Halayne Kasoff v. Bankers Life and Casualty Co. , 662 F. App'x 526 ( 2016 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
OCT 26 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
HALAYNE KASOFF, No. 14-56925
Plaintiff-Appellant, D.C. No.
2:13-cv-08081-GAF-JEM
v.
BANKERS LIFE AND CASUALTY MEMORANDUM*
COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted October 3, 2016
Pasadena, California
Before: D.W. NELSON and PAEZ, Circuit Judges, and BUCKLO,** District
Judge.
Halayne Kasoff (“Kasoff”) appeals the district court’s grant of summary
judgment in favor of Bankers Life and Casualty Company (“Bankers”). We have
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Elaine E. Bucklo, United States District Judge for the
Northern District of Illinois, sitting by designation.
jurisdiction pursuant to 28 U.S.C. § 1291. We review de novo a district court’s
grant of summary judgment, see e.g., Feldman v. Allstate Ins. Co., 322 F.3d 660,
665 (9th Cir. 2003), and we reverse and remand.
This appeal boils down to the meaning of the term “Any One Period of
Expense” in Kasoff’s long-term insurance policy. As stated by the district court,
“does ‘Any One Period of Expense’ require a six month [washout] period only
with respect to injuries that are related to the coverage-triggering injury, as
[Kasoff] asserts, or does it apply to any injury whether or not related to the
coverage-triggering injury, as [Bankers] asserts.” The district court agreed with
Bankers’ interpretation and found the policy provision unambiguous. We conclude
that the policy provision is ambiguous and, as a result, construe it against Bankers.
We apply the substantive law of California. Conestoga Servs. Corp. v. Exec.
Risk Indem., Inc. 312 F.3d 976, 980-81 (9th Cir. 2002). As there are no material
disputed facts, and “[b]ecause [in California] the interpretation of an insurance
policy is a question of law, we must make our own independent determination of
the meaning of the relevant contract language.” Id. at 981.
Insurance policies are subject to the “ordinary rules of contractual
interpretation.” Bank of the West v. Superior Court, 833 P.2d 545, 551-52 (Cal.
1992) (in bank). The purpose of contract interpretation is to “give effect to the
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mutual intention of the parties” by looking at the “writing alone.” Cal. Civ. Code
§§ 1636, 1639; see also United Nat. Ins. Co. v. Spectrum Worldwide, Inc., 555
F.3d 772, 776-77 (9th Cir. 2009). A policy provision is ambiguous if “it is capable
of two or more constructions, both of which are reasonable.” Waller v. Truck Ins.
Exch., Inc., 900 P.2d 619, 627 (Cal. 1995). When an ambiguity exists, the
provision should be “interpreted most strongly against the party who caused the
uncertainty to exist.” Cal. Civ. Code § 1654. Moreover, in the context of
insurance policies, “‘any ambiguous terms are resolved in the insureds’ favor,
consistent with the insureds’ reasonable expectations.’” E.M.M.I. Inc. v. Zurich
Am. Ins. Co., 84 P.3d 385, 389 (Cal. 2004) (quoting Safeco Ins. Co. v. Robert S. 28
P.3d 889, 893 (Cal. 2001)).
The term “Any One Period of Expense” is ambiguous as it has at least two
reasonable constructions. See Waller, 900 P.2d at 627. One reasonable
construction of this provision is that which Bankers offers and with which the
district court agreed: an insured is eligible for a new period of expense only after a
six-month washout period during which she receives no long-term care services
(i.e. home health care, respite care, personal care) related to the benefit-triggering
injury. Under this interpretation, Kasoff would not be covered for the knee injury
at issue in this litigation because she receives long-term care services relating to a
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chronic shoulder injury (for which she has already received the maximum benefits
available under the policy). Another reasonable construction is that which Kasoff
offers: an insured is subject to a six-month washout period only with respect to
injuries that are causally related to the initial benefit-triggering injury. Under
Kasoff’s interpretation, her knee injury should be covered and subject to a separate
period of expense because her shoulder and knee injuries are causally unrelated.
As the term “Any One Period of Expense” is ambiguous, under California
law it must be construed in favor of Kasoff, the insured, consistent with her
reasonable expectations. Safeco, 28 P.3d at 895. In other words, would a
reasonable insured expect her long-term care policy to cover expenses related to an
injury even though she has reached the maximum benefits for a previous injury and
has not yet satisfied the washout period with respect to that previous injury? See
id. The answer is yes. Thus, we conclude that the district court erred in its
interpretation of “Any One Period of Expense.” See Safeco, 28 P.3d at 895.
Having concluded that Bankers was entitled to summary judgment on
Kasoff’s breach of contract claim, the district court summarily dismissed Kasoff’s
claims for breach of the implied covenant of good faith and fair dealing,
conversion, and elder abuse. In light of our disposition, we reinstate those claims.
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For the above reasons, we reverse and remand for further proceedings
consistent with this disposition.
REVERSED and REMANDED for further proceedings.
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