Howard Tenzer v. Minnesota Life Ins. Co. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 21 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HOWARD TENZER, Legal Guardian on No. 19-17011
behalf of A.T.,
D.C. No.
Plaintiff-Appellant, 2:18-cv-00446-JAD-NJK
v.
MEMORANDUM*
MINNESOTA LIFE INSURANCE
COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding
Submitted October 16, 2020**
San Francisco, California
Before: McKEOWN and NGUYEN, Circuit Judges, and VITALIANO,*** District
Judge.
*
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).
***
The Honorable Eric N. Vitaliano, United States District Judge for the
Eastern District of New York, sitting by designation.
Howard Tenzer (Howard) appeals the district court’s grant of summary
judgment in favor of Minnesota Life Insurance (Minnesota Life). We have
jurisdiction under 28 U.S.C. § 1291, and we review the district court’s decision de
novo. Westport Ins. Corp. v. Cal. Cas. Mgmt. Co., 916 F.3d 769, 773 (9th Cir.
2019). We affirm.
All of Howard’s claims stem from the rescission by Minnesota Life of an
insurance contract with Howard’s brother, Mark Tenzer (Mark). As relevant here,
rescission of a life insurance contract under Nevada law, which is controlling, is
lawful when a putative insured made material misrepresentations to the insurer, or
when an insurer would not have issued the policy, or would have issued the policy
on different terms, had the putative insured provided accurate information. Nev.
Rev. Stat. § 687B.110. The materiality of misrepresentations is typically a
question of fact for the jury, and “only where reasonable minds cannot differ may
the issue be resolved as a matter of law.” Powers v. United Servs. Auto. Ass’n, 979
P.2d 1286, 1289 (Nev. 1999).
It is undisputed that Mark made numerous health-related misrepresentations
on his life insurance policy application, including the failure to disclose, as
required by the application, his history of exogenous steroid use, sleep apnea,
abdominal issues, doctors’ visits, surgery and diagnostic tests. Minnesota Life’s
underwriter, John Helberg, testified in a sworn affidavit and at his deposition that
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Mark’s misstatements were material to the risk to be assumed by Minnesota Life
and that, given accurate health information, Minnesota Life would have rejected
Mark’s application. Howard did not offer evidence to rebut Helberg’s sworn
testimony, relying instead on the bald assertion that the issue must be reserved for
jury determination. In this posture, however, and viewing the evidence in the light
most favorable to Howard, rescission was proper as a matter of law because
reasonable minds could not differ on whether Mark’s misrepresentations were
material or on whether Minnesota Life would have issued the same policy given
accurate information.
Further, the district court properly held that Minnesota Life did not waive its
right to rescind Mark’s policy. Under Nevada law, an insurer waives its right to
rescission if, before issuing a policy, the insurer already has “full information”
about the misrepresentations it later relies upon to justify rescinding that policy.
Violin v. Fireman’s Fund Ins. Co., 406 P.2d 287, 290 (Nev. 1965). Though there
is no dispute that Minnesota Life received Mark’s blood test results showing
elevated liver-enzyme levels before issuing his policy, there is also no dispute that
these results alone, because they could reflect various causes, did not warrant,
according to the uncontroverted testimony of Helberg, the rejection of Mark’s
application. Moreover, the insurer was entitled to rely on Mark’s representations.
As the district court noted, Howard provides no authority for the proposition that
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Nevada law imposes an affirmative obligation to investigate further. In the
absence of complete and truthful information, Minnesota Life did not waive its
right to rescind Mark’s insurance policy.
Because Minnesota Life was entitled to rescind Mark’s life insurance
policy, it cannot be held liable for breaching that policy. See Bergstrom v. Estate
of DeVoe, 854 P.2d 860, 862 (Nev. 1993) (per curiam). Furthermore, Howard’s
bad faith claim is also defeated. When an insurer is legally entitled to rescind a
policy, there can be no finding of bad faith. See Pemberton v. Farmers Ins. Exch.,
858 P.2d 380, 382 (Nev. 1993) (per curiam).
Finally, the district court correctly granted summary judgment on the
claimed violations of Nevada’s Unfair Claims Practices Act, which are
unsupported by any evidence and are wholly meritless.
AFFIRMED.
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