Transamerica Life Insurance Co v. Angelina Slee ( 2022 )

FILED
NOT FOR PUBLICATION
MAY 10 2022
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRANSAMERICA LIFE INSURANCE No. 21-35093
COMPANY,
D.C. No. 2:19-cv-01536-JLR
Plaintiff-Appellee,
v. MEMORANDUM*
ANGELINA D. SLEE; et al.,
Defendants-Appellants.
Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Submitted February 9, 2022**
Seattle, Washington
Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.
The district court granted summary judgment in favor of Transamerica Life
Insurance Company. The district court adopted the Magistrate Judge’s report and
recommendation, which determined that “the policy language unambiguously
*
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).
requires the insured to be in a nursing home licensed by the state in order to be
entitled to benefits, that [the Slees] failed to prove their [assisted living facilities
(ALFs)] met this requirement, and that Transamerica reasonably exercised its
discretion in determining the ALFs did not ‘substantially comply’ with the policy
definition of ‘nursing home.’” From this determination, the Magistrate Judge
determined that the Slees’s Counterclaims failed as a matter of law. We affirm the
district court’s judgment.
The Slees’s long-term care insurance policies provide that an insured can
qualify for benefits in one of three ways: where treatment is (1) “Medically
Necessary;” (2) required due to a “Cognitive Impairment;” or (3) required
“because of [the insured’s] inability to perform at least 2 of the 6 Activities of
Daily Living.” Once an insured has qualified for benefits, the Policy includes a
“Nursing Home Benefit,” which pays “the actual charges for confinement in a
Nursing Home, up to the Maximum Daily Nursing Home Benefit shown in the
Schedule for each day of a Nursing Home stay.” To “qualify for the Nursing
Home Benefit,” three conditions must be met: “(1) [The insured’s] Physician must
certify that [the insured’s] treatment is Medically Appropriate; and (2) the care or
services must be provided in a Nursing Home; and (3) the charges must be incurred
while th[e] Policy is in force.”
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Under Washington contract law, if the “terms are defined in a policy, then
the term must be interpreted in accordance with that policy definition,” unless the
policy violates public policy or a statute. Kitsap v. Allstate Ins. Co., 136 Wash. 2d
567, 576 (Wash. 1998) (en banc); see Findlay v. United Pacific Ins. Co., 129
Wash. 2d 368, 379 (Wash. 1996) (en banc) (“We have repeatedly held that an
insurer, as a private contractor, is ordinarily permitted to limit its liability unless to
do so would be inconsistent with public policy. When such public policy exists, it
will ordinarily be found in a regulatory statute.”).
The Slees contend that the policy’s definition of nursing home violates
Washington law, and that Transamerica must adopt the broader definition of
nursing home found in the Washington code. Under their reading, that broader
definition would include the ALFs to which the Slees were admitted. And from
that definition, the rest of the Slees’s arguments flow, i.e., that Transamerica
improperly denied coverage.
Nothing in the contract is inconsistent with Washington law. The policies
expressly define a “nursing home,” among other requirements, as “[a] facility, or
that part of a facility which: is licensed by the state as a nursing home.” The code
distinguishes between nursing homes and ALFs. See Wash. Rev. Code § 18.51 et
seq. (regulating nursing homes); Wash. Rev. Code § 18.20 et seq. (regulating
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assisted living facilities). Under the Washington code, ALFs are not permitted to
act as nursing homes. See Wash. Rev. Code § 18.20.160 (“No person operating
a[] [licensed ALF] . . . shall admit to or retain in the [ALF] any aged person
requiring nursing or medical care of a type provided by institutions licensed under
chapter[ ] 18.51 [Nursing Homes.]”). Thus, the core of the Slees’s argument—that
the policy’s definition of “nursing home” is contrary to Washington law—is
incorrect.
Because we agree that the district court correctly interpreted the statutes and
the insurance policy, we agree that the Slees’s counterclaims fail as a matter of
law.
The district court’s judgment is affirmed.
AFFIRMED
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