David Clark v. Indemnity Ins. Co. of No. Am. ( 2018 )


Menu:
  •                                                                             FILED
    NOT FOR PUBLICATION
    MAR 05 2018
    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    DAVID CLARK,                                     No.   16-16880
    Plaintiff-Appellant,               D.C. No. 2:14-cv-02211-SPL
    v.
    MEMORANDUM*
    INDEMNITY INSURANCE COMPANY
    OF NORTH AMERICA and
    GALLAGHER BASSETT SERVICES,
    INC.,
    Defendants-Appellees.
    Appeal from the United States District Court
    for the District of Arizona
    Steven Paul Logan, District Judge, Presiding
    Argued and Submitted February 5, 2018
    San Francisco, California
    Before: D.W. NELSON, TASHIMA, and CHRISTEN, Circuit Judges.
    David Clark appeals from the district court’s grant of summary judgment to
    defendants Indemnity Insurance of North America and Gallagher Bassett Services,
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by Ninth Circuit Rule 36-3.
    Inc.1 We have jurisdiction under 
    28 U.S.C. § 1291
    . We affirm in part, reverse in
    part, and remand for further proceedings.
    1. Clark argues that Indemnity acted in bad faith by denying his January
    claim without reviewing his medical records, as opposed to a summary of them.
    “[A]n incomplete pre-denial investigation of an insured’s claim can expose the
    insurance company to liability for bad faith,” but the inadequacy of the
    investigation has to be material. Aetna Cas. & Sur. Co. v. Superior Court, 
    778 P.2d 1333
    , 1336 (Ariz. Ct. App. 1989). Clark does not explain how examination
    of his medical records, rather than a summary of them, might have revealed facts
    supporting coverage for his neck injury under the January claim. We therefore
    affirm the district court’s dismissal of this part of Clark’s claim.
    Moreover, Indemnity had ample reason to reject the January claim. Clark
    raised his injury more than a month after it was allegedly sustained and informed
    the hospital where the fusion surgery was performed that his injury was not
    suffered in the course of his employment. Besides casting doubt on whether the
    cervical injury was compensable as work-related, Clark’s decision to use his own
    group health insurance policy deprived Tressler of easy access to his medical
    records. The Employer’s Report of Industrial Injury which stated that Clark
    1
    As the parties are familiar with the facts, we do not recount them here.
    2
    sustained a “blown disk in unknown area of back due to unknown cause” did not
    clarify matters. On the basis of what was known at that time, and with a statutory
    deadline looming, Indemnity’s denial of Clark’s January claim could not have been
    unreasonable. See Deese v. State Farm Mut. Auto. Ins. Co., 
    838 P.2d 1265
    , 1268
    (Ariz. 1992). We therefore find no error in the district court’s dismissal of this part
    of Clark’s claim.
    2. Although it is a close call, we are persuaded that a rational jury could
    return a verdict for Clark based on Indemnity’s conduct after learning of the nexus
    between the neck injury and his November claim. While an insurer is not required
    to advise the insured of every fact or provision that may be applicable to him to
    her, “the duty of good faith encompasses some obligation to inform the insured
    about the extent of coverage and his or her rights under the policy and to do so in a
    way that is not misleading.” Nardelli v. Metro. Grp. Prop. & Cas. Ins. Co., 
    277 P.3d 789
    , 800 (Ariz. Ct. App. 2012) (citations omitted). Clark asserts that he
    sought to “consolidate [his claim] in order to obtain coverage” and there is
    evidence he did. For example, Tressler noted on July 24, 2013, that Clark “[wa]s
    now alleging that he had cervical pain/injury after his 11/21 thumb injury.” As of
    that date, Tressler knew that the Independent Medical Examination had associated
    the neck injury and the November industrial accident, and that Clark had requested
    3
    consolidation of his insurance claims. Thus, even if Tressler was not at liberty to
    “speculate” on how Clark wished his claim for benefits to be handled, jurors could
    decide that she could and should have inquired. She did not, and this omission
    precludes summary judgment.
    Indemnity suggests that coverage under the November accident claim could
    have been properly rejected because “Indemnity’s investigation . . . revealed that
    Clark had prior cervical claims, despite Clark’s original representation that he had
    never injured his cervical spine before this claim.” The documents cited in its
    appellate brief, however, do not show when Tressler became aware of Clark’s prior
    medical history. We thus reverse the grant of summary judgment in favor of
    Indemnity on this part of Clark’s claim.
    3. Clark also contends that Indemnity’s delay in paying benefits after they
    were awarded by the Industrial Commission of Arizona amounted to bad faith.
    This delay, however, is at least equally attributable to Clark’s attorney who
    provided the debt collector with the claim number for the January accident
    claim—which had been denied as moot—rather than the claim number for the
    November accident claim under which benefits were to be paid. Indemnity moved
    quickly to settle the debt collection action brought against Clark once it became
    aware of the lawsuit.
    4
    4. Finally, Clark’s appellate brief does not “specifically and distinctly” raise
    any objection to the district court’s grant of summary judgment to Gallagher.
    United States v. Kama, 
    394 F.3d 1236
    , 1238 (9th Cir. 2005) (citations omitted).
    Hence, any such argument is waived, and we affirm the grant of summary
    judgment to Gallagher.
    AFFIRMED in part, REVERSED in part, and REMANDED. Each
    party shall bear his or its own costs on appeal.
    5