Borders v. Great Falls Yosemite Ins. Co.

• Decision Date: 28 July 1977
• Citation: 72 Cal.App.3d 86,140 Cal.Rptr. 33
• Parties: Alfred BORDERS, Plaintiff and Appellant, v. GREAT FALLS YOSEMITE INSURANCE COMPANY, Defendant and Respondent. Civ. 49444.
• Court: California Court of Appeals

Page 33

140 Cal.Rptr. 33

72 Cal.App.3d 86

Alfred BORDERS, Plaintiff and Appellant, v. GREAT FALLS YOSEMITE INSURANCE COMPANY, Defendant and Respondent.

Civ. 49444.

Court of Appeal, Second District, Division 3, California.

July 28, 1977.

Hearing Denied Sept. 22, 1977.

Cohen & Steinbrecher and Leonard Sacks, Encino, for plaintiff and appellant.

Revere, Citron & Wallace, Joel F. Citron and Frank Revere, Los Angeles, for defendant and respondent.

POTTER, Associate Justice.

This is an appeal by plaintiff Alfred Borders from a judgment declaring that a policy of automobile liability insurance purchased by plaintiff from defendant Great Falls Yosemite Insurance Company did not provide uninsured motorist coverage in respect of an accident occurring on June 20, 1973. The matter was submitted to the court upon stipulated facts. Since such stipulation is short, we quote it verbatim:

'The Plaintiff is ALFRED BORDERS. ALFRED BORDERS purchased a policy of liability insurance from GREAT FALLS INSURANCE COMPANY, Policy No. GCM 168601 for a policy period from June 20, 1972, to June 20, 1973. The normal expiration date of said policy would be 12:01 a.m.

'That ALFRED BORDERS signed a Waiver of Uninsured Motorist Coverage at the time he purchased his policy of insurance. That there is no dispute as to the validity of the Waiver or the policy.

'At approximately 9:00 a.m., June 20, 1973, ALFRED BORDERS was involved in an auto vs. motorcycle collision with an uninsured motorist. That said accident occurred approximately nine hours after the natural expiration period of said policy.

'That the natural expiration period of said policy was 12:01 a.m., June 20, 1973. On May 8, 1973, the Defendant gave notice of intention not to renew said policy to the legal owner thereof, HOUSEHOLD FINANCE CORPORATION. That the Defendant failed to give proper notice of their intention not to renew said policy to ALFRED BORDERS, in the manner set forth by the Insurance Code.

'That on January 15, 1974, GREAT FALLS INSURANCE COMPANY, gave proper notice under the Insurance Code to ALFRED BORDERS of their intention not to renew Policy No. GCM 168601, effective January 27, 1974.'

The trial court made findings of fact in accordance with the stipulation, and from these facts the court concluded that upon the failure of defendant to give proper notice of nonrenewal, 'the term of the subject policy, No. GCM 168601, was extended, however, said extended policy likewise failed to contain uninsured motorist coverage due to the express waiver of the Plaintiff, ALFRED BORDERS.'

At the time the policy was purchased and at the time of the loss, Insurance Code section 11580.2, ¹ subdivision (a), required all liability insurance policies issued or delivered in this state to contain an uninsured motorist provision but permitted deletion by agreement in writing as follows:

'The insurer and any named insured, prior to or subsequent to the issuance or renewal of a policy, may, by agreement in writing, delete the provision covering damage caused by an uninsured motor vehicle (1) completely, or (2) with respect to a natural person or persons designated by name when operating a motor vehicle. Either of such deletions by any named insured shall be binding upon every insured to whom such policy or endorsement provisions apply while such policy is in force, and shall continue to be so binding with respect to any continuation, renewal, or replacement of such policy by the named insured, or with respect to reinstatement of such policy within 30 days of any lapse thereof. . . .'

The above quoted language was added in 1971. Prior to that time, the pertinent portion of subdivision (a) read simply:

'The insurer and any named insured, prior to or subsequent to the issuance or renewal of a policy, may, by agreement in writing, delete the provision covering damage caused by an uninsured motor vehicle. Such deletion by any named insured shall be binding upon every insured to whom such policy or endorsement provisions apply.'

There is no legislative history of the 1971 amendment except the prior decisional law and the successive forms of Assembly Bill No. 2499 (the amending statute) prior to its adoption. In 1969 in Modglin v. State Farm Mut. Automobile Ins. Co., 273 Cal.App.2d 693, 700, 78 Cal.Rptr. 355, it was held that the renewal of a policy originally issued in Arizona to residents of that state whose cars were used therein after both the insured and the vehicles were brought to California constituted 'issuance' or 'delivery' of a policy within the meaning of Insurance Code section 11580.2, making obligatory uninsured motorist coverage. Arizona had no uninsured motorist coverage requirement, and there was no waiver.

Two trial court decisions subsequent to Modglin dealt with the problem of renewal of policies originally issued in California with an express waiver and reached opposite results as to the continued effect of the waiver depending upon the intent of the insured. (See Robinson v. State Farm Mut. Auto. Ins. Co., 23 Cal.App.3d 953, 100 Cal.Rptr. 565, and LeClair v. Allstate Ins. Co., 28 Cal.App.3d 185, 103 Cal.Rptr. 35, in which these trial court decisions were affirmed.) ²

The apparent purpose of Assembly Bill No. 2499 was to avoid the effect of Modglin insofar as it might be construed as requiring the execution of a new waiver every time the policy was renewed, and to avoid the uncertainty inherent in having the effect of renewal depend upon the subjective intent of the insured. The first form of the bill permitted valid written waivers to be continued in effect under limited circumstances. The condition stated was:

'In any case where the insurer and the named insured have agreed to such deletion, the insurer shall, with each premium renewal notice sent to a named insured, enclose a statement to the named insured notifying him that the policy shall continue to exclude uninsured motorist coverage unless the named insured notifies the insurer within a reasonable time that he desires such coverage to be included in the policy. . . .' (Emphasis in original.)

Before adoption, however, the above quoted language was deleted and in its place the present language was substituted. This eliminated any requirement that the insured's attention be drawn to the continued exclusion and made valid waivers executed by 'any named insured' applicable 'with respect to any continuation, renewal, or replacement of such policy by the named insured . . ..'

Section 11580.2 was further amended by subsequent legislation which was placed in effect after plaintiff purchased the policy herein but prior to the renewal and loss. Effective January 1, 1973, subdivision (a) was amended to make the existing text paragraph (1) and to add a paragraph (2) as follows:

'(2) The agreement specified in paragraph (1) shall be in the following form:

'The California Insurance Code requires an insurer to provide uninsured motorists coverage in each bodily injury liability insurance policy it issues covering liability arising out of the ownership, maintenance, or use of a motor vehicle. Such section also permits the insurer and the applicant to delete such coverage completely or with respect to one or more natural persons designated by name when operating a motor vehicle. Uninsured motorists coverage insures the insured, his heirs, or legal representatives for all sums within the financial responsibility limits which such person or persons are legally entitled to recover as damages for bodily injury, including any resulting sickness, disease, or death, to him from the owner or operator of an uninsured motor vehicle not owned or operated by the insured.'

'Such agreement may contain additional statements not in derogation of or conflict with the foregoing. The execution of such agreement shall relieve the insurer of liability under this section while such agreement remains in effect.'

The statute adopting the amendment, however, contained a saving clause as follows:

'SEC. 3. The amendments to subdivision (a) of Section 11580.2 of the Insurance Code enacted at the 1972 Regular Session shall not affect the validity or binding force of any agreement executed pursuant to such section prior to the effective date of such amendments.' (Stats.1972, ch. 952, § 3, p. 1728.)

The stipulation of facts herein did not include the form of the waiver. However, the findings of fact (proposed by defendant) include as a conclusion of law a statement that the policy 'does, by its terms, contain an express waiver by the Plaintiff, ALFRED BORDERS, of uninsured motorist coverage, both for the policy period from June 20, 1972, to June 20, 1973, and any subsequent periods during which said policy was in effect by operation of law.'

Plaintiff has attached, as an appendix to appellant's brief, a copy of an application for insurance executed by plaintiff containing an 'uninsured motorist waiver' in the following language:

'I, the undersigned Applicant for Insurance, do not want to pay the additional premium for, nor do I desire, uninsured motorist coverage. I agree (1) no present or future policies or endorsements, nor Section 11580.2 of the California Insurance Code nor any other law, shall afford any uninsured motorist coverage insuring me or anyone for any damages I or anyone may be entitled to recover for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle or from anyone else in connection with an uninsured motor vehicle, (2) any provisions for any such coverages, whether express or implied by law or otherwise are hereby deleted from all present and future policies and endorsements.

'These deletions and agreements herein bind me and every insured to whom any policy or endorsement applies, and everyone otherwise qualifying for coverage.

'I HAVE READ AND UNDERSTAND THE FOREGOING WAIVER AND AFFIX MY SIGNATURE HERETO WITH THE FULL KNOWLEDGE THAT I AM WAIVING PROTECTION UNDER UNINSURED MOTORIST...