National Life Insurance Co. v. Saks, 111815 FED9, 13-56796

Docket Nº:13-56796, 13-56901
Party Name:NATIONAL LIFE INSURANCE COMPANY; PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Plaintiffs-counter-defendants - Appellees, v. LAWRENCE SAKS, M.D., Defendant-counter-claimant -Appellant. NATIONAL LIFE INSURANCE COMPANY; PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Plaintiffs-counter-defendants - Appellants, v. LAWRENCE SAKS, M.D., Defendant-counte
Judge Panel:Before: W. FLETCHER and GOULD, Circuit Judges and CHRISTENSEN, Chief District Judge.
Case Date:November 18, 2015
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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NATIONAL LIFE INSURANCE COMPANY; PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Plaintiffs-counter-defendants - Appellees,

v.

LAWRENCE SAKS, M.D., Defendant-counter-claimant -Appellant.

NATIONAL LIFE INSURANCE COMPANY; PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, Plaintiffs-counter-defendants - Appellants,

v.

LAWRENCE SAKS, M.D., Defendant-counter-claimant -Appellee.

Nos. 13-56796, 13-56901

United States Court of Appeals, Ninth Circuit

November 18, 2015

NOT FOR PUBLICATION

Argued and Submitted November 3, 2015-Pasadena, California

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding D.C. Nos. 2:07-cv-03061-GW-SS

Before: W. FLETCHER and GOULD, Circuit Judges and CHRISTENSEN, [**] Chief District Judge.

MEMORANDUM [*]

Lawrence Saks appeals a jury verdict finding him liable for fraud and awarding National Life Insurance and Provident Insurance (NL/P) restitution for disability benefits and waived premiums that Saks wrongfully obtained. NL/P cross-appeals the jury's award to Saks on his counterclaim for breach of good faith and fair dealing, which the judge declined to vacate despite the jury's finding that Saks acted with unclean hands. We affirm.

1. The jury instructions erroneously stated that Saks could recover future benefits on his breach of contract claim and did not tell the jury that it could award future benefits on his breach of good faith claim. See Erreca v. W. States Life Ins. Co., 19 Cal. 2d 388, 402 (1942); Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809, 824 n.7 (1979). This legal error was harmless, however, because the only damages to which the jury found Saks was entitled were for mental suffering related to NL/P's investigation of his claim, and we have no reason to believe the jury would have awarded Saks future damages for mental distress based on a claim investigation that occurred about six years before the trial. See Chess v. Dovey, 790 F.3d 961, 977 (9th Cir. 2015) (harmless error standard).

2. The district court did not err in instructing the jury on unclean hands. We reject Saks's argument that the jury improperly used the instruction as a "sword" to fulfill an element of NL/P's fraud claim; the jury could have properly determined that the evidence presented at trial applied to both the fraud verdict and the unclean hands finding...

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