FILED

NOT FOR PUBLICATION

MAY 10 2022

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

TRANSAMERICA LIFE INSURANCE No. 21-35093

COMPANY,

D.C. No. 2:19-cv-01536-JLR Plaintiff-Appellee,

v. MEMORANDUM*

ANGELINA D. SLEE; et al.,

Defendants-Appellants.

Appeal from the United States District Court for the Western District of Washington James L. Robart, District Judge, Presiding

Submitted February 9, 2022** Seattle, Washington

Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.

The district court granted summary judgment in favor of Transamerica Life

Insurance Company. The district court adopted the Magistrate Judge’s report and

recommendation, which determined that “the policy language unambiguously

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). requires the insured to be in a nursing home licensed by the state in order to be

entitled to benefits, that [the Slees] failed to prove their [assisted living facilities

(ALFs)] met this requirement, and that Transamerica reasonably exercised its

discretion in determining the ALFs did not ‘substantially comply’ with the policy

definition of ‘nursing home.’” From this determination, the Magistrate Judge

determined that the Slees’s Counterclaims failed as a matter of law. We affirm the

district court’s judgment.

The Slees’s long-term care insurance policies provide that an insured can

qualify for benefits in one of three ways: where treatment is (1) “Medically

Necessary;” (2) required due to a “Cognitive Impairment;” or (3) required

“because of [the insured’s] inability to perform at least 2 of the 6 Activities of

Daily Living.” Once an insured has qualified for benefits, the Policy includes a

“Nursing Home Benefit,” which pays “the actual charges for confinement in a

Nursing Home, up to the Maximum Daily Nursing Home Benefit shown in the

Schedule for each day of a Nursing Home stay.” To “qualify for the Nursing

Home Benefit,” three conditions must be met: “(1) [The insured’s] Physician must

certify that [the insured’s] treatment is Medically Appropriate; and (2) the care or

services must be provided in a Nursing Home; and (3) the charges must be incurred

while th[e] Policy is in force.”

2 Under Washington contract law, if the “terms are defined in a policy, then

the term must be interpreted in accordance with that policy definition,” unless the

policy violates public policy or a statute. Kitsap v. Allstate Ins. Co., 136 Wash. 2d

567, 576 (Wash. 1998) (en banc); see Findlay v. United Pacific Ins. Co., 129

Wash. 2d 368, 379 (Wash. 1996) (en banc) (“We have repeatedly held that an

insurer, as a private contractor, is ordinarily permitted to limit its liability unless to

do so would be inconsistent with public policy. When such public policy exists, it

will ordinarily be found in a regulatory statute.”).

The Slees contend that the policy’s definition of nursing home violates

Washington law, and that Transamerica must adopt the broader definition of

nursing home found in the Washington code. Under their reading, that broader

definition would include the ALFs to which the Slees were admitted. And from

that definition, the rest of the Slees’s arguments flow, i.e., that Transamerica

improperly denied coverage.

Nothing in the contract is inconsistent with Washington law. The policies

expressly define a “nursing home,” among other requirements, as “[a] facility, or

that part of a facility which: is licensed by the state as a nursing home.” The code

distinguishes between nursing homes and ALFs. See Wash. Rev. Code § 18.51 et

seq. (regulating nursing homes); Wash. Rev. Code § 18.20 et seq. (regulating

3 assisted living facilities). Under the Washington code, ALFs are not permitted to

act as nursing homes. See Wash. Rev. Code § 18.20.160 (“No person operating

a[] [licensed ALF] . . . shall admit to or retain in the [ALF] any aged person

requiring nursing or medical care of a type provided by institutions licensed under

chapter[ ] 18.51 [Nursing Homes.]”). Thus, the core of the Slees’s argument—that

the policy’s definition of “nursing home” is contrary to Washington law—is

incorrect.

Because we agree that the district court correctly interpreted the statutes and

the insurance policy, we agree that the Slees’s counterclaims fail as a matter of

law.

The district court’s judgment is affirmed.

AFFIRMED

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