# United States Court of Appeals **For the Eighth Circuit**

___________________________ No. 15-1813

___________________________ Crystal Gann
lllllllllllllllllllll Plaintiff - Appellant

v. Household Life Insurance Company
lllllllllllllllllllll Defendant - Appellee

____________ Appeal from United States District Court for the Eastern District of Arkansas - Jonesboro

____________ Submitted: April 12, 2016 Filed: August 5, 2016 [Unpublished]

____________ Before COLLOTON and SHEPHERD, Circuit Judges, and BOUGH 1 , District Judge.

____________ PER CURIAM.

1 The Honorable Stephen R. Bough, United States District Judge for the Western District of Missouri, sitting by designation.Crystal Gann (“Gann”) is the beneficiary of a life insurance policy issued by Household Life Insurance Company (“House hold Life”) to Gann’s late mother, Alice Griffin (“Griffin”). Gann filed this laws uit alleging Household Life had breached the terms of the insurance policy by denying Ga nn’s claim for the policy proceeds. Gann also asserted claims for unjust enrichment, bad faith, and outrage. The district court 2 concluded that Household Life had su ccessfully asserted and shown a good faith defense pursuant to Ark. Code Ann. § 23-79-107(a)(3) (Repl. 2004), which was in effect at the time of Griffi n’s application in 2010. Therefore, the district court determined that Household Life was entitled to summary judgment.
The facts in this case are undisput ed. Griffin submitted an insurance application to Household Life online. Household Life’s underwriting process is heavily automated. If an applicant answer s “no” to seven questions, then the Medical Information Bureau conducts a database search, and if no red flags are raised, Household Life automatically issues an in surance policy without further review. One question asks, “[A]re you currently receiving disability income benefits or have you submitted a claim for disability within the pa st five years?” Griffin answered “no.” After her death, Household Life investig ated Gann’s claim under Griffin’s policy and discovered records that established Griffi n was receiving disability income benefits for a muscle, ligament, and fascia disorderwhen she applied for the life insurance. Thus, Household Life denied Gann’s claim. The parties do not dispute that if Gann had answered “yes” to the question regarding disability benefits, Household Life would not have issued the policy.
Gann appeals the district court’s adve rse grant of summary judgment on all of Gann’s claims, arguing that under Ark. Code Ann. § 23-79-107(c), the good faith defense requires a causal rela tionship between the misstatement and the loss suffered.

2 The Honorable D.P. Marshall Jr., United St ates District Judge for the Eastern District of Arkansas.
-2-Gann contends that because there was no causal relationship between Griffin’s misstatement regarding whether she was r eceiving disability benefits and her death from pneumonia, the defense was misapplied by the district court.
After reviewing de novo the district court’s interpretation of applicable Arkansas Law, see Roemmich v. Eagle Eye Dev., LLC , 526 F.3d 343, 348 (8th Cir. 2008) (de novo review of the district court’s interpretation of state law), we conclude that summary judgment in Household Life’s favor was proper for the reasons stated by the district court. See McQuay v. Arkansas Blue Cross and Blue Shield , 98 S.W.3d 454, 457-58 (Ark. Ct. App. 2003) (discussing a causal relationship as a requirement for an insure r asserting a defense under Ark. Code Ann. § 23-79- 107(a)(2), but not for the assertion of the good faith defense under Ark. Code Ann. § 23-79-107(a)(3)); Burnett v. Philadelphia Life Ins. Co. , 101 S.W.3d 843, 848 (Ark. Ct. App. 2003) (noting that the burden is on insurer “to sustain its contention that the facts not disclosed were material to the risk assumed by it or that, in good faith, it would not have issued the policy had it known the true facts” (emphasis added) (citation omitted)); compareArk. Code Ann. § 23-79-107(a)(2) (listing a misstatement that is “material either to the acceptance of the risk or to the hazard assumed by the insurer” as a possible impediment to recovery under the policy), andArk. Code Ann. § 23-79-107(c) (providing a definition for materiality—“a misrepresentation is material if there is a causal relationship between the misrepresentation and the hazard resulting in a loss under the policy or c ontract”—which suggests the provision only applies to Ark. Code A nn. § 23-79-107(a)(2)), with Ark. Code Ann. § 23-79-107(a)(3) (providing no mention of “material” but stating that the misstatement may prevent recovery where “[t]he insurer in good faith would not have i ssued the policy . . . if the facts had been made known to the insure r as required by the application for the policy”). Accordingly, we affirm the judgment of the district court. See 8th Cir. R. 47B.

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