NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS DEC 21 2020

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

ARIFF GULAMANI; SHAIROSE No. 20-35312 GULAMANI, husband and wife, D.C. No. 2:19-cv-01475-TSZ Plaintiffs-Appellants,

v. MEMORANDUM*

UNITRIN AUTO AND HOME

INSURANCE COMPANY, a Washington licenses motor vehicle insurer,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington Thomas S. Zilly, District Judge, Presiding

Argued and Submitted December 8, 2020 Seattle, Washington

Before: BERZON, MILLER, and BRESS, Circuit Judges.

Ariff and Shairose Gulamani appeal from the district court’s order granting

summary judgment to Unitrin Auto and Home Insurance Company on their claim

that Unitrin wrongly denied underinsured motorist (UIM) benefits for injuries Ariff

Gulamani sustained in a 2013 car accident. The district court held that res judicata

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. barred the Gulamanis’ claim because it could have been raised in a previous

lawsuit in which Ariff Gulamani sought personal injury protection (PIP) benefits

from Unitrin for injuries he sustained in the same car accident. The district court

also held that the Gulamanis were not “legally entitled to recover damages” under

the policy because the statute of limitations had expired on their claim against the

underinsured motorist. See Wash. Rev. Code § 48.22.030(2). Reviewing the

district court’s grant of summary judgment de novo, L.F. v. Lake Wash. Sch. Dist.

#414, 947 F.3d 621, 625 (9th Cir. 2020), we affirm on the ground that res judicata

bars the Gulamanis’ present claims, and so do not consider whether the Gulamanis

were “legally entitled to recover damages.”

Because a Washington court adjudicated the claims in the prior litigation,

Washington law determines the preclusive effect of that court’s judgment.

Manufactured Home Cmtys. Inc. v. City of San Jose, 420 F.3d 1022, 1031 (9th Cir.

2005). “Filing two separate lawsuits based on the same event—claim splitting—is

precluded in Washington.” Ensley v. Pitcher, 222 P.3d 99, 102 (Wash. Ct. App.

2009) (quoting Landry v. Luscher, 976 P.2d 1274, 1276 (Wash. Ct. App. 1999)).

Res judicata bars a party from litigating a matter that “could have been raised, and

in the exercise of reasonable diligence should have been raised, in the prior

proceeding.” Kelly-Hansen v. Kelly-Hansen, 941 P.2d 1108, 1112 (Wash. Ct. App.

1997); see also Norris v. Norris, 622 P.2d 816, 820 (Wash. 1980). To determine

2 whether a claim should have been raised in a prior proceeding, Washington courts

look to whether the claim arises from the same “transaction, or series of connected

transactions, out of which the [prior] action arose.” Sound Built Homes, Inc. v.

Windermere Real Estate/S., Inc., 72 P.3d 788, 794 (Wash. Ct. App. 2003) (quoting

Restatement (Second) of Judgments § 24(1) (1982)). Washington courts consider

“whether the present and prior proceedings arise out of the same facts, whether

they involve substantially the same evidence, and whether rights or interests

established in the first proceeding would be destroyed or impaired by completing

the second proceeding.” Kelly-Hansen, 941 P.2d at 1113.

Both Ariff Gulamani’s previous claims against Unitrin regarding PIP

coverage and the Gulamanis’ current claims against Unitrin regarding UIM

coverage stem from the same event—the 2013 car accident. Both claims involve

similar issues and substantially the same documents. Thus, Ariff Gulamani’s

claims in the prior litigation preclude the claims in the current suit. See Chukri v.

Stalfort, 403 P.3d 929, 933 (Wash. Ct. App. 2017).

The Gulamanis argue that res judicata applies only to the issues actually

litigated in the prior case—not the issues that should have been litigated—because

Unitrin initiated that case by filing a declaratory judgment action. They rely on the

Restatement (Second) of Judgments § 33, which states that a declaratory judgment

action is only “conclusive in a subsequent action . . . as to the matters declared, and

3 . . . as to any issues actually litigated.” Washington has not yet adopted the

Restatement approach on this issue. See Coates v. City of Tacoma, 457 P.3d 1160,

1176 (Wash. Ct. App. 2019) (Fearing, J., dissenting).

But even if we were to assume that Washington would adopt the

Restatement rule, that rule does not apply to this case. A defendant who brings a

counterclaim becomes “a plaintiff as far as the counterclaim is concerned” for

purposes of res judicata. Restatement (Second) of Judgments § 21 cmt. a. While

Unitrin initially sought narrow declaratory relief to determine whether an insured

could request to have an independent medical examination recorded by counsel,

Ariff Gulamani brought three affirmative counterclaims, for damages, on grounds

that far exceeded the scope of that initial issue. The Gulamanis have identified no

authority suggesting that any State would decline to apply res judicata in these

circumstances. Because Ariff Gulamani’s counterclaims must be granted their full

preclusive effect, res judicata bars the Gulamanis’ current suit.

For the first time at oral argument, the Gulamanis contended that they could

not have brought the UIM claims in the prior litigation because the claims had not

yet accrued, as the Gulamanis had not filed a claim for UIM benefits with Unitrin

and been denied coverage. While the Gulamanis likely could have filed a claim

with Unitrin and generated a rejection through the “exercis[e] [of] reasonable

diligence,” Sanwick v. Puget Sound Title Ins. Co., 423 P.2d 624, 627 (Wash. 1967)

4 (quoting Sayward v. Thayer, 36 P. 966, 966 (Wash. 1894)), we need not consider

the question further, because the Gulamanis forfeited this theory by failing to raise

it earlier, Harger v. Department of Labor, 569 F.3d 898, 904 n.9 (9th Cir. 2009);

see also Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (“This court will

not ordinarily consider matters on appeal that are not specifically and distinctly

raised and argued in appellant’s opening brief.”) (quotations omitted).

Because we resolve this case on the basis of res judicata, the Gulamanis’

motion to take judicial notice of documents relevant to other issues (Dkt. No. 36) is

DENIED.

AFFIRMED.

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