Court Opinion

ID: 7211161
Source: CourtListenerOpinion
Date Created: 2022-07-24 20:18:02.080419+00
Date Added: 2024-06-11T16:16:50.488655
License: Public Domain

REINHARDT, Circuit Judge,
concurring in part, dissenting in part.
Because I believe that genuine questions of material fact exist as to whether Ya-ghoubian satisfied the eligibility criteria for total disability benefits, I respectfully dissent from the majority’s affirmance of the grant of summary judgment in Northwestern’s favor on the breach of contract claim. First, it is disputed whether Ya-ghoubian was totally unable to perform his “principal duties.” That term is nowhere defined in the policy at issue. The record contains evidence that when Yaghoubian purchased a lifetime disability endorsement from Northwestern, he considered the marketing and client development aspects of his position to be the “principal” duties he performed as the proprietor of Quantech Systems. There also exists evidence demonstrating that before becoming disabled, Yaghoubian spent the bulk of his time engaged in marketing and business development. The majority is correct that Erreca v. Western States Life Insurance Co., 19 Cal.2d 388, 121 P.2d 689, 695-96 (Cal.1942), holds that in order to be “totally disabled” under California law, a policyholder must be unable to perform all of his principal duties. To the extent that Erre-ca sheds any light on how to define what principal duties are, however, it supports Yaghoubian’s position. In Erreca, the policyholder could perform some work-related tasks, but not others, and the court held that “the question of what amounts to total disability is one of fact.” The same is true here.
*96A question of material fact exists with respect to the policy’s second eligibility criterion as well. According to Yaghoubian’s policy, he was ineligible for total disability benefits only if he was “gainfully” employed as of August 22, 1994. California law requires that we interpret each term of the insurance policy in accordance with its ordinary meaning. Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co., 5 Cal.4th 854, 21 Cal.Rptr.2d 691, 855 P.2d 1263 (Cal.1993). “Gainful” is defined as “profitable” or “lucrative.” Random House Dictionary of the English Language (1979). Yaghoubian’s business failed to generate any income for him between the years 1994 and 1999, although it did reimburse him for a number of significant expenses. Although Yaghoubian was indeed employed by Quantech during the years in question, a reasonable jury could conclude that the reimbursement of business-related expenses did not render Yaghoubian gainfully employed. Accordingly, in my view, the district court’s grant of summary judgment for Northwestern on the question of coverage was improper, and I dissent from the affirmance of that decision.
I agree with the majority that summary judgment was proper with respect to Ya-ghoubian’s fraud, emotional distress, punitive damages, and bad faith claims.