                                                                              FILED
                           NOT FOR PUBLICATION
                                                                               JUN 14 2018
                    UNITED STATES COURT OF APPEALS                        MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS


                           FOR THE NINTH CIRCUIT


ANNA NOWAK,                                      No.   17-35799

              Plaintiff-Appellant,               D.C. No. 3:17-cv-00086-HRH

 v.
                                                 MEMORANDUM*
GENWORTH LIFE AND ANNUITY
INSURANCE COMPANY,

              Defendant-Appellee.


                   Appeal from the United States District Court
                            for the District of Alaska
                   H. Russel Holland, District Judge, Presiding

                          Submitted June 12, 2018**
                     Anchorage Old Federal Building, Alaska

Before: THOMAS, Chief Judge, and CALLAHAN and BEA, Circuit Judges.

      Anna Nowak appeals the district court’s order granting Appellee Genworth’s

motion to dismiss Nowak’s claims for negligence and breach of the implied



      *
             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).
covenant of good faith and fair dealing, and the district court’s denial of leave to

amend the complaint.

      We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm. We

review a district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6)

de novo. Livid Holdings Ltd. v. Salomon Smith Barney, Inc. 416 F.3d 940, 946

(9th Cir. 2005). A district court’s dismissal of a complaint without leave to amend

is reviewed de novo. Id. We review a district court’s interpretation of substantive

state law de novo. Stanford Ranch, Inc. v. Md. Cas. Co., 89 F.3d 618, 624 (9th Cir.

1996). Because the parties are familiar with the factual and procedural history of

the case, we need not recount it here.

                                           I

      We defer to the district court’s construction of Alaska state law with respect

to an insurer’s duty to notify its insured prior to cancellation of the policy, because,

in the absence of a “clear state court exposition of a controlling principle,” the

district court’s interpretation of Alaska law was not clearly wrong. Takahashi v.

Loomis Armored Car Serv., 625 F.2d 314, 316 (9th Cir. 1980) (reasoning that a

district court’s construction of state law, “particularly where there has been no

clear state court exposition of a controlling principle, will be accepted on review




                                           2
unless shown to be ‘clearly wrong.’”) (quoting Gee v. Tenneco, Inc., 615 F.2d 857,

861 (9th Cir. 1980)).

      The Alaska Supreme Court had not previously decided whether, in the life

insurance context, an insurer must provide actual notice to the insured prior to

cancellation of the policy. In the absence of a controlling decision from the state’s

highest court, the district court relied on the Alaska Supreme Court decision in

Blood v. Kenneth A. Murray Insurance, Inc., 151 P.3d 428 (Alaska 2006), which

considered an insurer’s duty to provide notice in the context of automobile liability

insurance. There, the Alaska Supreme Court held it would not require insurers to

bear the additional burden of providing actual notice to insureds prior to

cancellation of the policy. Id. 433–34. The district court’s reliance on Blood and

its construction of state law was not clearly wrong. Further, it is not disputed that

Genworth mailed written notices to the address provided by the insured to

Genworth as well as an additional address identified by Genworth as possibly

belonging to the insured, which is all the Alaska Supreme Court required of the

insurer in Blood.

                                          II

      The district court did not err in dismissing Nowak’s claims for breach of the

implied covenant of good faith and fair dealing. To state a claim, Alaska law


                                          3
“requires that the insurance company’s refusal to honor a claim be made without a

reasonable basis.” Hillman v. Nationwide Mut. Fire Ins. Co., 855 P.2d 1321, 1324

(Alaska 1993). Genworth had a reasonable basis for denying Nowak’s claim. The

terms of the insurance policy provided that “[i]f a premium has not been paid by

the end of its grace period, this Policy will terminate subject to its terms.” Nowak

does not dispute that the February 2016 premium payment went unpaid through its

grace period. The non-payment of the premium through the grace period gave

Genworth a reasonable basis to deny the claim.

                                          III

      The district court did not err in denying Nowak leave to amend the

complaint. Although leave to amend should be “freely given,” if the proposed

argument would be futile, leave to amend need not be granted. Foman v. Davis,

371 U.S. 178, 182 (1962). “[C]ourts have discretion to deny leave to amend a

complaint for ‘futility,’” which includes the “inevitability of a claim’s defeat on

summary judgment.” Johnson v. American Airlines, Inc., 834 F.2d 721, 724 (9th

Cir. 1987). The district court did not err in reasoning that amendment of the

complaint to allege Genworth breached the covenant of good faith and fair dealing

by failing to apply Automatic Premium Loan option would have been futile. The

application and policy terms provided that if the policy did not have sufficient


                                          4
value to advance a loan, a loan would not be advanced. The policy explained how

to calculate the value of the policy, and indicated that the policy had a zero value.

Because the policy had insufficient value to advance a loan, a loan would not have

been advanced. As such, the district court did not err in denying leave to amend on

the ground that Genworth had a reasonable basis, based on the terms of the

application and policy, for refusing to apply the Automatic Premium Loan option.



      AFFIRMED.




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