MEMORANDUM ***
In this insurance dispute, Emad Zaki appeals from the district courts grant of summary judgment in favor of Principal Life Insurance Company, rescinding Principals disability insurance contract with Zaki under Ariz. Rev. Stat. (“ARS”) § 20-1109. Reviewing de novo, we affirm. Branch Banking & Tr. Co. v. D.M.S.I., LLC, 871 F.3d 751, 759 (9th Cir. 2017).
1. Arizona law allows an insurer to deny coverage because of a misrepresentation in the insurance application. James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920–21 (9th Cir. 2008) (citing ARS § 20-1109). Principal sought to rescind Zakis disability insurance because of misrepresentations in his application form. Zaki countered that two “agents” of Principal, Bishara Bahbah and Steve Moore, filled out his application form and so Principal was responsible for any omissions or errors. We hold that ARS § 20-1109 is met because Bahbah and Moore were not agents of Principal and, therefore, misstatements in Zakis application are not attributable to the insurance company.
Agency may be based on either actual or ostensible authority. Ruesga v. Kindred Nursing Centers, L.L.C., 215 Ariz. 589, 597, 161 P.3d 1253 (2007). Here, Bahbah and Moore obtained actual authority from Principal only for the limited purpose of facilitating the submission of insurance applications. But under Arizona law, this makes Bahbah and Moore mere “soliciting agents,” and mistakes in an insurance application resulting from a soliciting agent are not attributable to the insurer. See Smith v. Republic Natl Life Ins. Co., 107 Ariz. 112, 116 n.3, 483 P.2d 527 (1971); see also Curran v. Indus. Commn of Ariz., 156 Ariz. 434, 436, 752 P.2d 523 (1988) (“Insurance agents differ from independent agents or brokers. The former are authorized representatives of the insurer; the latter are middlemen representing the insured. For this reason, the acts of the insurance agent, but not those of the independent agent or broker, are imputable to the insurer.”).
Nor did Bahbah and Moore have ostensible authority. Such authority is present when “the principal knowingly or negligently holds his agent out as possessing” authority or (2) “permits [the claimant] to assume” the putative agent possesses such authority. Reed v. Gershweir, 160 Ariz. 203, 205, 772 P.2d 26 (1989). Zaki has not pointed to any act which suggests that Principal had held out Bahbah and Moore as its agents to him. See id. (“Apparent authority can never be derived from the acts of the agent alone.”). The undisputed evidence showed that Principal did not train Bahbah and Moore directly, provide them with office space or supplies, or control their work. Accordingly, any “fraudulent” statement in Zakis application is not chargeable to Principal. ARS § 20-1109(1).
2. The materiality and reliance prongs of § 20-1109 are also met. See ARS § 20-1109(2)–(3). Materiality is met when “the facts, if truly stated, might have influenced a reasonable insurer in deciding whether to accept or reject the risk.” Cent. Natl Life Ins. Co. v. Peterson, 23 Ariz. App. 4, 7, 529 P.2d 1213 (1975). Reliance is established if the company shows that it “in good faith would either not have issued the policy, or would not have issued a policy in as large an amount.” ARS § 20-1109(3).
These prongs are met because Principals underwriting guidelines establish a $25,000 per month maximum issue and participation limit for disability insurance. It is undisputed that the omissions or misstatements in Zakis application went toward other disability benefits he would receive. Indeed, Principal specifically stated in its letter to Zaki that it would not have approved his application had it known of his other in-place policies. Because Zaki has not proffered evidence to rebut Principals evidence that the underwriting guidelines were material and relied upon to cause the companys rescission, no genuine issue of fact exists as to the elements of materiality and reliance. See Valley Farms, Ltd. v. Transcon. Ins. Co., 206 Ariz. 349, 354, 78 P.3d 1070 (2003) (failure to disclose information was material because defendant did not dispute plaintiffs statement that the information was material).
3. Zakis argument on appeal regarding his breach of contract claim relies on his contention that the errors in his application are attributable to Principal through Bahbah and Moore. Because, as we explained above, Bahbah and Moore were not Principals agents, Zakis breach of contract claim fails, also.
Zakis bad faith claim fails, too, because it requires him to show that Principal (1) “acted unreasonably” and (2) that Principal knew “that it was acting unreasonably or acted with such reckless disregard that such knowledge may be imputed to it.” Trus Joist Corp. v. Safeco Ins. Co. of Am., 153 Ariz. 95, 104, 735 P.2d 125 (1986). As explained above, Principal is entitled to recission of Zakis disability insurance contract. To be in bad faith in the performance of a contract there must be a valid contract. This contract was properly rescinded. Thus, Principal did not act unreasonably by refusing to perform that same contract. Noble v. Natl Am. Life Ins. Co., 128 Ariz. 188, 190, 624 P.2d 866 (1981) (“To show a claim for bad faith, a plaintiff must show the absence of a reasonable basis for denying benefits of the policy[.]”) (simplified).
4. We do not reach Zakis arguments regarding which states law governs this dispute because generally “we will not consider arguments that are raised for the first time on appeal.” Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999). Zakis motion for an indicative ruling in the district court is not on review before the court. Thus, in this appeal, Zaki cannot raise the issues raised in that motion. See TAAG Linhas Aereas de Angola v. Transamerica Airlines, Inc., 915 F.2d 1351, 1354 (9th Cir. 1990).
AFFIRMED.