Moriarty v. American General Life Insurance

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 4, 2025
• Docket: 23-3650
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 4 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MICHELLE L. MORIARTY, Individually, No. 23-3650 as Successor-In-Interest to Heron D. D.C. No. Moriarty, Decedent, on Behalf of the Estate 3:17-cv-01709-JO-WVG of Heron D. Moriarty, and on Behalf of the Class, MEMORANDUM* Plaintiff - Appellee,

v.

AMERICAN GENERAL LIFE INSURANCE, a Texas Corporation,

Defendant - Appellant,

Appeal from the United States District Court for the Southern District of California Jinsook Ohta, District Judge, Presiding

Submitted February 5, 2025** Pasadena, California

Before: SCHROEDER, MILLER, and DESAI, Circuit Judges.

* 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). American General Life Insurance Company (“American”) appeals the district

court’s grant of summary judgment in favor of Michelle L. Moriarty (“Moriarty”)

on her breach of contract claim under California Insurance Code §§ 10113.71 and

10113.72. In its summary judgment order, the district court held that an insurer’s

violation of the notice requirements under §§ 10113.71 and 10113.72 precludes an

insurance policy from lapsing.

We exercise jurisdiction over this interlocutory appeal under 28 U.S.C.

§ 1292(b) because (1) there is a controlling question of law regarding the theory of

recovery under §§ 10113.71 and 10113.72, (2) there are substantial grounds for a

difference of opinion as to that question, and (3) an immediate resolution of the

question will materially advance the ultimate termination of this litigation. See ICTSI

Or., Inc. v. Int’l Longshore & Warehouse Union, 22 F.4th 1125, 1130–31 (9th Cir.

2022). We vacate and remand with instructions.

This interlocutory appeal presents a narrow issue: whether a life insurance

beneficiary can prevail on a breach of contract claim simply by showing that the

insurer did not comply with the requirements of §§ 10113.71 and 10113.72 before

terminating the policy and denying benefits. Under our court’s recent decision in

Small v. Allianz Life Insurance Company of North America, 122 F.4th 1182 (9th Cir.

2024), the answer is no. After the summary judgment ruling in the present case,

Small rejected the violations-only theory for recovery and instead adopted a

2 23-3650 causation theory. Id. at 1192. Pursuant to the causation theory of recovery, a plaintiff

“must not only allege a violation of the Statutes, but must also show that the violation

caused them harm.” Id. at 1193. To recover, “a plaintiff must demonstrate that they

did not knowingly or intentionally let the policy lapse such that the Insurer’s

compliance with the Statutes would have caused the plaintiff to pay their premiums

and retain the policy.” Id.

In the absence of controlling California Supreme Court authority or other

intervening authority, this court is bound by Small. See Miller v. Gammie, 335 F.3d

889, 899–900 (9th Cir. 2003) (en banc). Thus, we vacate the district court’s summary

judgment order and remand for the district court to consider causation in light of

Small.

Moriarty’s motion for judicial notice, Dkt. 37, and motion to certify a question

to the California Supreme Court, Dkt. 50, are DENIED.

VACATED AND REMANDED.

3 23-3650