Unpublished Disposition, 865 F.2d 263 (9th Cir. 1977)

MEMORANDUM^* 

George Cossolias, successor trustee of a trust created by Sam J. Ventimiglia, appeals in this action from the entry of judgment in favor of Mutual Life Insurance Company of New York (MONY) and George Colberg for declaratory relief and breach of fiduciary duty. Cossolias seeks reversal on the following grounds:

One. The district court erred in granting summary judgment because a reasonable jury would infer from the undisputed facts that the Four Hundred Thousand Dollar life insurance policy issued to Sam J. Ventimiglia in 1984 continued and replaced the One Hundred Thousand Dollar policy issued to him in 1977.

Two. The district court erred in concluding that the evidence was insufficient to convince a reasonable jury that Colberg owed a fiduciary duty to Ventimiglia that failure to reinstate the 1977 MONY policy would subject him to a two-year suicide exclusion clause if he obtained a new insurance policy.

Three. The court erred in concluding that there was insufficient evidence to convince a reasonable jury that Colberg was negligent in failing to inform Ventimiglia that a failure to reinstate the 1977 MONY policy would subject him to a two-year suicide exclusion clause if he obtained a new insurance policy.

* After reviewing the record in this matter, we requested counsel to file supplemental briefs addressing the jurisdiction of this court to review this diversity action in light of this court's decision in Bryant v. Ford Motor Co., 844 F.2d 602 (9th Cir. 1987), (en banc), cert. granted, 109 S. Ct. 54 (Oct. 3, 1988). We were concerned that the presence of Doe defendants may have deprived this court of jurisdiction over this matter. This jurisdictional question has become moot, however, because the parties stipulated during oral argument to the dismissal of the Doe defendants. Accordingly, we have jurisdiction over this diversity action.

II

The facts are undisputed. On November 4, 1977, MONY issued to Ventimiglia a One Hundred Thousand Dollar term life insurance policy. The policy was renewable each year. During the spring of 1983, Colberg, a MONY insurance agent, was assigned to the Ventimiglia account.

On July 12, 1983, Ventimiglia applied for a new MONY One Hundred Thousand Dollar life insurance policy. Ventimiglia intended that the new policy replace his renewable 1977 life insurance policy. On the application for the new policy, Ventimiglia responded "Yes" to the question "Will coverage applied for replace or change any life insurance or annuities?" When Colberg attempted to deliver the replacement policy, however, Ventimiglia declined to accept it because the premiums were too high.

The 1977 MONY policy lapsed on November 4, 1983, because Ventimiglia failed to pay the annual premium due on that date. This policy provided a grace period continuing coverage for 30 days after a lapse in the payment of premiums. The grace period expired on December 4, 1983. A check for $807.11 representing the accumulated dividends on the policy was forwarded to Ventimiglia on January 10, 1984. Ventimiglia cashed this check on February 2, 1984. The 1977 policy also contained a five-year reinstatement clause. The policy was not reinstated prior to Ventimiglia's death.

Sometime prior to September, 1983, Colberg contacted Dana McPeek, another insurance agent to determine whether a One Hundred Thousand Dollar insurance policy could be obtained at a lower rate from the American Agency Life Insurance Company. Ventimiglia submitted an application to McPeek for a One Hundred Thousand Dollar policy with the American Agency Life Insurance Company. This policy became effective on November 25, 1983. It remained in effect on the date Ventimiglia took his own life.

On March 16, 1984, several months after the 1977 One Hundred Thousand Dollar MONY policy lapsed, with Colberg's assistance, Ventimiglia applied for a Four Hundred Thousand Dollar life insurance policy from MONY. Ventimiglia indicated on the March 16, 1984 application that the Four Hundred Thousand Dollar policy would not replace any other life insurance.

On April 4, 1984, MONY executed and issued to Ventimiglia a yearly renewable Four Hundred Thousand Dollar policy. The April 4, 1984 MONY policy excluded coverage if the insured committed suicide within two years. Ventimiglia committed suicide seven weeks later on May 30, 1984. The lapsed 1977 MONY policy contained an identical suicide clause.

MONY refused to pay the face amount of the Four Hundred Thousand Dollar 1984 MONY policy to George Cossolias, the named beneficiary. Cossolias filed a complaint for declaratory relief on April 30, 1985, in the Superior Court in San Diego, California. In the original complaint Cossolias asked for a declaration that the two-year suicide exclusion clause in the Four Hundred Thousand Dollar MONY policy began to run on November 4, 1977, the date of the issuance of the One Hundred Thousand Dollar MONY policy. MONY in turn asked for a declaration that the two-year period set forth in the suicide exclusion clause commenced on April 12, 1984, and that Cossolias was entitled to receive only the amount of the premiums paid by Ventimiglia for the Four Hundred Thousand Dollar policy.

On March 2, 1987, Cossolias moved to amend the complaint to add a second cause of action for breach of fiduciary duty. Cossolias also sought to join Colberg and McPeek as defendants. The district court granted the motion to join Colberg as a defendant and to add a cause of action for breach of fiduciary duty. The motion to join McPeek was denied because it would destroy the jurisdiction of the court in this diversity action.

On September 1987, MONY and Colberg filed a motion for summary judgment. On September 24, 1987, Cossolias filed a motion to file a second amended complaint to add a cause of action for negligence against Colberg. On October 19, 1987, the district court denied the motion to file a second amended complaint because it was untimely and granted the motions for summary judgment.

Cossolias filed a notice of appeal from the judgment entered upon the granting of the motions for summary judgment. He did not appeal from the denial of his motion to file a second amended complaint.

III

We review a grant of summary judgment de novo. Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir. 1986) (citing Lojek v. Thomas, 716 F.2d 675, 677 (9th Cir. 1983)). We must determine, viewing the evidence in the light most favorable to the non-moving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir. 1986). " [T]here is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby Inc., 477 U.S. 242, 249 (1986).

Cossolias contends that the undisputed evidence was sufficient to support a judgment awarding him the face amount of the Four Hundred Thousand Dollar MONY policy. He argues that because the Four Hundred Thousand Dollar MONY policy issued on April 4, 1984, was a continuation or replacement of the One Hundred Thousand Dollar MONY policy issued on November 4, 1977, the two-year suicide exclusion period began running on November 4, 1977.

Because this action was removed on diversity grounds from the San Diego Superior Court, we must apply California law. Strassburg v. New England Mutual Life Ins. Co., 575 F.2d 1262, 1263 (9th Cir. 1978) (per curiam). The parties have not cited, and we have not found any California case that has addressed the question of when the period established by a suicide exclusion clause begins to run. If there is no controlling state law, a federal court exercising its diversity jurisdiction "must use its own best judgment in predicting how the state's highest court would decide the case." Takahashi v. Loomis Armored Car Service, 625 F.2d 314, 316 (9th Cir. 1980). In making this prediction, we "may be aided by looking to well-reasoned decisions from other jurisdictions." Id.

Cases outside of California have established the general rule that when a second policy is a continuation of a pre-existing policy, a suicide clause begins to run from the effective date of the earlier policy. See e.g., United Fence Co. v. Great-West Life Assurance Co., 150 Ariz. 373, 723 P.2d 722, 725 (1986); Occidental Life Ins. Co. v. Harley, 513 S.W.2d 897, 899 (Tex.Civ.App.1974); Annot. 37 A.L.R.3d 933, 951 (1971). A continuation of coverage has been found where the parties contemplated that a second policy would replace or extend the first policy and the second policy was substantially similar to the first policy or was issued pursuant to a conversion provision. See, e.g., Occidental Life Ins. Co., 513 S.W.2d at 901; Swanson v. First Fidelity Life Ins. Co., 214 Neb. 654, 335 N.W.2d 538, 541-42 (1983).

On the other hand, if the second policy is not a renewal or conversion of the first policy and there is no evidence that the parties intended the later policy to replace the earlier policy, the second policy cannot be considered a replacement. Under these circumstances, the suicide clause begins to run from the effective date of the later policy. See Lazovick v. Sun Life Insurance Co., 586 F. Supp. 918, 925 (E.D. Pa. 1984).

Cossolias has failed to present any evidence tending to prove that the Four Hundred Thousand Dollar MONY policy was a replacement for the lapsed One Hundred Thousand Dollar MONY policy issued November 4, 1977. Indeed, the evidence seems to cut the other way. The One Hundred Thousand Dollar MONY policy expired for nonpayment of premiums before MONY issued the Four Hundred Thousand Dollar policy, and was never reinstated.¹  The fact that Ventimiglia obtained an American Agency Life Insurance policy with the same face value as the 1977 MONY policy before that policy expired strongly suggests that the American Agency Life Insurance policy was the replacement for the MONY policy. Furthermore, Ventimiglia indicated on the application form that he did not intend the Four Hundred Thousand Dollar policy to replace the expired 1977 policy. On the application, Cossolias responded "No" to the question "Will coverage applied for replace or change any life or health insurance or annuities?" Because Cossolias has offered no proof of specific facts which, if true, would entitle him to a judgment in his favor, we affirm the district court's grant of summary judgment on this issue.

IV

Cossolias also contends that Colberg breached a fiduciary duty to procure a policy that did not contain a suicide exclusion clause. We disagree.

An insurance agent ordinarily assumes only "the obligation to use reasonable care, diligence, and judgment in procuring the insurance requested by the insured." Jones v. Grewe, 189 Cal. App. 3d 950, 954, 234 Cal. Rptr. 717, 719 (1987). "It is the insured's responsibility to advise the agent of the insurance he wants." Id. at 956, 234 Cal. Rptr. at 721. There is no evidence in the record that Ventimiglia advised Colberg that he wanted a life policy that could not be defeated by a suicide clause or that he was contemplating taking his own life.² 

"An agent may, however, assume additional duties by an express agreement or a holding out." Id. at 954, 234 Cal. Rptr. at 720. However, a court cannot infer the existence of a special relationship from the mere allegation "that an insured has purchased insurance from an insurance agent ... and followed his advice on certain insurance matters." Id. at 956, 234 Cal. Rptr. at 721.

Accordingly, because Cossolias has failed to offer any facts that would persuade a reasonable jury that Colberg owed Ventimiglia a fiduciary duty, we affirm the grant of summary judgment on this issue as well.

V

Cossolias also asks us to consider his claim that Colberg was negligent in fulfilling his responsibility to Ventimiglia. The district court did not address this issue because it denied Cossolias's motion to add this cause of action to his complaint because it was untimely. Cossolias did not appeal the denial of this motion. As we can only consider those theories and issues which were before the district court, see, e.g., Maricopa County v. American Pipe & Constr. Co., 431 F.2d 1145 (9th Cir. 1970), (per curiam), cert. denied, 401 U.S. 937 (1971); Deville v. Shell Oil Co., 366 F.2d 123, 125 (9th Cir. 1966); 10 C.Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2716, at 650-54 (1983), we are precluded from addressing this claim of negligence.

The judgment is AFFIRMED.