722 F.2d 1498 (9th Cir. 1984), 83-5706, Pacific Mut. Life Ins. Co. v. American Guaranty Life Ins. Co.

Docket Nº:83-5706.
Citation:722 F.2d 1498
Party Name:PACIFIC MUTUAL LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. AMERICAN GUARANTY LIFE INSURANCE COMPANY, Defendant-Appellant.
Case Date:January 05, 1984
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1498

722 F.2d 1498 (9th Cir. 1984)

PACIFIC MUTUAL LIFE INSURANCE COMPANY, Plaintiff-Appellee,

v.

AMERICAN GUARANTY LIFE INSURANCE COMPANY, Defendant-Appellant.

No. 83-5706.

United States Court of Appeals, Ninth Circuit

January 5, 1984

Argued and Submitted Nov. 8, 1983.

Page 1499

Martha G. Bannerman, Adams, Duque & Hazeltine, Los Angeles, Cal., for plaintiff-appellee.

Lane J. Ashley, Sedgwick, Detert, Moran & Arnold, Los Angeles, Cal., for defendant-appellant.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN and ANDERSON, Circuit Judges, and KING, District Judge. [*]

J. BLAINE ANDERSON, Circuit Judge:

American Guaranty Life Insurance Company appeals the granting of Pacific Mutual Life Insurance Company's motion for summary judgment. The district court, finding no genuine issue as to any material fact, construed relevant provisions of the California Insurance Code to permit a prior carrier of group medical coverage to terminate an extension of benefits to a totally disabled insured when replacement insurance becomes effective, shifting responsibility for payment of benefits to the replacement insurer. We affirm.

I. BACKGROUND

On October 14, 1977, Pacific Mutual Life Insurance Company (Pacific Mutual) provided medical expense benefits to the eligible employees of Petrocon Engineering Company (Petrocon) pursuant to Pacific Mutual's Group Policy No. GQ-14049. Subsequently, American Guaranty Mutual Life Insurance Company (American Guaranty) agreed with Petrocon to provide group medical benefits upon termination of the Pacific policy. This replacement coverage, pursuant to American Guaranty's Group Policy No. TG-418, became effective on January 1, 1981.

In May of 1980, during Pacific Mutual's policy period, Helen Moss became totally disabled. Mrs. Moss was the dependent of a Petrocon employee and as such was insured under the terms of the Pacific Mutual policy. This disability continued until her death on October 4, 1981, and Pacific Mutual paid all her medical expenses during that time. From January 1, 1981, until her death in October, Mrs. Moss incurred medical expenses of $74,872.03. Pacific Mutual paid the 1981 medical expenses under protest, with the reservation that it would seek reimbursement for those sums from American Guaranty.

A diversity action ensued. The district court granted...

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