Niagara Fire Ins. Co. v. Cole

• Decision Date: 10 June 1965
• Citation: 235 Cal.App.2d 40,44 Cal.Rptr. 889
• Parties: NIAGARA FIRE INSURANCE CO., Plaintiff and Respondent, v. Aloha Juanita COLE, Defendant and Appellant. Civ. 437.
• Court: California Court of Appeals Court of Appeals

Page 889

44 Cal.Rptr. 889

235 Cal.App.2d 40

NIAGARA FIRE INSURANCE CO., Plaintiff and Respondent, v. Aloha Juanita COLE, Defendant and Appellant.

Civ. 437.

District Court of Appeal, Fifth District, California.

June 10, 1965.

Slinkard & Waterman and James B. Waterman, Mardikian & Kelso, Fresno, for defendant and appellant.

Hays & Hays and James N. Hays, Fresno, for plaintiff and respondent.

STONE, Justice.

This appeal is from a judgment for respondent insurance company in an action for declaratory relief, and for an injunction to restrain appellant from proceeding under the uninsured motorist statute with an arbitration hearing on her claim for injuries.

Respondent issued to appellant an automobile insurance policy with uninsured motorist coverage for the period March 10, 1960, to March 10, 1961. On April 4, 1960, while driving a vehicle covered by the policy, appellant was injured; the driver of the other vehicle involved was and is unknown. Within 30 days appellant filed with respondent a statement concerning the accident, as required by the policy provisions relating to uninsured motorist coverage. On July 17, 1963, appellant made a claim and demand upon respondent for damages for bodily injuries, and a demand for arbitration with the American Arbitration Association. No action was filed against the uninsured motorist, and no arbitration proceeding was instituted prior to July 17, 1963.

Following appellant's demand for arbitration, respondent filed this action for declaratory relief and for an injunction staying arbitration proceedings, alleging that appellant's cause of action under the uninsured motorist provisions of the policy was barred by section 11580.2, subdivision (h), of the Insurance Code.

When the accident occurred the uninsured motorist statute embodied no period of limitations governing causes of action accruing thereunder, so that general statutes limiting the filing of actions were applicable. Effective September 15, 1961, which was after the occurrence of the accident, subdivision (h) was added to section 11580.2. It provides:

'(h) No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless within one year from the date of the accident:

'(1) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction, or

'(2) Agreement as to the amount due under the policy has been concluded, or

'(3) The insured has formally instituted arbitration proceedings.'

The trial court found that appellant's cause of action was barred by the one-year period of limitations.

It is well established that the Legislature may reduce the period within which an action may be commenced, since a statute of limitations affects the remedy only and does not impair the cause of action itself. (Mitchell v. Automobile, etc., Underwriters, 19 Cal.2d 1, 118 P.2d 815, 137 A.L.R. 923; Scheas v. Robertson, 38 Cal.2d 119, 125, 238 P.2d 982.) However, a statute shortening the period of limitations cannot be applied retroactively to wipe out an accrued cause of action that is not barred by the then applicable statute of limitations. To avoid the unconstitutional effect of retroactive application, a statute must be applied prospectively to such causes of action. (Baldwin v. City of San Diego, 195 Cal.App.2d 236, 241, 15 Cal.Rptr. 576.) Even when applied prospectively, the claimant must be allowed a reasonable time within which to proceed with his cause of action. (Scheas v. Robertson, supra; 31 Cal.Jur.2d § 5, p. 431.)

More than one year elapsed from the date of the accident, April 4, 1960, and the effective date of section 11580.2, subdivision (h), September 15, 1961. Therefore the amendment cannot be applied retroactively, to deprive appellant of her cause of action. However, even by applying the amendment prospectively, we find that more than one year elapsed from the date of enactment and appellant's demand for arbitration. Thus the question narrows to whether appellant was allowed a reasonable time to present her claim after the statute became effective.

The period of limitations commenced to run September 15, 1961, the effective date of the enactment. Under the statute appellant had one year, the maximum period allowed under the statute, to take action on her claim. Were we to hole this an unreasonable limitation as to appellant, it would follow that we deem the one-year limitation provided by section 11580.2, subdivision (h), inherently unreasonable. We do not so hold, because the considerations which support the one-year period of limitations fixed by section 11580.2, subdivision (h), appear reasonable to us.

A like question was presented in Olivas v. Weiner...