United States District Court, C.D. California, Southern Division
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT 
DAVID O. CARTER, District Judge.
Before the Court is Defendant's Motion for Summary Judgment, or, in the alternative, Partial Summary Judgment (Dkt. 38). The Court held a hearing on this matter on March 2, 2015. Having considered the parties' respective briefing and oral arguments, the Court GRANTS Defendant's motion.
Dharmista Bhakta ("Mrs. Bhakta") applied for and purchased a term life insurance policy from the Defendant Hartford Life and Annuity Insurance Company ("Hartford" or "Defendant"), issued on January 10, 2013. On February 25, 2013, less than two months after the policy was issued, Mrs. Bhakta died at forty-one years old. Hartford, after investigating Mrs. Bhakta's death and learning of her history of alcohol abuse, rescinded the insurance policy on the basis of material misrepresentation in Mrs. Bhakta's policy application. Mrs. Bhakta's husband, Mr. Bipin Bhakta ("Mr. Bhakta"), the beneficiary under the policy, brought this suit for breach of contract to collect the money allegedly owed under the Policy.
A. Insurance Application
Mrs. Bhakta applied to Hartford for a term life insurance policy through a broker, Paul Talley ("Mr. Talley") on December 12. SUF 1. As part of the application process, a telephonic interview was conducted with Mrs. Bhakta about her medical history. SUF 3. During the interview, Mrs. Bhakta revealed that she had been treated for mild depression in April 2011, and had been prescribed Ambien for a few months thereafter. Podgurski Decl. Ex. H, Bhakta Application Tele-Interview ("Interview") at 13:13-17:17. In the form, the interviewer noted Mrs. Bhakta currently suffered from "mild" depression, and noted in the comments that Mrs. Bhakta was currently suffering from no symptoms and was receiving no treatment. Id., Tully Decl. Ex. G at Hartford_000092-94. Mrs. Bhakta also indicated that she had never been advised about, counseled or treated for the excessive use of alcoholic beverages. Id. at 92. She also responded no to the question of whether she had ever been treated for, or had treatment recommended for, ulcer, hernia, colitis, intestinal bleeding, diverticulitis, ulcerative colitis, Crohn's disease, hepatitis, or any other disease, condition, or disorder of the stomach, intestines, esophagus, gallbladder, liver, or pancreas. Id. Mrs. Bhakta also stated that she consumed "one glass [of alcohol] every two weeks" and had a drink "weekly." Interview at 21:7-24. To complete the application, Mrs. Bhakta went through a paramedical exam, which included taking her height, weight, pulse and blood pressure, as well as collecting blood and urine samples for laboratory analysis. SUF 13. Most of her lab results were in normal range. SUF 14. However, she had an ALT level of 53, where the high normal was 45, and an HDL level of 83, where a high normal was 80. The abnormal results did not disqualify Mrs. Bhakta from the "Preferred Best" classification. SUF 15. As part of the application, Mrs. Bhakta signed a release for her medical records, but Hartford did not order or review her records prior to issuing the policy. On January 17, 2013, she confirmed the representations made in her application when she accepted the "Preferred Best" Policy. SUF 25-27.
B. Underwriting Guidelines
Hartford uses underwriting guidelines for assessing insurance applicants for mood disorders and alcohol abuse. The Mood Disorder guidelines instruct that a:
thorough assessment is suggested before allowing preferred consideration which includes no treatment or medication for mood symptoms in the last 5 years.... When evaluating a mood disorder, the underwriter is to consider unfavorable' features of the applicant's depression risk such as marital or family disharmony, alcohol abuse, short duration since diagnosis, history of lost work, and behavior disturbance....
Podgurski Dec., Ex. G, Mood Disorders Pamphlet, Hartford_894-902.
The Alcohol Abuse underwriting guidelines state that "alcoholics almost always deny the extent of their drinking problem, " and that "underwriter should investigate the possibility of alcohol abuse and develop information about the applicant's drinking habits" Podgurski Decl., Ex. G, Hartford_336, 344. The guidelines include 40 factors the underwriter should consider in investigating the possibility of alcohol abuse. Id. at 337-338.
After Mrs. Bhakta passed away on February 25, 2013, Hartford conducted an investigation into her medical history. They uncovered material indicating that Mrs. Bhakta's representations on her application were false. First, Hartford learned Mrs. Bhakta has been diagnosed with and treated for ulcerative colitis since 2003; second, that she had been diagnosed with alcohol dependence and liver disease and had apparently been counseled for these conditions since April 2010; third, that she had been referred to a hematologist to treat her liver disease in July 2010; and finally, that she had been seen by her PCP for a "follow up" appointment regarding liver disease on January 7, 2012, only ten days before signing the Policy. Memo. (Dkt 40) at 13, SUF 38-40. Hartford rescinded the policy on the basis of material misrepresentations contained in the application.
Plaintiff then sued for breach of contract and breach of the implied covenant of good faith and fair dealing. Compl. (Dkt. 1-1). Hartford now moves for summary judgment as to all claims, arguing that Mrs. Bhakta's misrepresentations regarding her history with alcohol dependence, liver disease, and colitis were all material as a matter of law. ...