In the

United States Court of Appeals

For the Seventh Circuit

No. 11-1170

HABIBOLLAH TABATABAI, 

Plaintiff-Appellant,

v.

WEST COAST LIFE INSURANCE COMPANY,

Defendant-Appellee,

Appeal from the United States District Court

for the Eastern District of Wisconsin.

No. 2:08-cv-00227-JPS—J.P. Stadtmueller, Judge.

ARGUED SEPTEMBER 12, 2011—DECIDED DECEMBER 16, 2011

Before BAUER, ROVNER and WILLIAMS, Circuit Judges.

BAUER, Circuit Judge. The plaintiff-appellant, Habibollah

Tabatabai (“Tabatabai”) sued defendant-appellee West

Coast Life Insurance Co. (“West Coast Life”) for breach

of contract and for a violation of West Coast Life’s

implied duty of good faith and fair dealing. West Coast

Life moved for summary judgment and the district court

granted the motion on December 21, 2010. This appeal

followed. We affirm.
2 No. 11-1170

I. BACKGROUND

On June 17, 2006, Tabatabai’s wife, Firouzeh Keshmiri

(“Ms. Keshmiri”), completed an application for a $500,000

life insurance policy with the assistance of Darrell Alvine

(“Alvine”), a neighbor and licensed insurance intermediary. The application required Ms. Keshmiri to choose a

specific rate classification for which she wished to apply.

The options included “Super Preferred,” “Preferred,”

“Standard,” “Rated,” and “Other.” Ms. Keshmiri opted for

the “Super Preferred” classification and delivered the

application, together with an initial payment in the amount

of $100, to Alvine. In addition to the $100 payment,

Ms. Keshmiri signed a conditional receipt agreement

(“CRA”) with West Coast Life. “[A CRA] is a device

used by the life insurance industry through which an

applicant is immediately insured upon payment of the

initial premium at the time of application and upon

satisfaction of various conditions precedent to coverage.”

Tabatabai v. West Coast Life Ins. Co., No. 08-cv-227, 2010

U.S. Dist. LEXIS 135507, at *13 (E.D. Wis. Dec. 21, 2010).

West Coast Life’s CRA stated in part:

CONDITIONS UNDER WHICH INSURANCE MAY

BECOME EFFECTIVE PRIOR TO POLICY DELIVERY

Unless each and every condition below has been

fulfilled exactly, no insurance will become effective

prior to policy delivery to the Owner: 

(A) on the Effective Date the Proposed Insured(s) is

(are) insurable exactly as applied for under the Company’s printed underwriting rules for the plan,

amount and premium rate class applied for;
No. 11-1170 3

The record indicates there were other blood tests with results 1

exceeding the usual clinical range for a “Super Preferred”

applicant. However, Ms. Keshmiri’s cholesterol test was

focused on in the summary judgment and oral argument

phases of litigation because of its significant impact on her

potential insurability.

. . .

(C) the Proposed Insured(s) has/have completed all

examinations and/or tests requested by the Company;

. . .

TERMINATION AND REFUND OF PREMIUM

There shall be no insurance coverage under this

Agreement and this Agreement shall be void if:

. . .

(B) if the application to which this Agreement was

attached is not approved as applied for by the Company within ninety business days from its date.

On June 28, 2006, Ms. Keshmiri met with a paramedical

examiner and submitted blood and urine specimens

for lab testing. Once available, the lab results were

promptly sent to Ms. Keshmiri. Among the various tests

conducted, one indicated that her cholesterol level of 229

was outside the usual clinical range of 140-199. In addi- 1

tion, Ms. Keshmiri’s urine sample raised concern due to

a high number of red blood cells and was considered, at

best, inconclusive. By July 6, 2006, West Coast Life

had ordered its insurance broker, The O’Brien Financial
4 No. 11-1170

The O’Brien Financial Group, Inc., a general broker agent of 2

West Coast Life, was one of the original defendants named

in the complaint by Tabatabai. However, Tabatabai voluntarily

dismissed his claims against The O’Brien Financial Group

rendering West Coast Life the sole defendant.

At some point between Ms. Keshmiri’s hospitalization and her 3

denial of an insurance policy, a second urine sample was

obtained and tests indicated it contained higher-than-normal

levels of bacteria, the cause of which (whether due to illness

or improper obtainment) remains unresolved.

Group, Inc. , to obtain Ms. Keshmiri’s medical records 2

from her physician and to request a second urine

specimen from Ms. Keshmiri. The request for the second

urine specimen occurred sometime in July or August of

2006, though the exact date remains unclear.

On July 22, 2006, Ms. Keshmiri was hospitalized and

diagnosed with a brain tumor and two days later she

underwent surgery for its removal. The next day, July 23,

2006, Alvine alerted O’Brien Financial that Ms. Keshmiri

was expecting O’Brien Financial to call to arrange for a

second urine test.

Finally, On August 9, 2006, West Coast Life declared

Ms. Keshmiri uninsurable based on her brain surgery.

A little over a year later, Ms. Keshmiri died. It is

Tabatabai’s position that the request for the second

urine specimen was communicated to Ms. Keshmiri in

a untimely and ineffective fashion; that but for West

Coast Life’s delay, Ms. Keshmiri would have qualified

for coverage prior to her brain tumor diagnosis.3
No. 11-1170 5

On January 29, 2008, Tabatabai filed a complaint in

the Milwaukee County Circuit Court naming West Coast

Life and The O’Brien Financial Group as defendants.

Pursuant to 28 U.S.C. § 1332, West Coast Life removed

the action to the United States District Court for the

Eastern District of Wisconsin. After voluntarily dismissing the claim against The O’Brien Financial Group,

Tabatabai filed an amended complaint against West

Coast Life asserting four causes of action: (1) breach of

contract; (2) estoppel; (3) bad faith; and (4) negligence.

West Coast Life filed a motion for summary judgment.

In responding to the motion, Tabatabai chose to pursue

the breach of contract claim, and breach of the implied

duty of good faith and fair dealing. On December 21,

2010 the district court granted West Coast Life’s motion

for summary judgment and Tabatabai timely appealed.

II. DISCUSSION

The grant of summary judgment included a finding

that no genuine issue of material fact on which Tabatabai

could prevail. We review the grant of summary judgment

de novo and construe all facts in favor of the non-moving

party. Kimmel v. Western Reserve Life Assur. Co., 627 F.3d

607, 608 (7th Cir. 2010). Tabatabai argues that the district

court erred (1) when it determined that Tabatabai was

required to provide evidence of intentional or purposeful

misconduct in order to invoke the doctrine of prevention,

and (2) when it determined that West Coast Life did

not owe an implied duty of good faith and fair dealing.
6 No. 11-1170

A. The Doctrine of Prevention Claim

Tabatabai argues that the district court erred when it

ruled that he was required to provide evidence of intentional or purposeful misconduct before invoking the

doctrine of prevention. In contract law, the general principle known as the doctrine of prevention provides that,

“if one party to a contract hinders, prevents, or makes

impossible performance by the other party, the latter’s

failure to perform will be excused.” 13 Richard A. Lord,

Williston on Contracts § 39:3 (4th ed. 2000). Tabatabai

argued that the doctrine of prevention should be applied

here because of West Coast Life’s failure to notify

Ms. Keshmiri of the need for a second urine specimen in

a timely fashion. According to Tabatabai, West Coast

Life’s unreasonable delay and failure to adequately notify

Ms. Keshmiri of its request for a second urine specimen

prevented Ms. Keshmiri from satisfying that condition,

and therefore West Coast Life should be barred from

relying on her failure to satisfy the condition as a

defense to enforcement of the CRA. Tabatabai directs

our attention to two cases. The first one, N.L.R.B. v.

Local 554, Graphic Commc’ns Int’l, AFL-CIO, is a case

involving a dispute over a collective bargaining agreement. N.L.R.B v. Local 554, Graphic Commc’ns Int’l, AFLCIO, 991 F.2d 1302 (7th Cir. 1993) In that case, the

National Labor Relations Board sought enforcement of

an order on behalf of World Color Press. World Color

Press and the defendant labor union had entered into

an agreement, the validity of which depended on

approval by the international union. To satisfy this con-
No. 11-1170 7

dition, the defendant had to seek the approval of the

international union president, which it refused to do.

The evidence supported the Board’s argument that it

was the defendant’s dilatory tactic of refusing to seek

approval from the union president that prevented the

agreement from becoming effective. On review, this

Court enforced the Board’s order based on the general

principle behind the doctrine of prevention. We stated,

“[T]he nonoccurrence or nonperformance of a condition

is excused where that failure of the condition is caused

by the party against whom the condition operates to

impose a duty.” Id. at 1302. In an effort to draw a

parallel between N.L.R.B. and his suit, Tabatabai argues

that this Court’s use of “dilatory”, with regard to the

labor union’s behavior, refers to something other than

intentional or purposeful misconduct. We disagree.

West Coast Life’s actions can be easily distinguished

from that of the defendant labor union. West Coast

Life acted in good faith in both the handling and the

underwriting of Ms. Keshmiri’s policy. Moreover, the

record indicates multiple occasions in which agents

of West Coast Life took steps in an effort to notify

Ms. Keshmiri of the necessary second urine specimen

prior to her hospitalization. Finally, as even Tabatabai

admitted, there was at least one successful attempt, in

the form of a voicemail, notifying her of their request.

We agree that there is no evidence of a purposeful

design on the part of West Coast Life to prevent

Ms. Keshmiri from complying with the conditions

required by the CRA.
8 No. 11-1170

The second case Tabatabai cites is Rohde v. Massachusetts

Mutual Life Ins. Co. In that case, the appellant was a

widow whose husband died of a heart attack on the

same day he had completed an application and medical

examination for life insurance. When the plaintiff sought

to recover as beneficiary, the defendant denied her

claim after determining that the deceased was not insurable under the policy for which he had applied. Rohde

v. Massachusetts Mut. Life Ins. Co., 632 F.2d 667, 668

(6th Cir. 1980). The Sixth Circuit determined that the

insurance company had acted in bad faith and as a result the defendant “was without reasonable grounds in

determining that plaintiff’s husband failed to meet the

requirements for the policy sought.” Rohde, 632 F.2d at 670.

The record regarding Ms. Keshmiri suggests no such

bad faith; rather, it suggests reasonable grounds for

denying her a policy. Even setting aside the urine

analyses, her cholesterol level was well beyond the usual

clinical range for a “Super Preferred” applicant. It is

undisputed that these results alone were grounds for

denying the policy she applied for. Moreover, it is undisputed that West Coast Life was within its rights to deny

Ms. Keshmiri a policy upon learning of her brain tumor.

In any event, there was no evidence of purposeful misconduct, and the district court properly dismissed

his claim.

B. The Good Faith and Fair Dealing Claim

The argument that West Coast Life violated an implied

duty of good faith and fair dealing, required an initial
No. 11-1170 9

determination as to whether or not the district court

erred in finding that no contractual agreement existed

between the parties. The district court stated: 

[T]he language of the CRA is unambiguous and provides that insurability and completion of all tests or

examinations required by West Coast Life shall be

conditions precedent and, thus, must be satisfied

prior to the effectiveness of coverage. . . . Therefore, in

this case, an interim contract of insurance would

arise only upon West Coast Life’s good faith determination that the applicant was insurable exactly

as applied for and upon the applicant’s completion

of all requested tests and examinations.

Tabatabai v. West Coast Life Ins. Co., No. 08-CV-227, 2010

U.S. Dist. LEXIS 135507, at *5 (E.D. Wis. Dec. 21, 2010)

(emphasis added).

By terms of the CRA, to form any contract between

Ms. Keshmiri and West Coast Life, it was required that

requests to Ms. Keshmiri by West Coast be satisfied

and that West Coast Life approved the application and

delivered the policy.

It is undisputed that Ms. Keshmiri did not submit the

second urine specimen ordered by West Coast Life. It is

also undisputed that Ms. Keshmiri’s cholesterol test

revealed results that exceeded the usual clinical range

for a “Super Preferred” applicant. Because Ms. Keshmiri

did not satisfy all of the necessary requirements, and

because it was impossible for her to qualify for a policy

“exactly as applied for,” no contractual agreement existed.
10 No. 11-1170

Tabatabai contends that the district court erred in

dismissing the claim that West Coast Life owed

and breached an implied duty of good faith and fair

dealing. According to Tabatabai, when Ms. Keshmiri

provided her application, paid her initial $100 premium,

and complied with West Coast Life’s initial request

for blood and urine specimens, she and West Coast

Life entered into a binding contractual relationship rendering the CRA effective. While Tabatabai correctly

argues that under Wisconsin law an implied duty of

good faith and fair dealing exists in all contractual relationships, this argument ultimately fails. As both the

district court and we have noted, because Ms. Keshmiri

did not satisfy the conditions precedent required by

the CRA, regardless of the unfortunate nature of the

circumstances, no contract was ever formed. Established

Wisconsin law states, “If there is no contract, the

implied duty of good faith and fair dealing does not

come into play.” NII-JII Entm’t, LLC v. Troha, 2007 WI

App. 183 (Wis. Ct. App. 2007).

III. CONCLUSION

For the reasons stated, summary judgment in favor of

the defendant-appellee is affirmed.

12-16-11