Middleton v. Imperial Ins. Co.
| Decision Date | 10 September 1982 |
| Citation | 136 Cal.App.3d 47,186 Cal.Rptr. 155 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Michael J. MIDDLETON, M.D., and William J. Bowland, R.N.A., Petitioners and Appellants, v. IMPERIAL INSURANCE COMPANY, a California Corporation, Respondent and Respondent. INSURANCE COMMISSIONER OF the STATE OF CALIFORNIA, Applicant and Respondent. Civ. 63105. |
James M. Duenow, San Luis Obispo, Neil S. Tardiff, Harding & Zilinskas, Santa Barbara, for petitioners and appellants.
Clausen, Harris & Campbell, Lon Harris and Marie D. Clause, Los Angeles, for respondent and respondent.
George Deukmejian, Atty. Gen., Edmond B. Mamer, Deputy Atty. Gen., for applicant and respondent.
NATURE OF APPEAL:
Appeal from an order of the superior court denying appellants' petition to file claims beyond the statutory time with the California Insurance Commissioner as liquidator of an insolvent insurance company and with the California Insurance Guarantee Association.
OUR HOLDING:
There is no statutory or other authority for allowing the filing of a late claim as appellants seek and we affirm the judgment of the trial court.
FACTUAL BACKGROUND:
Appellants, medical doctors, had been insured by Imperial Insurance Co. (Imperial) for malpractice liability. Imperial became insolvent and in accordance with Insurance Code sections 1010 et seq. the State Insurance Commissioner (Commissioner) was appointed liquidator of its assets. He published notice of that and the statutory requirement that claims be filed within six months. (Ins.Code, § 1021.) Commissioner also sent written notice to Imperial policyholders, including those whose policies had terminated as far back as four years prior thereto. Appellants were not in the latter category, their policy having expired more than four years prior to the notice.
Two years after the time to file claims expired, a malpractice claim was made against appellants and they in turn made claim against Commissioner and California Insurance Guarantee Association (CIGA). The Commissioner did not accept, and CIGA rejected, the claim. Appellants petitioned the superior court for an order that they be permitted to file the claims. The petition was denied. The following chronological chart helps illustrate the relation of the events:
Date Event
------------------ -----------------------------
January 1, 1971 Policy issued by Imperial
September 25, 1971 Medical services rendered
January 1, 1973 End of coverage under policy
January 10, 1978 Appointment of liquidator for
Imperial
January 20, 1978 Publication of notice to file
claims
July 21, 1978 Expiration of six-months
claim period
June 30, 1980 Appellants notified of
malpractice claim
July 10, 1980 Claims made by appellants to
CIGA and to Commissioner
DISCUSSION
The chronology immediately discloses that three of appellants' contentions are without merit. These contentions are that the Insurance Commissioner as liquidator, by not giving actual written notice to persons insured by Imperial other than persons insured in 1974 and thereafter, (1) contravened Insurance Code sections 1021 and 1063.7 and thus denied appellants opportunity to timely file a claim; (2) denied them due process of law and; (3) denied them the equal protection of law.
Even if the Commissioner had given notice, the malpractice claim, for which appellants seek to file claim against Commissioner by reason of and under their insurance with Imperial, was not known nor made against appellants until nearly two years after the time to file claims had expired. Thus, even if appellants had been given notice, they would not have filed on this claim because it did not exist, nor was there any potential or undetermined claim based thereon known of by appellants. Logically and realistically, therefore, the reason for appellants' not filing the present claim under Insurance Code sections 1021 et seq. was not any failure of the Commissioner to give appellants notice. The incongruity, irrelevance and specious nature of the entire 'failure-to-file-this-claim-because-of-lack-of-notice" argument is self-evident. Consequently, the only remaining issue is the primary one: whether the superior court has jurisdiction to allow the filing of a claim which arises long after the statutory period for filing all claims has expired and where there is no statutory provision therefor. It is established that the superior court has neither inherent nor statutory power to allow this filing as appellants claim. The statute is specific.
The liquidation of an insurance company following the insurer's insolvency or delinquency is governed by the provisions of Insurance Code section 1010 et seq. Under the statutory process title in all the insurer's assets is vested in the Insurance Commissioner for the purpose of winding up the business of the insolvent company. The date of entry of the court's order of liquidation fixes the rights and liabilities of the insurer, its creditors, policyholders, members and others interested in the estate. The Commissioner as liquidator assumes exclusive authority to manage the insolvent's affairs, acting as a trustee with the powers of a statutory receiver. (Caminetti v. Guaranty Union Life Ins. Co. (1943) 22 Cal.2d 759, 141 P.2d 423.)
Insurance Code section 1021, subdivision (a) provides: Additionally, Insurance Code section 1024 provides: "Unless such claim is filed in the manner and within the time provided in section 1021, it shall not be entitled to filing or allowance, and no action may be maintained thereon."
These same sections and the same contentions presented in the case at bench were considered in Kinder v. Pacific Public Carriers Co-op, Inc. (1980) 105 Cal.App.3d 657, 164 Cal.Rptr. 567. There the court said: 'Far from providing for the late filing of claims, section 1024 of the Insurance Code does just the opposite and in mandatory language states that a late filed claim 'shall not be entitled to filing or allowance.' " (Id. at p. 663, 164 Cal.Rptr. 567.) The court in Kinder, cited with approval Carpenter v. Eureka Casualty Co. (1936) 14 Cal.App.2d 533, 58 P.2d 682, in which that court construed a predecessor to sections 1021 and 1024, wherein the court stated '... when the legislature has, by statute, prescribed the mode and manner in which a right may be exercised, the courts are without authority to make a change...." The Kinder court also observed that when a statute does not create an exception, there shall be none. (Kinder, supra, 105 Cal.App.3d at p. 661, 164 Cal.Rptr. 567.)
Analogy may be made to a probate proceeding. In Nathanson v. Superior Court (1974) 12 Cal.3d 355, 115 Cal.Rptr. 783, 525 P.2d 687, petitioners sought to compel the trial court's acceptance of a late probate claim. The State Supreme Court there said: (Id. at p. 366, 115 Cal.Rptr. 783, 525 P.2d 687.) The court further stated: "[T]he probate court lacked any authority to permit a claim to be filed after the statutory period had run." (Ibid., emphasis added.) The filing exceptions which have been permitted in the probate claims system have been made legislatively (e.g. Probate Code, § 721; see Romo v. Estate of Bennett (1979) 97 Cal.App.3d 304, 308, fn. 2, 158 Cal.Rptr. 635).
The applicability of this analogy was recognized at bench by superior court judges Weil and Foster. In the words of the latter:
On the other hand, claim filing requirements under the Government Tort Claims Act cited by appellants are not analogous to those in...
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