Gyler v. Mission Ins. Co.
| Decision Date | 19 October 1973 |
| Citation | 514 P.2d 1219,110 Cal.Rptr. 139,10 Cal.3d 216 |
| Court | California Supreme Court |
| Parties | , 514 P.2d 1219 Emanuel GYLER et al., Plaintiffs and Appellants, v. MISSION INSURANCE COMPANY, Defendant and Respondent. L.A. 30132. |
Gyler & Gottlieb Emanuel Gyler and Arthur J. Gottlieb, Long Beach, in pro. per., for plaintiffs and appellants.
Groff, Dunne, Shallcross & Kane, Dunne, Shallcross & Kane and Russell E. Shallcross, Los Angeles, for defendant and respondent.
Jones & Wilson, Robert L. Wilson and James T. Hudson, Los Angeles, amici curiae for defendant and respondent.
Plaintiffs appeal from judgment of dismissal in an action for declaratory relief against a malpractice insurance carrier after a demurrer was sustained without leave to amend their third amended complaint.
The allegations of the third amended complaint include:
On 2 February 1965, Mrs. Hale suffered personal injuries and in March employed plaintiff attorneys to represent her. On 24 September 1969, she filed a complaint for malpractice against plaintiffs, alleging they allowed the statute of limitations to run against her claim by failing to file a workmen's compensation application prior to 2 February 1966. 1
Having acquired a malpractice insurance policy from defendant insurer for the period 19 August 1964 to 19 August 1967, plaintiffs requested defendant to undertake defense of the Hale action and to pay any resulting judgment. Defendant refused, and plaintiffs seek damages and a declaration determining the policy of insurance to be applicable to the Hale action.
Two paragraphs of the policy are here in question:
'This insurance is to indemnify . . . against any Claim or claims for breach of professional duty as Lawyers Which may be made against them during the period set forth in the Certificate by reason of any negligent act, error or omission, whenever or wherever the same was or may have been committed . . . 2
'If during the subsistence hereof the Firm shall become aware of any occurrence Which may subsequently give rise to a claim against them for breach of professional duty as Lawyers by reason of any negligent act, error or omission and shall during the subsistence hereof give written notice to the Underwriters of such occurrence, then any such claim which may subsequently be made against the Firm arising out of that negligent act, error or omission shall for the purposes of this Insurance be deemed to have been made during the subsistence hereof.' (Italics added.)
The crucial phrase in the first paragraph, 'claim or claims . . . which may be made' during the policy period, is ambiguous with respect to whether coverage is limited to claims asserted during the policy period or extends to claims maturing during the policy period but not asserted until later.
Use of the word 'may' creates an uncertainty when contrasted with other phrases which might have been used, such as 'claims which are made' or 'claims made.' The word 'may' is defined: 'have permission to . . . have liberty to . . . be in some degree likely to . . . used in auxiliary function expressing purpose or expectation . . . contingency . . . or concession . . ..' (Webster's New Internat. Dict. (3d ed. 1961) p. 1396.) 'May' is not usually construed as creating a requirement (In re Williamson (1954) 43 Cal.2d 651, 655--656, 276 P.2d 593) but is used to signify the ability to choose or the power to act (So. Cal. Jockey Club v. Cal. etc. Racing Bd. (1950) 36 Cal.2d 167, 173, 223 P.2d 1; National Automobile etc. Co v. Garrison (1946) 76 Cal.App.2d 415, 417, 173 P.2d 67).
The use of 'may' in the policy renders it reasonably subject to two constructions. First, the phrase might limit coverage to a claim asserted within the policy period and exclude claims asserted afterward, making the words 'which may be' superfluous. Secondly, the phrase might be construed as extending coverage to any claim which arose and Could have been asserted during the policy period, including claims not actually asserted until after the policy's expiration.
The meaning of an insurance policy is determined by the insured's reasonable expectation of coverage, and all doubts are resolved against the insurer. (Century Bank v. St. Paul Fire & Marine Ins. Co. (1971) 4 Cal.3d 319, 321, 93 Cal.Rptr. 569, 482 P.2d 193.) Any uncertainty or ambiguity in the peril insured against will be resolved in favor of imposing liability. (Continental Cas. Co. v. Zurich Ins. Co. (1961) 57 Cal.2d 27, 32, 17 Cal.Rptr. 12, 366 P.2d 455.)
Thus the first quoted paragraph must be construed to provide malpractice coverage for claims maturing during the policy period whether or not the claim is actually asserted during that period.
As so construed, the first paragraph is not in conflict with the second, but is supplemented by it. A lawyer's malpractice usually damages intangible property interests, and the occurrence dates of the negligence, the injury, and the discovery may vary. (Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 182, 98 Cal.Rptr. 837, 491 P.2d 421 et seq.; Budd v. Nixen (1971) 6 Cal.3d 195, 200, 98 Cal.Rptr. 849, 491 P.2d 433 et seq.)...
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