Ariff Gulamani v. Unitrin Auto & Home Insurance ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 21 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARIFF GULAMANI; SHAIROSE No. 20-35312
GULAMANI, husband and wife,
D.C. No. 2:19-cv-01475-TSZ
Plaintiffs-Appellants,
v. MEMORANDUM*
UNITRIN AUTO AND HOME
INSURANCE COMPANY, a Washington
licenses motor vehicle insurer,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Argued and Submitted December 8, 2020
Seattle, Washington
Before: BERZON, MILLER, and BRESS, Circuit Judges.
Ariff and Shairose Gulamani appeal from the district court’s order granting
summary judgment to Unitrin Auto and Home Insurance Company on their claim
that Unitrin wrongly denied underinsured motorist (UIM) benefits for injuries Ariff
Gulamani sustained in a 2013 car accident. The district court held that res judicata
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
barred the Gulamanis’ claim because it could have been raised in a previous
lawsuit in which Ariff Gulamani sought personal injury protection (PIP) benefits
from Unitrin for injuries he sustained in the same car accident. The district court
also held that the Gulamanis were not “legally entitled to recover damages” under
the policy because the statute of limitations had expired on their claim against the
underinsured motorist. See Wash. Rev. Code § 48.22.030(2). Reviewing the
district court’s grant of summary judgment de novo, L.F. v. Lake Wash. Sch. Dist.
#414, 947 F.3d 621, 625 (9th Cir. 2020), we affirm on the ground that res judicata
bars the Gulamanis’ present claims, and so do not consider whether the Gulamanis
were “legally entitled to recover damages.”
Because a Washington court adjudicated the claims in the prior litigation,
Washington law determines the preclusive effect of that court’s judgment.
Manufactured Home Cmtys. Inc. v. City of San Jose, 420 F.3d 1022, 1031 (9th Cir.
2005). “Filing two separate lawsuits based on the same event—claim splitting—is
precluded in Washington.” Ensley v. Pitcher, 222 P.3d 99, 102 (Wash. Ct. App.
2009) (quoting Landry v. Luscher, 976 P.2d 1274, 1276 (Wash. Ct. App. 1999)).
Res judicata bars a party from litigating a matter that “could have been raised, and
in the exercise of reasonable diligence should have been raised, in the prior
proceeding.” Kelly-Hansen v. Kelly-Hansen, 941 P.2d 1108, 1112 (Wash. Ct. App.
1997); see also Norris v. Norris, 622 P.2d 816, 820 (Wash. 1980). To determine
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whether a claim should have been raised in a prior proceeding, Washington courts
look to whether the claim arises from the same “transaction, or series of connected
transactions, out of which the [prior] action arose.” Sound Built Homes, Inc. v.
Windermere Real Estate/S., Inc., 72 P.3d 788, 794 (Wash. Ct. App. 2003) (quoting
Restatement (Second) of Judgments § 24(1) (1982)). Washington courts consider
“whether the present and prior proceedings arise out of the same facts, whether
they involve substantially the same evidence, and whether rights or interests
established in the first proceeding would be destroyed or impaired by completing
the second proceeding.” Kelly-Hansen, 941 P.2d at 1113.
Both Ariff Gulamani’s previous claims against Unitrin regarding PIP
coverage and the Gulamanis’ current claims against Unitrin regarding UIM
coverage stem from the same event—the 2013 car accident. Both claims involve
similar issues and substantially the same documents. Thus, Ariff Gulamani’s
claims in the prior litigation preclude the claims in the current suit. See Chukri v.
Stalfort, 403 P.3d 929, 933 (Wash. Ct. App. 2017).
The Gulamanis argue that res judicata applies only to the issues actually
litigated in the prior case—not the issues that should have been litigated—because
Unitrin initiated that case by filing a declaratory judgment action. They rely on the
Restatement (Second) of Judgments § 33, which states that a declaratory judgment
action is only “conclusive in a subsequent action . . . as to the matters declared, and
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. . . as to any issues actually litigated.” Washington has not yet adopted the
Restatement approach on this issue. See Coates v. City of Tacoma, 457 P.3d 1160,
1176 (Wash. Ct. App. 2019) (Fearing, J., dissenting).
But even if we were to assume that Washington would adopt the
Restatement rule, that rule does not apply to this case. A defendant who brings a
counterclaim becomes “a plaintiff as far as the counterclaim is concerned” for
purposes of res judicata. Restatement (Second) of Judgments § 21 cmt. a. While
Unitrin initially sought narrow declaratory relief to determine whether an insured
could request to have an independent medical examination recorded by counsel,
Ariff Gulamani brought three affirmative counterclaims, for damages, on grounds
that far exceeded the scope of that initial issue. The Gulamanis have identified no
authority suggesting that any State would decline to apply res judicata in these
circumstances. Because Ariff Gulamani’s counterclaims must be granted their full
preclusive effect, res judicata bars the Gulamanis’ current suit.
For the first time at oral argument, the Gulamanis contended that they could
not have brought the UIM claims in the prior litigation because the claims had not
yet accrued, as the Gulamanis had not filed a claim for UIM benefits with Unitrin
and been denied coverage. While the Gulamanis likely could have filed a claim
with Unitrin and generated a rejection through the “exercis[e] [of] reasonable
diligence,” Sanwick v. Puget Sound Title Ins. Co., 423 P.2d 624, 627 (Wash. 1967)
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(quoting Sayward v. Thayer, 36 P. 966, 966 (Wash. 1894)), we need not consider
the question further, because the Gulamanis forfeited this theory by failing to raise
it earlier, Harger v. Department of Labor, 569 F.3d 898, 904 n.9 (9th Cir. 2009);
see also Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (“This court will
not ordinarily consider matters on appeal that are not specifically and distinctly
raised and argued in appellant’s opening brief.”) (quotations omitted).
Because we resolve this case on the basis of res judicata, the Gulamanis’
motion to take judicial notice of documents relevant to other issues (Dkt. No. 36) is
DENIED.
AFFIRMED.
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