Sheryl Clark v. Transamerica Life Insurance Company

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SHERYL CLARK,
Plaintiff-Appellant,
v.
TRANSAMERICA LIFE INSURANCE
COMPANY,
Defendant-Appellee.
No. 20-16756
D.C. No.
2:20-cv-00539-JAM-DB
MEMORANDUM*
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Argued and Submitted April 19, 2023
San Francisco, California
Before: VANDYKE and SANCHEZ, Circuit Judges, and LASNIK, ** District
Judge.
Sheryl Clark (“Clark”) appeals the district court’s dismissal of her complaint
for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and its
denial of her motion for leave to amend her complaint. We have jurisdiction under
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.
FILED
APR 28 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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28 U.S.C. § 1291 and, reviewing de novo, we affirm. Kroessler v. CVS Health
Corp., 977 F.3d 803, 807 (9th Cir. 2020).
For 26 years, Clark’s mother, Delaine Stowell, paid a monthly premium to
the JC Penney Corporation for life insurance coverage. The JC Penney Life
Insurance Company—now, the Transamerica Life Insurance Company—issued
and delivered the policy to the JC Penney Corporation in Illinois (the “Policy”).
Stowell received a certificate of insurance, as required under the Policy, which
identified her as the “insured” and the JC Penney Corporation as the
“policyholder” (the “Certificate”). In 2018, Stowell missed a payment and shortly
thereafter passed away. After Transamerica initially denied Clark’s claim for
benefits, she filed a class action complaint, alleging violations of Cal. Ins. Code
§§ 10113.71 and 10113.72, which require, among other things, a 60-day grace
period and notice before the termination of an insurance policy issued or delivered
in California for nonpayment of a premium.
The district court did not err in dismissing Clark’s complaint. The
California statutes only apply to policies issued or delivered in California. See Cal.
Ins. Code §§ 10113.71, 10113.72. There is no dispute that the Policy was issued
and delivered in Illinois and the Certificate was delivered in California. The sole
question is whether the Certificate is part of the Policy or merely reflects evidence
of insurance.

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Under federal and California precedent, a certificate is part of a policy— i.e.,
the contract of insurance—when it contains terms and conditions that differ from
the master policy. See, e.g., John Hancock Mut. Life Ins. Co. v. Dorman, 108 F.2d
220, 221–23 (9th Cir. 1939) (holding that a certificate is part of the insurance when
the policy requires the issuance of the certificate, and the terms of the certificate
are broader than those in the policy); Humphrey v. Equitable Life Assur. Soc. of
Am., 67 Cal. 2d 527, 534 (1967) (holding that “the terms of the certificate are
binding on the insurer” for group employer insurance where there is conflict or
ambiguity between a certificate and the group master policy (citing Dorman, 108
F.2d at 222)). This precedent is consistent with the California Insurance Code,
under which a certificate that does not “amend, extend or alter the coverage
afforded by” an insurance policy is only “evidence of insurance.” Cal. Ins. Code
§ 384; cf. Cal. Ins. Code § 380.
Here, the Certificate is not part of the Policy because the Certificate, on its
face, does not alter or add to substantive terms of the Policy. See Boseman v.
Conn. Gen. Life Ins. Co., 301 U.S. 196, 203–04 (1937) (holding that a certificate is
not “necessary to” the insurance when it does “not affect any of the terms of the
policy,” i.e., when the insured’s rights and the insurer’s liabilities “would have
been the same if the policy had not provided for issue of the certificate”). Indeed,
the Certificate issued to Ms. Stowell reflects that it is “not part of the policy but

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evidence of the insurance provided under the policy” and that “[t]he policy and any
attachments are the entire contract of insurance.”1 Because any amendment would
be futile, the district court did not err in denying Clark’s motion for leave to
amend. Kroessler, 977 F.3d at 807.
AFFIRMED.
1 Clark’s remaining statutory and policy arguments fail to persuade because there is
no indication that the California Legislature intended for notice and grace period
requirements to apply to insurance policies not issued or delivered in California.
In light of our conclusion, we do not reach the separate question whether the Policy
is an individual or group policy under Cal. Ins. Code § 10113.72.

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