* This disposition is not appropriate for publication and is not precedent except as

provided by 9th Cir. R. 36-3.

** The Honorable Richard Mills, United States District Judge for the Central District

of Illinois, sitting by designation.

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN NICHOLS,

 Plaintiff-counter-defendant-

 Appellant,

v.

THE NORTHWESTERN MUTUAL 

LIFE INSURANCE COMPANY,

 Defendant-counter claimant - 

 Appellee.

No. 10-55650

D.C. No. 09-01068 VAP (CWx)

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

Virginia A. Phillips, District Judge, Presiding

Argued and Submitted November 16, 2011

Pasadena, California

Before: W. FLETCHER and RAWLINSON, Circuit Judges, and MILLS,**

District Judge.

John Nichols appeals the district court’s entry of summary judgment in favor

of Northwestern Mutual Life Insurance Company. We have jurisdiction under 28

FILED

JUN 29 2012

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2

U.S.C. § 1291. We review de novo, see Bravo v. City of Santa Maria, 665 F.3d

1076, 1083 (9th Cir. 2011), and we affirm.

I.

Nichols brought this diversity action against Northwestern Mutual after the

insurance company rescinded his disability policy and reformed his life insurance

policy. He sought damages, attorney’s fees, costs, and declaratory relief based

upon the following claims: (1) breach of contract; (2) fraud; (3) breach of implied

covenant of good faith and fair dealing; and (4) intentional infliction of emotional

distress. Northwestern Mutual lodged a counterclaim against Nichols seeking

rescission of the policy.

The district court granted summary judgment to Northwestern Mutual both

on its rescission counterclaim, and on all of Nichols’ claims.

II.

From August 2001 to the end of 2006, Nichols saw his chiropractor, Dr.

Rodney Cross, in excess of 100 times, seeking treatment primarily for tension

headaches, neck pain, and lower back pain.

In addition, Nichols was involved in an automobile accident in December

2004, and visited Dr. Cross complaining of neck pain, lower back pain, and

tingling in both hands and both feet. At Dr. Cross’ request, Nichols’ neck was x-
3

rayed.

However, while applying for life and disability insurance with Northwestern

Mutual over the course of several months in 2007, Nichols provided information at

odds with his significant chiropractic treatment. He signed a medical history

questionnaire, indicating (1) that he had not consulted a chiropractor in the

previous five years; (2) that in the previous ten years he had not had, been told he

had, or been tested or treated for “headaches or any problem, disease or disorder of

the brain or nervous system”; (3) that in the previous ten years he had not had,

been told he had, or been tested or treated for “any pain, problem, disease or

disorder of the muscles, bones, joints, spine, back, neck or extremities”; and (4)

that in the previous five years he had not had “any diagnostic studies (EKG, x-ray,

blood tests or any other).” Nichols also denied receiving chiropractic treatment in

other application documents.

We conclude that Northwestern Mutual had a right to rescind the disability

insurance policy and reform the life insurance policy because Nichols repeatedly

made false representations and concealed material information in the application

process. See O’Riordan v. Kemper Fed. Life Assurance, 36 Cal. 4th 281, 286-87

(2005). Nichols’ declarations regarding his health history were material, and he

had an obligation to communicate this information to Northwestern Mutual. See
4

Cal. Ins. Code § 332.

Nichols’ explanations for why he submitted incorrect information–the

questions were asked too quickly, he did not read the forms before signing them,

he did not think he had a disorder, and that he had just had a blood test–are

unavailing. The district court correctly determined that Nichols failed to raise a

triable issue of material fact on this issue.

We are not persuaded by Nichols’ claim that Northwestern Mutual waived

its right to rescind because it had notice of his chiropractic treatment. At a

preliminary “getting acquainted” meeting, Nichols told his insurance agent that he

had seen a chiropractor since college for health maintenance. In addition, viewing

the facts in the light most favorable to Nichols, he told a Northwestern Mutual

employee Dr. Cross’ name and the date of his last chiropractic appointment in a

telephone interview that took place during the application process. 

Waiver is an affirmative defense, upon which Nichols bears the burden of

proof, and he has to show a genuine issue of material fact regarding waiver to

defeat summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 

The district court correctly held that these limited revelations of chiropractic visits

for routine maintenance did not “distinctly imply” that Nichols had a lengthy

history of headaches and back pain and extensive chiropractic treatment. See Cal.
5

Ins. Code § 336; West Coast Life Ins. v. Ward, 132 Cal. App. 4th 181, 188 (2005).

III.

There is a conflict between California and Oregon law regarding the implied

covenant of good faith and fair dealing. While California recognizes the implied

covenant of good faith and fair dealing in relation to first party insurance disputes,

Oregon does not. Compare Employers’ Fire Ins. Co. v. Love It Ice Cream Co., 64

Or. App. 784, 791 (1983), with Century Sur. Co. v. Polisso, 139 Cal. App. 4th 922,

948-49 (2006). (The parties agree that there is no material difference between

Oregon and California law on the remaining claims, and we, like the district court,

have used California law in analyzing those claims.)

We look to California choice of law rules to determine whether to apply the

laws of California or Oregon to the good faith and fair dealing claim. See Klaxon

Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (federal courts sitting in

diversity apply the choice of law rules of the forum state).

California uses governmental interest analysis, applying the law of the

jurisdiction whose interest would be more impaired if its law is not applied. See

Wash. Mut. Bank v. Superior Ct., 24 Cal. 4th 906, 915, 920 (2001); Love v.

Associated Newspapers, Ltd., 611 F.3d 601, 610 (9th Cir. 2010). California’s

interest is in protecting the rights of its resident, while Oregon’s interest is seeing
6

that its laws are applied to Oregon insurance contracts.

Nichols was an Oregon resident, he used an Oregon agent, the application

process and medical examination occurred in Oregon, the policy was issued in

Oregon, the policy states that Oregon law controls, and Nichols suffered the injury

giving rise to his disability claim in Oregon. 

We hold that Oregon law applies, because its interests would be more

greatly impaired if California’s law was applied. See Zimmerman v. Allstate Ins.

Co., 179 Cal. App. 3d 840, 847 (1986). Accordingly, Northwestern Mutual is

entitled to summary judgment on the claim of breach of the implied covenant of

good faith and fair dealing. See Employers’ Fire Ins. Co., 64 Or. App. at 791.

IV.

Nichols’ breach of contract claim fails because once it is determined that the

policy was properly rescinded the contract is extinguished and Nichols can no

longer recover under it. See Cal. Civ. Code § 1688; Imperial Cas. & Indem. Co. v.

Sogomonian, 198 Cal. App. 3d 169, 184 (1988)

The district court properly found that Nichols failed to demonstrate facts that

would establish the elements of his fraud claim. See Lovejoy v. AT&T Corp., 92

Cal. App. 4th 85, 93 (2001).

Northwestern Mutual is entitled to summary judgment on the intentional
7

infliction of emotional distress claim. Given our determination that Northwestern

Mutual was entitled to rescind the policy, its denial of benefits cannot be classified

as “extreme and outrageous conduct.” See Christensen v. Superior Ct., 54 Cal. 3d

868, 903 (1991).

AFFIRMED.
Nichols v. Northwestern Mut. Life Ins. Co., No. 10-55650

Rawlinson, Circuit Judge, concurring:

I concur in the result.

FILED

JUN 29 2012

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS