Escobedo v. Estate of Snider
| Decision Date | 20 February 1997 |
| Docket Number | No. S052682,S052682 |
| Citation | 14 Cal.4th 1214,60 Cal.Rptr.2d 722,930 P.2d 979 |
| Court | California Supreme Court |
| Parties | , 930 P.2d 979, 97 Cal. Daily Op. Serv. 1189, 97 Daily Journal D.A.R. 1809 Mary Ruth ESCOBEDO, Plaintiff and Appellant, v. ESTATE OF Danny G. SNIDER, Defendant and Respondent. |
Rozanski & Friedland, Los Angeles, W. Michael Workman, San Francisco and Matthew Tobias Surlin, Los Angeles, for Plaintiff and Appellant.
Russell Iungerich, Los Angeles, Michaelis, Montanari & Johnson, Garry L. Montanari and Michael D. Pilla, Westlake Village, for Defendant and Respondent.
Coddington, Hicks & Danforth, Clinton H. Coddington, Richard G. Grotch, Redwood City, Kenney & Markowitz, Stephen C. Kenney, George M. Moore, Walsh, Donovan, Lindh & Keech, Neil B. Klein, San Francisco, Rosenman & Colin, Franklin F. Bass and Teresa L. Graham, New York City, as Amici Curiae on behalf of Defendant and Respondent.
This case calls on us to interpret the California Uniform Aircraft Financial Responsibility Act (hereafter CUAFRA), Public Utilities Code sections 24230 to 24410. 1 In particular, we are required to decide whether an insurance policy for aircraft liability, which the insurer deemed canceled for lack of premium payment, was continued in force, beyond the purported cancellation date, under a provision of CUAFRA stating that certain aircraft liability policies may not be canceled without 30 days' prior notice to the California Department of Transportation (hereafter the department). (§ 24361.)
CUAFRA is not a mandatory insurance law. It contains no requirement that owners or operators of private aircraft maintain liability insurance or that owners and operators generally provide proof of such coverage to the department or any other agency. Instead, CUAFRA requires that after certain accidents a noncommercial aircraft owner or operator demonstrate the ability to respond in damages through the deposit of security, proof of a liability policy in force at the time of the accident, or qualification as a self-insurer. (§§ 24325-24353.) In this critical respect, CUAFRA differs from the mandatory insurance law governing commercial truckers that we construed in Transamerica Ins. Co. v. Tab Transportation, Inc. (1995) 12 Cal.4th 389, 48 Cal.Rptr.2d 159, 906 P.2d 1341.
Read as an integral part of CUAFRA, the cancellation notice provision, section 24361, is ambiguous as to whether it governs cancellation of all aircraft liability policies meeting certain coverage minima, or only those policies filed with the department after an accident to satisfy the financial responsibility requirement. Although the legislative intent is not completely clear, we conclude the correct interpretation is the latter one, under which section 24361 comes into play only when an insurance policy has been filed with, or certified to, the department as proof of ability to respond in damages.
On October 30, 1992, Danny G. Snider and Jennie Escobedo were killed in the crash of a Piper aircraft. Snider was the owner and operator of the plane; Escobedo was his non-paying passenger. Escobedo's mother, Mary Ruth Escobedo, brought this action for wrongful death against Snider's estate, but, pursuant to Probate Code section 552, served the complaint on Snider's former insurer, National Aviation Underwriters, Inc. (National), rather than on his personal representative. Under Probate Code section 554, plaintiff's recovery was thus limited to the amount of the insurance coverage, if any.
The pertinent facts regarding Snider's liability coverage with National were undisputed, and in large part were the subject of a stipulation by the parties. Beginning October 12, 1990, Snider was insured by National for liability for personal injury, including injury to passengers, arising from operation of the Piper aircraft. The policy's coverage schedule sheet stated it was effective from October 12, 1990, "until canceled." Consistently, under the heading "Policy Period and Territory," the policy stated: "The policy starts on the effective date and remains in force until canceled." Under the heading "Cancellation," the policy stated: "If you [Snider] do not pay the premiums on time we [National] will consider the policy to be canceled at your request...." A separate endorsement regarding cancellation repeated this language, as well as setting out the grounds on which National could cancel the policy.
In October 1991, Snider continued the policy in force by payment of an additional year's premium. On September 12, 1992, National sent Snider an annual premium bill, stating the policy would be "canceled" as of October 12, 1992, if payment was not received by that date. On October 12, National notified Snider his policy was "canceled" for nonpayment of premium, but could be reinstated with no lapse of coverage if payment were received by October 27. Snider never paid the premium. On October 30, 1992, Snider died in the plane crash.
No notice of the policy's cancellation was sent to the department. Nor was there any evidence the policy, or any certificate of insurance regarding the policy, had ever been filed with the department.
The question of insurance coverage was tried to the court before any other issue. Based on the stipulated facts and other written evidence, the court found no coverage because the policy had "expired" on October 12, 1992, for nonpayment of premium. The trial court rejected plaintiff's claim the policy had continued in force through a failure to comply with CUAFRA. The court entered judgment for Snider's estate and against plaintiff Escobedo.
The Court of Appeal reversed. In its view, CUAFRA provides that coverage under a noncommercial aircraft liability policy "is continuous and uninterrupted until the insurer or its insured sends a cancellation notice to the Department of Aeronautics." Relying on our decision in Transamerica Ins. Co. v. Tab Transportation, Inc., supra, 12 Cal.4th 389, 48 Cal.Rptr.2d 159, 906 P.2d 1341, the Court of Appeal held the policy could not have "expired" on October 12, 1992, because "[w]here, as here, the Legislature requires that a cancellation notice be mailed to a regulatory agency before the policy is canceled, general principles concerning 'expiration' of the policy have no efficacy."
We granted review on the petition of defendant, Snider's estate.
In 1954, the National Conference of Commissioners on Uniform State Laws and the American Bar Association approved a Uniform Aircraft Financial Responsibility Act (UAFRA). As the commissioners explain in a preface to UAFRA, the model act is not a compulsory insurance law, since "the requirement of insurance or security does not go into effect until an accident occurs and there is no provision for compulsory insurance or security thereafter," but was intended, rather, as an "incentive" to aircraft owners and operators "to provide for their financial responsibility by taking out liability insurance or otherwise before they operate." (12 West's U. Laws Ann. (1996) U. Aircraft Financial Responsibility Act, Prefatory, Note: p. 23.) UAFRA was based, in concept, on existing motor vehicle financial responsibility laws. The commissioners noted that in most states such laws had proven effective, in that "withdrawal of the privilege of further operation of a motor vehicle until security is given has been sufficient to result in insurance being taken in most instances...." (Ibid.)
California adopted its version of UAFRA in 1968. While departing from the model act in certain ways, the Legislature retained the central concept of using a requirement for post accident proof of ability to respond in damages as an incentive to owners and operators to obtain and maintain liability insurance.
CUAFRA requires, first, that the owner or operator of a noncommercial aircraft report to the department 2 any accident that resulted in death, personal injury or damage to nonowned property in excess of $400. (§§ 24243, subd. (d), 24300; cf. UAFRA, § 3.) Upon receipt of a report, the department is to determine "the amount of security [within specified limits] which it deems sufficient to satisfy any judgment for damages resulting from the accident which may be Section 24327 sets out several circumstances under which the security requirements do not apply. Among these are that the owner or operator had "in effect at the time of the accident an aircraft liability policy or bond" with respect to the aircraft or its operation. (§ 24327, subds. (d), (e); cf. UAFRA, § 4, subd. (c).) 4 Section 24350, in turn, sets out the requirements for an insurance policy to be "effective under Article 2 []." (Cf. UAFRA, § 5.) These requirements include specified minimum coverage limits for death, bodily injury and property damage, "[i]f the accident results" in such death, injury or damage. (§ 24350, subds. (b), (c).) 5
[930 P.2d 982] recovered against each owner or operator ...." (§ 24325; cf. UAFRA, § 4, subd. (a).) The owner or operator must then deposit security in the specified amount, to be used in payment of any judgment or settlement against the owner or operator on a claim arising from the accident. (§§ 24326, 24357, 24358.) Under section 24402, it is a misdemeanor for the owner or operator to operate an aircraft or allow an owned aircraft to operate without having complied with the post-accident security requirements. 3
Although section 24326 requires deposit of security or proof of applicable insurance only after an accident, an owner or operator may take action before any accident to prevent imposition of a security requirement. Under section 24243, subdivision (f), CUAFRA as a whole, with the exception of the reporting requirement, does not apply to any person who has filed with the department, and maintained in force, a certificate of insurance...
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