N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
ER NEST O. AB B IT, on be ha l f of him se lf and on be ha l f of a ll pe rsons simila rly situa te d, Pla i ntiff-Appe lla nt,
v. ING USA ANNUITY AND LIFE INSUR ANC E C OM PANY; ING U.S., INC ., De fe nda

n ts-Appe lle e s. No. 17-55836 D.C . No. 3:13-c v-02310-GPC -W VG
M EM OR ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Southe rn Distric t of C a lifornia Gonz a lo P. C urie l, Distric t Judge , Pre siding Argue d a nd Subm itte d April 12, 2019 Pa sa de n a , C a l ifornia B e fore : PAEZ a

nd C LIFTON, C irc uit Judge s, a nd ENGLAND, ** Distric t Judge
. Pla intiff-Appe lla

nt Erne st Abbit a

ppe a ls the distric t c ourt’ s orde rs gra nting 

# FIL ED M AY06 2019 M OLLY C. DW Y ER, CLERK U
. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The Honora

ble M orrison C . Engla

nd, Jr., Unite d Stat e s Distric t Judge for the Ea ste rn Distric t of C a lifornia , sitting by de signa t ion.De fe nda

nts-Appe lle e s ING USA Annuity and Life Insura

nc e C om pa ny and ING U.S., Inc
. ’ s m otions for sum m ary judgm e nt. R e v ie wing de novo, we a ffirm
. Se e J one s v . Roy al Admin. Se rv

s., Inc
. , 887 F.3d 443, 447 (9th C ir. 2018). 1. As the distric t c ourt re c ogniz e d, e ve n if the e v ide nc e is vie we d in the light
m ost fa vora ble to Abbit, se e C

orte z v . Sk o l , 776 F.3d 1046, 1050 (9th C ir. 2015), Abbit ha s not ide ntifie d a c ontra c tua l provision tha t ING bre a c he d. The c ontra c t gove rning his Fixe d Inde x Annuity (“ FIA” ) did not gua

ran te e that the FIA would have a “ true va lue ” or “ fa i r va lue ” during thelife of the annuity . The te rm s c onc e rning the annuity ’ s gua ran te e d va l ue only prom ise d tha t Abbit would
e ve ntua lly

re c e ive a c e rta in m inim

um am ount, 1 e ithe r in a

surre nde r paym e nt or in
a se rie s of a

nnuity pa ym e nts. Abbit ha s not shown tha t ING fa ile d

to pa y him or any othe r c la ss m e m

be r tha t m inim um am ount. Nor did the FIA c ontra c t

sta te tha t Abbit would e a

rn inte re st tha

t wa s “ ba se d on” the pe rform a

n c e of the S& P 500. Inste a d, the c ontra c t inform e d Abbit tha t he
c ould e arn inte re st by

pa rtic i pating in diffe re n t “ strate gie s.” It a lso prom ise d tha t e a c h stra t e g y would c re dit Abbit with inte re st a t a ra te de te rm i ne d by

the form ula

1 As re quire d

by Se c tion 5.8 of the FIA c ontra c t , tha t m inim um am ount is e quiva le nt to them inim

um am ount re quire d by C a lifornia la w. Se e C a l . Ins. C ode §§ 10168.25(b)–(c ), 10168.3, 10168.4. 2outline d in the c ontra c t. As thedistric t c ourt re c o gniz e d, Abbit ha s not shown tha t ING fa i le d to a

bide by the c a lc ulations outline d in thoseform ula s. In sum , Abbit ha s fa ile d to ide ntify any provision of the FIA c ontra c t tha t ING bre a c he d. W e the re fore c onc lude that ING is e ntitle d to sum m ary judgm e nt on Abbit’ s bre a c h of c ontra c t c la im s. B e c a use ING honore d

its c ontra c tua l obliga tions, wea lso a ffirm t

he distric t c ourt’ s e ntry

of sum m ary judgm e nt on Abbit’ s e lde r a

buse c la im s. S

e e Ste ble y v . Litton Loan Serv ic ing, LLP , 202 C a l. App. 4th 522, 528 (2011) (dism issing e lde r a

buse c la im s be c a

use “ [a ] c om

m e rc ia l le nde r . . . m ay

prope rly a sse rt its c ontra c tua l rights” ). 2. Abbit a lso a

rgue s tha t ING bre a c he d C a lifornia ’ s duty of good fa ith a

nd fa ir de a ling by se tting the“ Partic ipation R ate s” and “ C a ps” tha t lim ite d the inte re st tha

t he c o uld e arn at a

n unfa irly low le ve l. Howe v e r, unde r C a lifornia la w, the duty of good fa ith a

nd fa ir de a ling c annot “

prohibit a pa rty from doing tha t whic h is
e xpre s sly pe rm itte d by an a g re e m e nt.” C arma De v e lope rs (C

al.), Inc . v . Marathon De v . C al., Inc
. , 826 P.2d 710, 728–30 (C a l. 1992). The FIA c ontra c t e xpre ssly pe rm itte d ING to se t the Partic ipation R ate s a nd C a ps a t a ny le ve l within a

c e rta in
range . The lowe r bound of tha t ra nge wa s z e ro. The re is no dispute tha t ING
a lwa y s se t the ra te s a

nd c a ps a bove z e ro. B e c a

use the ra t e s se t by

ING we re

3e xpre s sly

pe rm itte d by the FIA c ontra c t, ING did not viola te the duty

of good fa ith
and fa ir de a ling. Se e Guz v
. Be c hte l N at’l Inc
. , 8 P.3d 1089, 1110–12 (C a l. 2000). 3. ING is a lso e n title d to sum m ary judgm e nt on Abbit’ s c la im s ba se d on C a lifornia ’ s se c uritie s la

ws. Unde r C a lifornia

la w, a nnuitie s do not qualify

a s se c uritie s. C a l. C orp. C ode § 25019. B e c a use the FIAs atte m

pte d to (a n d did)
c om ply with C a lifornia ’ s la

ws re gula ting a nnuitie s, se e C a l. Ins. C ode § 10168.25(b)–(c ), the y

we re annuitie s . C a lifornia ’ s se c uritie s la ws do not a

pply
. C a l. C orp. C ode § 25019. 4. W e a lso a ffirm

the distric t c ourt’ s orde rs gra nting ING sum

m ary judgm e nt on Abbit’ s c la im s unde r C a l ifornia ’ s Unfa i r C om p e tition La

w (“ UC L” ), C a l. B us. & Prof. C ode § 17200, e t. se q . Abbit a tte m pte d to show tha

t ING viola

t e d the UC L by “ borrowing” viola

tions of other C a lifornia

la ws, se e C habne r v . Unite d of Omaha Life

Ins. C o. , 225 F.3d 1042, 1048 (9th C ir. 2000), m ost nota bly Insura nc e C ode Se c tion 10168.25(e ). Se c tion 10168.25(e ) re quire d ING to se t the Partic i pation R a te s a

nd C a ps a t a le ve l tha t e nsure d tha

t e a c h “ s trate gy ” inc lude d in the FIA c ontra c t

offe re d c o nsum e rs a

m inim um m arke t va lue
. The pa rtie s propose c om

p e ting m e a sure s of the strate gie s ’ m a rke t va lue
. Se c tion 10168.25(e ) e m

p owe rs the C a lifornia

Insura nc e C om m issione r with de te rm i ning them arke t va l ue of the se strate g ie s. ING he dge d by purc ha sing c a ll
4options tha

t we re inte nde d to pe rfe c tly re fle c t the inte re st tha

t c o nsum e rs c ould
e arn from e a c h stra t e gy . B e c a

use the m arke t va lue of those options should ha ve be e n e q ua l to theva lue of the strate gie s the m se l ve s, ING a ssure d the C a lifornia Insura nc e C om m issione r that it would c om p ly with Se c tion 10168.25(e ) by
e nsuring tha

t the am o unt it spe nt on c a ll options would e qua l the m inim um m arke t va lue re quire d by the sta

tute . At the sum

m ary judgm e n t sta ge , ING subm i tte d
e vide nc e showing tha

t it did just tha

t. In re sponse , Abbit re lie d on a n e xpe rt who offe re d a the ore tic a l m e a sure of m arke t va lue ba se d on a c a de m ic studie s. W e c onc lude tha

t Abbit’ s e xpe rt did not c re ate a ge n uine issue of m ate ria l fa c t on this issue
. 2 Se c tion 10168.25(e ) c le arly c onte m plate s tha t the C a lifornia Insura nc e C om m issione r will de te rm ine how to m e a sure m a rke t va lue . He re , the Insura nc e C om m issione r a c c e pte d ING’ s a pproa c h tha

t use d the va lue of the c a ll options to c a lc ulate the strat e gie s’ m arke t va lue . Abbit c a nnot c re ate a

ge nuine issue of m a te ria l fa c t by re ly ing on a n e xpe rt re port tha

t use d a n e ntire ly diffe re nt
m e a sure of va lue
.

2 W e a lso notetha

t Abbit subm

itte d this e xpe rt re port we ll a fte r the distric t c ourt gra nte d ING’ s m o t ion for sum m ary judgm e nt on his c la ss c la im s. As a re sult, it c annot pre c lude the e ntry of sum m ary judgm e nt on thec la s s c la im s . Se e Hopk i ns v . Anday a , 958 F.2d 881, 887 n.5 (9th C i r. 1992), ov e rrule d on othe r grounds as state

d in Fe de r

man v . C ty . of K e rn , 61 F. App’ x 438, 440 (9th C ir. 2003). 5Thus, Se c tion 10168.25(e ) c annot support Abbit’ s UC L c la im s. As the

distric t c o urt re c o gniz e d, Abbit fa ile d to e sta blish a viola t ion of a ny othe r statute . W e the re fore a ffirm

the distric t c ourt’ s e ntry

of sum m ary judgm e nt on Abbit’ s UC L c la i m s. AFFIRM E D.

6