SYCKS, ET AL. V. TRANSAMERICA LIFE INSURANCE COMPANY, ET AL.

Holding: The Ninth Circuit reversed the grant of summary judgment on claims for declaratory relief and breach of contract, and remanded the case for further proceedings on claims for breach of the implied covenant of good faith and fair dealing and negligent misrepresentation.
Standard: Objective reasonable expectations of the insured
Vote: Unpublished memorandum disposition by a three-judge panel.
Practical effect: The case is remanded to the district court for further proceedings on the claims for breach of the implied covenant of good faith and fair dealing and negligent misrepresentation, as the lower court's contract interpretation was found to be erroneous.

SYCKS, ET AL. V. TRANSAMERICA LIFE INSURANCE COMPANY, ET AL.

June 2, 2026 ·3:22-cv-00010-SLG ·Unpublished · By Aisha Johnson

The Ninth Circuit reversed a district court's grant of summary judgment in a dispute over life insurance policy premiums. The appellate court held that the policy language was ambiguous and must be construed in favor of the insureds under Alaska law.

Background

Plaintiffs, acting as personal representatives for the estates of Lila and Vernon Sycks, appealed a district court ruling that granted summary judgment to Transamerica Life Insurance Company. The district court had dismissed claims for declaratory relief, breach of contract, breach of the implied covenant of good faith and fair dealing, and negligent misrepresentation.

The court’s reasoning

The court applied Alaska law, which requires insurance policies to be interpreted to vindicate the objectively reasonable expectations of applicants. The policy’s reference to a Maximum Total Premium of fifty thousand dollars and the insurance application’s indication of a single payment created a reasonable expectation that only the initial payment was required. The court found that the conflicting Grace Period provision was buried in complex definitions and did not negate the insureds’ reasonable expectations. Because the policy was ambiguous, the court construed it in favor of the insureds, distinguishing prior case law where a single misleading term was taken out of context.

What it means going forward

The case is remanded to the district court for further proceedings on the claims for breach of the implied covenant of good faith and fair dealing and negligent misrepresentation, as the lower court’s contract interpretation was found to be erroneous.