Bunner v. Imperial Ins. Co.
Decision Date | 15 May 1986 |
Court | California Court of Appeals Court of Appeals |
Parties | Bruce BUNNER, as Insurance Commissioner of the State of California, Petitioner and Appellant, v. IMPERIAL INSURANCE COMPANY, et al., Respondents. Dr. Ronald J. Rooney, Claimant and Respondent, CALIFORNIA INSURANCE GUARANTEE ASSOCIATION, Real Party in Interest and Appellant. B009064. |
John K. Van de Kamp, Edmond B. Mamer and Marla K. Markman, Deputy Attys. Gen., for petitioner and appellant.
Greenberg, Glusker, Fields, Claman & Machtinger, and Robert S. Chapman, Los Angeles, for claimant and respondent.
Clausen, Harris & Campbell, Marie D. Clause and Gregory P. Orland, Los Angeles, for real party in interest and appellant.
This is an appeal from an order of the superior court requiring appellants Insurance Commissioner of the State of California (Commissioner) and California Insurance Guarantee Association (CIGA) to allow respondent, Dr. Ronald J. Rooney, to file a late claim with the Commissioner against the estate of Rooney's insolvent insurer, Imperial Insurance Company (Imperial). The trial court allowed the late claim to be filed because the notice of the insolvency and claims filing period mailed to Rooney by the Commissioner to the address shown on Rooney's policy was never received due to Rooney's change of address. Appellants contend that the filing of the late claim should not have been allowed because (1) the Commissioner complied with statutory (Ins.Code, § 1063.7) and due process notice requirements by mailing the notice to Rooney's last known address; and (2) the superior court lacked jurisdiction to extend the six month statutory claims filing period. We shall conclude that receipt of notice is required under Insurance Code, Section 1063.7, that the trial court's finding that notice was not received is supported by substantial evidence, and that the superior court had jurisdiction to extend the claims filing period. We affirm.
Rooney, an orthopedic surgeon, was insured by Imperial for malpractice liability from June 8, 1974, to June 8, 1975, and from June 20, 1975, to December 29, 1975. (For ease of reference, these policies are referred to in the singular.) This policy covered occurrences of alleged malpractice during the policy period, regardless of how many years later a claim was actually made (occurrence policy).
Imperial became insolvent and the Commissioner was appointed liquidator of its assets on January 10, 1978. Pursuant to Insurance Code section 1021, subdivision (a), 1 and section 1063.7, 2 the Commissioner published notice that claims against Imperial in the insolvency proceeding must be filed within six months, by July 21, 1978. The Commissioner also mailed individual notices to all persons who were insured under Imperial professional liability policies issued on or after January 1, 1974.
In particular, on February 23, 1978, the Commissioner mailed notice to Rooney at the address shown on his policy, the only address for Rooney known to the Commissioner. However, Rooney never received the notice, having moved to a new address within the same county sometime in February 1977. The Commissioner was unaware of Rooney's lack of receipt of notice because the notice was not returned as undeliverable. Rooney was not required by his policy to advise Imperial of address changes.
On October 12, 1978, after the six month period had expired, Rooney learned of a possible malpractice claim against him for services rendered to Bryan Crowder during the time covered by the Imperial policy. Rooney notified CIGA of this potential claim on October 12, 1978.
Crowder filed a malpractice lawsuit against Rooney on September 10, 1980. Two years later, Rooney filed a claim with the Commissioner on September 29, 1982. The Commissioner rejected Rooney's claim on November 3, 1982, because the last date to file a claim against Imperial's estate was July 21, 1978. 3
Thereafter, Rooney entered into a stipulated judgment with Crowder, and then petitioned the superior court for an order allowing him to file the claim ( § 1032), 4 arguing that the notice mailed by the Commissioner in February 1978 was defective because it was incorrectly addressed. Rooney argued that the Commissioner could have easily discovered his new address through telephone company listings for the same county as the address shown on his policy, and through medical licensing and other professional association listings.
The trial court granted the petition, and issued a minute order stating:
This appeal followed.
The primary objective of CIGA is to provide insurance against "loss arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies." ( § 119.5; Middleton v. Imperial Ins. Co., supra, 34 Cal.3d at p. 137, 193 Cal.Rptr. 144, 666 P.2d 1; Central National Ins. Co. v. California Ins. Guarantee Assn. (1985) 165 Cal.App.3d 453, 458, 211 Cal.Rptr. 435.) The legislative intent was to create a protection for the public against insolvent insurers when no secondary insurer is available. (Ibid.) Thus, "[i]n our view CIGA was created for the protection of the public." (Ross v. Canadian Indemnity Ins. Co. (1983) 142 Cal.App.3d 396, 404, 191 Cal.Rptr. 99.)
Although the statutes governing liquidation proceedings require only published notice ( § 1021, et seq.), the CIGA legislation requires the liquidator, here the Commissioner, to give notice of the liquidation and the claims filing period by prepaid first class mail to: "(a) all persons known or reasonably expected to have or be interested in claims against the insurer, at the last known address within this state; (b) all insureds of the insurer, at the last known address within this state, accompanied by a notice of the date of termination of insurance...." ( § 1063.7.) (Middleton v. Imperial Ins. Co., supra, 34 Cal.3d at p. 137, 193 Cal.Rptr. 144, 666 P.2d 1.)
In Middleton, a case arising from the same insolvency herein, the Supreme Court held that the Commissioner must give notice of insolvency and the claims filing period to Imperial's insureds who, like Rooney, held occurrence liability policies. (34 Cal.3d at p. 139.) Thus the Commissioner was statutorily required to send a notice to Rooney by prepaid first class mail to his "last known address within this state." ( § 1063.7.)
The Commissioner and CIGA argue that the Commissioner's compliance with section 1063.7's notice requirements is established by the fact that the notice was mailed to Rooney's "last known address"--the address shown on Rooney's policy. They argue that whether notice was actually received is immaterial. Rooney, however, argues that the Commissioner did not fully comply with section 1063.7 in that Rooney never received notice, despite the fact that his current address was readily ascertainable through a variety of sources, including telephone company, medical licensing and other professional association listings.
Generally, "[w]hen the statutory language is thus clear and unambiguous there is no need for construction, and courts should not indulge in it." (Solberg v. Superior Court (1977) ...
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