Maria Neumayer v. Allstate Ins. Co.

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 10, 2019
• Docket: 17-56469
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 10 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MARIA NEUMAYER, No. 17-56469

Plaintiff-Appellant, D.C. No. 2:16-cv-03508-AB-AS v.

ALLSTATE INSURANCE COMPANY; MEMORANDUM* DOES, 1 through 100, Inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Andre Birotte, Jr., District Judge, Presiding

Submitted March 6, 2019** Pasadena, California

Before: WARDLAW and BENNETT, Circuit Judges, and SESSIONS,*** 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 William K. Sessions III, United States District Judge for the District of Vermont, sitting by designation. Maria Neumayer appeals the district court’s dismissal of her breach of

contract claim, as well as the grant of summary judgment to Allstate Indemnity

Company (“Allstate”) on her breach of implied covenant of good faith and fair

dealing claim. We have jurisdiction under 28 U.S.C. § 1291, and we affirm the

decisions of the district court.

This case arises out of an automobile accident between Maria Neumayer and

an uninsured driver. At the time of the accident, Neumayer was insured by

Allstate. Neumayer and Allstate disagreed about the amount of benefits she was

due under the uninsured motorist clause of her insurance policy, and Neumayer

demanded arbitration. The day before the arbitration hearing, Neumayer’s counsel

contacted the organization facilitating the arbitration and informed them that

Neumayer would not attend the next day because she could not afford the

arbitration fees. A representative from the organization instructed Neumayer’s

counsel to either discuss this issue at the hearing the next day or agree to pay a late

cancellation fee. Neumayer’s counsel did not respond to this communication and

did not show up to the arbitration hearing the next day.

Following the arbitration, the arbitrator entered an award in favor of Allstate.

Neumayer filed this action alleging that Allstate had breached their contract and

breached the implied covenant of good faith and fair dealing. The district court

2 17-56469 dismissed Neumayer’s breach of contract claim and granted summary judgment to

Allstate on Neumayer’s breach of implied covenant claim.

The district court correctly dismissed Neumayer’s breach of contract claim

for failure to state a claim. Neumayer alleged that Allstate breached the insurance

policy by setting up and participating in a “sham” arbitration, thus denying

Neumayer the opportunity to present her case and win the benefits owed to her

under the policy. However, the validity of the arbitration process and award can be

challenged only by a petition to vacate or correct the award, which Neumayer did

not file. See Cal. Code Civ. Proc. §§ 1285, 1286.4(a), Rios v. Allstate Ins. Co., 68

Cal. App. 3d 811 (1977). Absent a petition to vacate or correct the award, an

arbitration award is “binding in . . . any proceeding between the insurer and the

insured.” Goulart v. Crum & Forster Pers. Ins. Co., 222 Cal. App. 3d 527, 529

(1990).

Neumayer also argues that the district court abused its discretion in denying

Neumayer leave to amend the complaint. We disagree. As the district court

explained, no matter how many facts Neumayer added, amendment would have

been futile because the validity of the arbitration award is not at issue or justiciable

in this action. See Chappel v. Lab. Corp. of America, 232 F.3d 719, 725–26 (9th

Cir. 2000) (“A district court acts within its discretion to deny leave to amend when

amendment would be futile. . . .”).

3 17-56469 The district court also correctly granted Allstate summary judgment on

Neumayer’s claim of breach of the implied covenant of good faith and fair dealing.

First, the district court properly found that Allstate’s material facts were

undisputed because Neumayer did not submit a Statement of Genuine Disputes as

required by Local Rule 56-2 of the Local Rules for the Central District of

California. See Miranda v. S. Pac. Transp. Co., 710 F.2d 516, 521 (9th Cir. 1983)

(“District courts have broad discretion in interpreting and applying their local

rules.”). The declarations submitted by Neumayer consisted largely of

impermissible conclusory statements and legal conclusions. See 10B Charles Alan

Wright, et al., Federal Practice and Procedure, § 2738 (4th Ed. 2018) (“[U]ltimate

or conclusory facts and conclusions of law . . . cannot be utilized on a summary

judgment motion.”).

Second, because of the arbitration award in favor of Allstate, the district

court properly found that Allstate did not owe Neumayer any contractual benefits.

Because Neumayer was not due any benefits under the insurance policy, it is

impossible to find that Allstate was withholding benefits. Under California law,

“where no benefits are withheld or delayed, there is no cause of action for the

breach of the covenant of good faith and fair dealing.” Progressive West Ins. Co. v.

Superior Court, 135 Cal. App. 4th 263, 278 (2005).

AFFIRMED.

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