Unpublished Disposition, 904 F.2d 710 (9th Cir. 1979)

Leslie Ann Brewer ("Brewer") appeals the district court's grant of summary judgment in favor of Bankers Life Company, Inc. ("Bankers"). Brewer had sued Bankers to recover the proceeds of a life insurance policy issued on the life of her husband by Bankers. Bankers contended that the policy was no longer in force at the time of the death of Brewer's husband. The district court agreed and granted Bankers' motion for summary judgment. We affirm.

BACKGROUND FACTS

On July 19, 1978, Brewer applied for insurance on the life of her husband. She and her husband met with one of Bankers' representatives to discuss the different types of coverage and premiums available from Bankers. The Bankers representative suggested that the Brewers should consider antedating their insurance policy so that Bankers would use a lesser age for Mr. Brewer when it assessed the risk involved in insuring Mr. Brewer. Mr. Brewer had turned forty-four on July 8, 1978, and the representative suggested that the policy be antedated to July 7, 1978.

Antedating policies is a common practice in the insurance industry. Generally an insured will have somewhat reduced premiums and a lower renewal cost if the policy is antedated. In fact, the Brewers did pay lower premiums than they would have if the policy had reflected Mr. Brewer's true age of forty-four.

The Brewers decided to apply for the Bankers' policy. They signed an application and paid the Bankers' representative about $152.00 dollars. The Brewers received a conditional receipt for insurance. The money paid approximated one monthly premium payment under the policy for which the Brewers had applied.

On September 6, 1978, the Bankers representative delivered the actual life insurance policy to the Brewers. The policy terms were slightly different from those requested in the application. However, the coverage amount was the same as requested in the application. The annual premium also was approximately the same as the amount stated in the application. The policy required that the premiums be paid annually unless the insured requested otherwise. The Brewers requested that they be permitted to pay on a monthly basis. The Brewers then gave the Bankers representative a check for about $320.00--the equivalent of two monthly payments.¹  Brewer signed an acknowledgment card stating that she had received the policy and accepted it as dated and issued. After receiving the policy, Brewer made monthly payments to Bankers through July of 1979. On the August 1979 premium notice, Brewer wrote "please cancel" and returned the notice to Bankers.

On September 15, 1979, Mr. Brewer was killed in an automobile accident. Soon after his death, Mrs. Brewer mailed a check to Bankers for the August premium on the life insurance policy. Brewer then filed a claim under the life insurance policy. Bankers denied the claim. It asserted that the policy had lapsed prior to the death of Mr. Brewer.

In August of 1983, Brewer filed suit against Bankers in state court. She alleged that the life insurance policy had not lapsed as of September 15, 1979. Brewer claimed that the actual effective date of the policy was September 6, 1978, and that she had paid premiums through September of 1979. After the state court dismissed various "Doe" defendants, Bankers removed the action to federal court. The district court then granted Bankers' motion for summary judgment. The court found that there was no genuine dispute about the fact that the proper policy date was July 7, 1978, and that Brewer's life insurance policy had lapsed as of the time of her husband's death. The court also found that there was no genuine dispute about the fact that Brewer had cancelled the Bankers policy prior to the death of her husband. The court further ruled that California law did not prohibit an insurer and an insured from antedating an insurance policy. Finally, the court ruled that Brewer lacked standing to claim that Bankers had failed to notify any assignee of the insurance policy that the policy had lapsed.

JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction pursuant to 28 U.S.C. § 1332. We have jurisdiction pursuant to 28 U.S.C. § 1291.

This court reviews de novo a district court's grant of summary judgment. Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989). However, summary judgment is appropriate in those cases where the non-moving party has failed to show that there is an actual dispute about a material fact because there is sufficient evidence from which a person could reasonably resolve the dispute in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986).

DISCUSSION

Brewer is only eligible for the insurance policy proceeds if she can establish that the life insurance policy was still in effect at the time of her husband's death. Brewer argues that the policy was still in effect at the time of her husband's death because the policy was effective on September 6, 1978, and Brewer paid twelve monthly premiums. Those twelve premiums kept the policy in effect through September 6, 1979. The policy provided a thirty-one day renewal period during which time Bankers would maintain coverage even though a premium had not been paid. Therefore, Brewer argues that the policy was still in effect at the time of Mr. Brewer's death on September 15, 1979. Brewer's argument is valid only if the parties could not, or did not, agree that the effective date of the policy was to be July 7, 1978.

A. Legality of Antedating Agreement.

California law does not prohibit insurance companies from antedating policies. See Anderson v. Mutual Life Ins. Co. of N.Y., 164 Cal. 712, 715-16, 130 P. 726 (1913); Wall v. Equitable Life Assurance Soc'y of the U.S., 33 Cal. App. 2d 112, 115, 91 P.2d 145 (1939). As the California Supreme Court noted in Anderson: "It is perfectly competent for the parties to agree that a policy shall be antedated and, when this is done, the policy takes effect by relation from the date agreed upon." 164 Cal. at 715-16 (citations omitted). However, the California courts have also made it clear that an insurance company may not unilaterally antedate a policy in order to shorten the length of time at which the company is placed at risk. Guerin v. California W. States Life Ins. Co., 229 Cal. App. 2d 325, 40 Cal. Rptr. 344 (1964).

Similarly, California Insurance Code section 480 provides that an insurer is not entitled to a premium until the insurer is exposed to some risk. Cal.Ins.Code Sec. 480 (West 1972). Section 480 does not proscribe an insurer from antedating a policy. Brewer argues that section 480 means that if an insurer is not entitled to premiums until the insurer incurs some risk, then the insurer must also time the policy provisions from the date the risk is incurred. Brewer's position is not supported by California case law. See, e.g., Smith v. Westland Life Ins. Co., 15 Cal. 3d 111, 539 P.2d 433, 123 Cal. Rptr. 649 (1975); Ransom v. Penn Mutual Life Ins. Co., 43 Cal. 2d 420, 274 P.2d 633 (1954); see also Guerin, 229 Cal. App. 2d 325. The fact that section 480 requires an insurer to provide immediate coverage to an applicant does not mean that the parties cannot also agree on some particular date from which all provisions of the policy will be timed. None of the California cases or statutes discussed above require this court to set aside as illegal an openly bargained for contract. Since the Brewers did in fact agree to antedate the life insurance policy, the Brewers are bound to that agreement.² 

B. Factual Basis for Agreement to Antedate.

The district court ruled that there was no material dispute as to the fact that Bankers and the Brewers had agreed to antedate the insurance policy. Bankers presented evidence from Bankers' representative that he had discussed antedating the policy with the Brewers and that they had wanted to antedate the policy to reflect an age of forty-three for Mr. Brewer. Furthermore, the insurance application originally had Mr. Brewer's age as forty-four but that was scratched out and replaced with forty-three. The Brewers both signed the insurance application and there is no evidence that any of the answers on the application were changed after the Brewers had signed. Bankers' representative also noted on the agent certification sheet attached to the insurance application that the policy should "save age 43." When Brewer received the policy she signed an acknowledgment card that the policy was accepted as dated and issued. Furthermore, the Bankers representative indicated that at the time he delivered the policy to Brewer, his standard practice was to go over all of the provisions of the policy with the client. Finally, Brewer paid the premiums based upon a time period that ran from the date of issue on the antedated policy.

Brewer did not present any evidence to contradict the above facts. Therefore, the district court correctly ruled that there was no material dispute as to the fact that Brewer and Bankers had agreed to antedate the policy. Since an agreement to antedate a policy is legally valid under California law and there was sufficient evidence to show that there was in fact an agreement to antedate in this case, and no material evidence to the contrary, the district court did not err when it held that the proper policy date of issue was July 7, 1978.³ 

Brewer's final argument is that Bankers failed to notify the policy assignees that Brewer's policy had lapsed. Brewer does not have standing to raise the claims of those third parties. See generally 13 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure, Sec. 3531.9 (2d ed. 1984). Therefore, we need not address the district court's rulings that Bankers had properly notified all of the policy assignees and that the statute of limitations had run.

CONCLUSION

The order of the district court granting summary judgment in favor of Bankers Life Company, Inc. is AFFIRMED.