, the core of the Slees’s argument—that

the policy’s definition of “nursing home” is contrary to Washington law—is

incorrect.

Because we agree that the district court correctly interpreted the statutes and

the insurance policy, we agree that the Slees’s counterclaims fail as a matter of

law.

The district court’s judgment is affirmed.

AFFIRMED

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