U.S. Bank National Ass'n v. PHL Variable Insurance ( 2015 )

FILED
NOT FOR PUBLICATION JUL 02 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
U.S. BANK NATIONAL No. 13-55767
ASSOCIATION, a national association, as
securities intermediary for Lima D.C. No. 2:12-cv-03046-RGK-
Acquisition, LP, MRW
Central District of California,
Plaintiff - Appellant, Los Angeles
v. MEMORANDUM*
PHL VARIABLE INSURANCE
COMPANY, a Connecticut corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the Cental District of California
R. Gary Klausner, United States District Judge, Presiding
Argued and Submitted June 2, 2015
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: THOMAS, Chief Judge, CALLAHAN, Circuit Judge and SINGLETON,**
Senior District Judge.
U.S. Bank National Association (“U.S. Bank”) appeals the district court’s
grant of summary judgment on its claim that PHL Variable Insurance Company
(“PHL”) violated the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn.
Gen. Stat. § 38a–816(6), by engaging in a general practice of unfair claims
processing. U.S. Bank also appeals the post-trial verdict on its California bad faith
claim on the ground that the district court failed to properly instruct the jury.
Because the parties are familiar with the factual and procedural history of this case,
we repeat only those facts necessary to resolve the issues raised on appeal. We
have jurisdiction under 28 U.S.C. § 1291, and we affirm in part, reverse in part, and
remand.
1. We review de novo the district court’s grant of summary judgment.
Lemire v. Cal. Dep’t of Corr. & Rehab., 726 F.3d 1062, 1074 (9th Cir. 2013). “We
must determine ‘whether, viewing the evidence in the light most favorable to the
non-moving party, there are genuine issues of material fact and whether the district
court correctly applied the relevant substantive law.’” Id. (quoting Lopez v. Smith,
203 F.3d 1122, 1131 (9th Cir. 2000) (en banc)). A district court’s response to a
**
The Honorable James K. Singleton, Senior District Judge for the U.S.
District Court for the District of Alaska, sitting by designation.
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question from the jury is typically reviewed for abuse of discretion. United States
v. Ramirez, 537 F.3d 1075, 1081 (9th Cir. 2008). Where an appellant did not
object to the district court’s response to the jury question, however, we review for
plain error. Id.; United States v. Anekwu, 695 F.3d 967, 986 (9th Cir. 2012) (citing
Ramirez, 537 F.3d at 1081).
2. To prevail on a CUTPA claim, a plaintiff must establish that the
defendant engaged in acts of unfair claims settlement “with such frequency as to
indicate a general business practice.” Conn. Gen. Stat. § 38a–816(6). In support
of its contention that PHL unfairly handled claims as a general business practice,
U.S. Bank submitted affidavits from various individuals who described their
difficulties obtaining payment from PHL on other insurance policies as well as the
report of an expert who opined that PHL systematically resisted, denied, or delayed
valid death benefit claims with respect to both the insurance policies at issue in the
instant case and other insurance policies. The district court concluded that U.S.
Bank failed to provide sufficient facts to establish that PHL engaged in unfair
settlement practices as a general business practice because PHL’s conduct in
relation to the other policies had not been finally adjudicated in other legal actions.
Construing the evidence in the light most favorable to the plaintiff, we
conclude that U.S. Bank tendered sufficient evidence to demonstrate a triable issue
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of fact as to whether PHL engaged in acts of unfair claims settlement with such
frequency as to indicate a general business practice under CUTPA. We therefore
reverse the grant of summary judgment and remand for further proceedings on the
CUTPA claim.
3. U.S. Bank additionally argues that the district court made two errors
concerning the bad faith claim litigated at trial. First, U.S. Bank alleges that the
district court erred when it failed to rule as a matter of law when the time limit
commenced under California Code of Regulations, title 10, section 2695.7(b). But
because the district court gave verbatim U.S. Bank’s proposed jury instruction on
the regulation, review of U.S. Bank’s challenge to it is foreclosed. See Deland v.
Old Republic Life Ins. Co., 758 F.2d 1331, 1337 (9th Cir. 1985). U.S. Bank
likewise argues that the district court erred when it failed to give additional
guidance in response to the jurors’ question about the regulation. U.S. Bank did
not object at trial to the district court’s response, and we find no plain error.
Each party shall bear its own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
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