Hartford Life and Annuity Insurance Company v. Doris Barnes Family 2008 Irrevocable Trust

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY,
Plaintiff - Appellant,
v.
DORIS BARNES FAMILY 2008
IRREVOCABLE TRUST and DIANE
GRIMMIG, as Successor Trustee of the
Doris Barnes Family 2008 Irrevocable
Trust,
Defendants - Appellees,
and
JOHANN JOHN JEAN,
Defendant.
No. 12-55464
D.C. No. 2:10-cv-07560-PSG-
DTB
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
FILED
JAN 13 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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Submitted January 9, 2014**
Pasadena, California
Before: W. FLETCHER, M. SMITH, and WATFORD, Circuit Judges.
Plaintiff-Appellant Hartford Life and Annuity Insurance Company
(Hartford) appeals from the district court’s order granting Defendants-Appellees’
(Defendants) motion for summary judgment and denying Hartford’s motion for
summary judgment. Because the parties are familiar with the facts and procedural
history of this case, we repeat only those facts necessary to resolve the issues
raised on appeal. We affirm.
Hartford contends that the Barnes Policy is void as a “gaming or wagering”
policy under section 252 of the California Insurance Code. But an insurance policy
is an impermissible “gaming or wagering” policy only if there is no insurable
interest at the time the policy takes effect. Paul Revere Life Ins. Co. v. Fima, 105
F.3d 490, 493 (9th Cir. 1997); Jimenez v. Protective Life Ins. Co., 8 Cal. App. 4th
528, 536 (1992). At the time the Barnes Policy took effect, the trust, as the owner
and beneficiary of the Policy, had an insurable interest in the life of its settlor. See
Lincoln Life & Annuity Co. of N.Y. v. Berck, No. D056373, 2011 WL 1878855, at
*6 (Cal. Ct. App. May 17, 2011); Shaw v. Johnson, 59 P.2d 876, 879 (Cal. Dist. Ct.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
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App. 1936). Gary Barnes, the trustee of the trust, had an insurable interest in his
mother’s life. See Cal. Ins. Code § 10110.1(a). Donald Barnes, the beneficiary of
the trust, had an insurable interest in the life of his wife. See id. And Doris Barnes
had an insurable interest in her own life. See Cal Ins. Code § 10110.1(b). Thus,
the Barnes Policy is not void as a “gaming or wagering” policy.
There is no merit to Hartford’s contention that the Barnes Policy is void ab
initio because the Barnes family always intended to sell it. The plain language of
the California Insurance Code permits owners of life insurance policies to transfer
such policies to third parties who lack an insurable interest. See Cal. Ins. Code §
10130. And the California Court of Appeal recently explained that a pre-existing
intent to transfer life insurance policies “does not negate the fact that when the trust
acquired the policies, they were supported by an insurable interest.” Berck, 2011
WL 1878855, at *7.1
We also reject Hartford’s argument that the Barnes Policy is void because
Doris Barnes was not insurable for $8.75 million. “An individual has an unlimited
insurable interest in his or her own life . . . and may lawfully take out a policy . . .
and have the policy made payable to whomsoever he or she pleases, regardless of
1 The pre–2010 version of California Insurance Code section 10110.1 is
applicable here.
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whether the beneficiary designated has an insurable interest.” Cal. Ins. Code §
10110.1(b) (emphasis added). Thus, Doris Barnes was legally entitled to insure
her own life in any amount she wished. Her family was similarly entitled to obtain
such a policy, as the Insurance Code provides that an insurable interest includes “a
substantial interest engendered by love and affection in the case of individuals
closely related by blood or law.” Cal. Ins. Code § 10110.1(a).
Hartford’s remaining arguments are similarly unavailing. The parties’
dispute regarding the validity of the trust that acquired the Barnes Policy is not a
“genuine dispute as to any material fact,” Fed. R. Civ. P. 56(a), because it does not
“affect the outcome of the suit under the governing law . . . .” Nat’l Ass’n of
Optometrists & Opticians v. Harris, 682 F.3d 1144, 1147 (9th Cir. 2012); see also
Goodrich v. Briones (In re Schwarzkopf), 626 F.3d 1032, 1037 (9th Cir. 2010).
Further, Hartford proffers no evidence from which a rational trier of fact could
conclude that an agreement to sell the Barnes Policy was reached before the Policy
took effect. See Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081–82 (9th Cir.
1996) (“[M]ere allegation and speculation do not create a factual dispute for
purposes of summary judgment.”).
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.
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