FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LORRAINE BATES; CHARLES No. 14-35397
EHRMAN BATES; EILEEN
BURKE; JACI EVANS, as D.C. No.
Successor Personal 3:13-cv-00580-PK
Representative for the Estate
of Thomas Marier; and
DALLA FRANCIS, as Personal ORDER CERTIFYING
Representative for the Estate A QUESTION TO THE
of George Alexander, OREGON SUPREME
Plaintiffs-Appellants, COURT
v.
BANKERS LIFE AND
CASUALTY COMPANY, an
Illinois insurance company;
CNO FINANCIAL GROUP,
INC., a Delaware corporation,
Defendants-Appellees.
Filed February 24, 2017
Before: Richard R. Clifton, Mary H. Murguia,
and Jacqueline H. Nguyen, Circuit Judges.
2 BATES V. BANKERS LIFE & CAS. CO.
SUMMARY *
Certification to Oregon Supreme Court
The panel certified the following question of state law
to the Oregon Supreme Court:
Does a plaintiff state a claim under Oregon
Revised Statutes § 124.110(1)(b) for
wrongful withholding of money or property
where it is alleged that an insurance company
has in bad faith delayed the processing of
claims and refused to pay benefits owed
under an insurance contract?
COUNSEL
Rachele R. Selvig (argued) and Christopher L. Cauble,
Cauble & Cauble LLP, Grants Pass, Oregon; Michael L.
Williams and Leslie W. O’Leary, Williams O’Leary LLC,
Portland, Oregon; for Plaintiffs-Appellants.
Adam J. Kaiser (argued), Jeffrey J. Amato, and Matthew A.
Stark, Winston & Strawn LLP, New York, New York; Ilan
Wurman, Winston & Strawn LLP, Washington, D.C.; Vicki
L. Smith, Lane Powell PC, Portland, Oregon; for
Defendants-Appellants.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
BATES V. BANKERS LIFE & CAS. CO. 3
ORDER
Pursuant to Oregon Revised Statutes § 28.200, we
certify to the Oregon Supreme Court the following question:
Does a plaintiff state a claim under Oregon
Revised Statutes § 124.110(1)(b) for
wrongful withholding of money or property
where it is alleged that an insurance company
has in bad faith delayed the processing of
claims and refused to pay benefits owed
under an insurance contract?
The answer to this question will determine the outcome of
this appeal. We find no controlling precedent in the
decisions of the Oregon Supreme Court or intermediate
appellate courts. We will adhere to the answer provided by
the Oregon Supreme Court. We do not presume to bind the
Oregon Supreme Court to our framing of this question of
state law, and we recognize that the Oregon Supreme Court
may, in its discretion, answer this question in any form that
it chooses. If the Oregon Supreme Court declines
certification, we will resolve the question according to our
best understanding of Oregon law.
I.
Plaintiffs are elderly Oregonians or their successors who
purchased long-term healthcare insurance policies sold by
Bankers Life and Casualty Company and its parent
company, CNO Financial Group, Inc. (“Bankers”). These
policies are designed to provide health services for elderly
people who can no longer care for themselves and are
intended to cover expenses for in-home care providers,
assisted living facilities, and nursing homes.
4 BATES V. BANKERS LIFE & CAS. CO.
Plaintiffs allege that Bankers developed onerous
procedures to delay and deny insurance claims. Examples
of these procedures include failing to answer phone calls,
losing documents, delaying or denying claims without
notifying policyholders, denying claims for reasons that did
not comport with Oregon law, and paying policyholders less
than what they were owed under their policies. Bankers
allegedly collected premium payments and, without good
cause, delayed and denied insurance benefits to which
Plaintiffs were entitled under their policies.
Plaintiffs brought suit in the District Court of Oregon,
seeking damages and equitable relief. They asserted claims
for breach of contract, intentional misconduct, fraud, and
violations of Oregon’s financial abuse statute. Pursuant to
Federal Rule of Civil Procedure 12(b)(6), the district court
dismissed, inter alia, Plaintiffs’ financial abuse claim on the
ground that Oregon’s financial abuse statute applies only in
the “bailment or trust scenarios expressly referenced in the
statutory language.” Bates v. Bankers Life & Cas. Co., 993
F. Supp. 2d 1318, 1345 (D. Or. 2014).
On appeal, Plaintiffs challenge the dismissal of their
claim under Oregon’s financial abuse statute. We now
certify to the Oregon Supreme Court the question regarding
the scope of Oregon’s financial abuse statute and ask the
Court to exercise its discretion to accept and answer this
question.
II.
Oregon Revised Statutes §§ 124.100 through 124.140
establish a framework for bringing a civil action for abuse of
a vulnerable person. The financial abuse statute states in
relevant part:
BATES V. BANKERS LIFE & CAS. CO. 5
(1) An action may be brought . . . for
financial abuse in the following
circumstances:
....
(b) When a vulnerable person requests
that another person transfer to the
vulnerable person any money or property
that the other person holds or controls and
that belongs to or is held in express trust,
constructive trust or resulting trust for the
vulnerable person, and the other person,
without good cause, either continues to
hold the money or property or fails to take
reasonable steps to make the money or
property readily available to the
vulnerable person when:
(A) The ownership or control of the
money or property was acquired in
whole or in part by the other person or
someone acting in concert with the
other person from the vulnerable
person; and
(B) The other person acts in bad faith,
or knew or should have known of the
right of the vulnerable person to have
the money or property transferred as
requested or otherwise made
available to the vulnerable person.
6 BATES V. BANKERS LIFE & CAS. CO.
Or. Rev. Stat. § 124.110. Plaintiffs contend that this statute
allows them to recover the insurance benefits to which they
are contractually entitled. 1
Plaintiffs argue that the statute is broad enough to
encompass claims against insurance companies for benefits
due under their insurance policies. A claim is actionable,
they assert, when a person “continues to hold” or “fails to
take reasonable steps” to make available the vulnerable
person’s money or property. Id. at § 124.110(1)(b).
Plaintiffs also contend that the statute imposes liability as
long as the defendant “acts in bad faith, or knew or should
have known of the right of the vulnerable person to have the
money or property transferred as requested.” Id. at
§ 124.110(1)(b)(B). In addition to the text of the statute,
Plaintiffs rely on a statutory list of exempted institutions that
does not include insurance companies, Or. Rev. Stat.
§ 124.115, the 1999 expansion of the financial abuse statute,
1999 Or. Laws, ch. 305, and federal district court decisions
construing California’s financial abuse statute, see Rosove v.
Cont’l Cas. Co., No. 14-CV-01118, 2014 WL 2766161, at
*5 (C.D. Cal. June 2, 2014); Johnston v. Allstate Ins. Co.,
No. 13-CV-574, 2013 WL 2285361, at *4 (S.D. Cal. May
23, 2013).
Bankers on the other hand argues that the scope of
Oregon’s financial abuse statute, by its plain language, does
1
Although Plaintiffs had alleged that Bankers induced them to enter
into their long-term healthcare policies, Plaintiffs have abandoned that
theory and expressly do not pursue a fraudulent inducement or wrongful
taking of premiums claim under subsection (1)(a) of Oregon Revised
Statutes 124.110. Plaintiffs press only a wrongful withholding of money
or property claim under subsection (1)(b) on the basis of Bankers’ bad
faith denial and delay of insurance claims.
BATES V. BANKERS LIFE & CAS. CO. 7
not include claims against insurance companies for benefits.
Bankers focuses on the language, “acquired in whole or in
part . . . from the vulnerable person,” to argue that the statute
does not cover typical sales or services transactions. Or.
Rev. Stat. § 124.110; see also Hoffart v. Wiggins, 204 P.3d
173, 175 (Or. Ct. App. 2009). Bankers reasons that the
vulnerable person is limited to a return of the same money
or property that the insurer acquired from that vulnerable
person, as in a bailment or trust scenario. In addition to the
text of the statute, Bankers relies on the elements of a claim
for financial abuse set forth in Hoffart v. Wiggins, 204 P.3d
at 175.
Without guidance from the Oregon Supreme Court or
any Oregon appellate court, we are not confident of the
correct interpretation of Oregon’s financial abuse statute.
While the statute’s legislative history suggests that the
statute may be applied to contractual relationships, it does
not shed light on whether the statute’s breadth encompasses
the wrongful withholding of insurance benefits owed under
a policy. See Wyers v. Am. Med. Response Nw., Inc.,
377 P.3d 570, 580 (Or. 2016); Abuse of the Elderly and
Incapacitated: Hearing on S.B. 6 Before the H. Comm. on
Judiciary, 1999 Leg., 70th Sess., Tape 166, Side A (Or.
1999) (statement of Rep. Lane Shetterly). Because the
resolution of this case turns solely on Oregon law, we can
only predict how the Oregon Supreme Court would rule. See
Patton v. Target Corp., 580 F.3d 942, 948 (9th Cir. 2009).
Therefore, we certify this question of law to the Oregon
Supreme Court so that we, as well as the Oregon bar, might
benefit from an authoritative decision on this issue. See id.
8 BATES V. BANKERS LIFE & CAS. CO.
III.
In an opinion published concurrently with this order, we
resolved a separate question of whether our court has
jurisdiction to review the district court’s decision to strike
the class allegations. All other further proceedings in this
case are stayed pending receipt of the answer to the certified
question or notification by the Oregon Supreme Court that it
declines to answer the certified question. The parties shall
notify this court within ten days after the Oregon Supreme
Court accepts or rejects certification. In the event that the
Oregon Supreme Court accepts certification, the parties shall
file a joint status report with this court six months after the
date of acceptance and every six months thereafter, or within
ten days of the Oregon Supreme Court’s decision, whichever
is earlier.
The Clerk shall file a certified copy of this order with the
Oregon Supreme Court under Oregon Revised Statutes
§ 28.215. The Clerk shall also provide a copy of the record
in this case, in whole or in part, to the Oregon Supreme Court
upon request.
IT IS SO ORDERED.