Vikco Ins. Services, Inc. v. Ohio Indem. Co.

• Decision Date: 19 February 1999
• Docket Number: No. A081471,A081471
• Parties: , 99 Cal. Daily Op. Serv. 1315, 1999 Daily Journal D.A.R. 1621 VIKCO INSURANCE SERVICES, INC., Plaintiff and Appellant, v. OHIO INDEMNITY COMPANY, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

Page 442

82 Cal.Rptr.2d 442

70 Cal.App.4th 55, 99 Cal. Daily Op. Serv. 1315,

1999 Daily Journal D.A.R. 1621

VIKCO INSURANCE SERVICES, INC., Plaintiff and Appellant, v. OHIO INDEMNITY COMPANY, Defendant and Respondent.

No. A081471.

Court of Appeal, First District, Division 4, California.

Feb. 19, 1999.

Gagen, McCoy, McMahon & Armstrong, Charles A. Koss, Richard C. Raines, Ali P. Hamidi, Danville, for appellant.

Archer, McComas, Breslin, McMahon & Chritton, Robert L. Sallander, Jr., Robert G. Seeds, Walnut Creek, for respondent.

McGUINESS, J. ^*

This appeal arises from a dispute and lawsuit over the termination of an insurance agency contract. Following a court trial, Vikco Insurance Services, Inc., (Vikco) appeals from a judgment entered in favor of respondent Ohio Indemnity Company (Ohio) determining that there is no private right of action to sue for damages for alleged violation of Insurance Code section 769. ¹ Vikco contends the trial court's determination is erroneous. For the first time on this appeal, Vikco also asserts that even if no private right of action exists under section 769, it may in any event bring its claims against Ohio pursuant to the Unfair Business Practices Act (Bus. & Prof.Code, § 17200 et seq.). We disagree with all of Vikco's arguments, and affirm the judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

At all times relevant to this appeal, Ohio has been in the business of providing automobile damage coverage in California. In April 1992, Ohio entered into a written contract (the Agency Agreement) with Vikco under which Vikco became Ohio's agent in California for the purpose of issuing insurance policies for Ohio. Included in the Agency Agreement was a provision stating that either party could terminate the agency relationship upon 45 days' written notice to the other. ² On March 1, 1995, Ohio personally delivered Vikco written notice that it was terminating the Agency Agreement effective April 30, 1995.

On March 22, 1996, Vikco filed suit against Ohio in Contra Costa County Superior Court. Vikco's complaint alleged four causes of action. The second cause of action, the only one relevant to this appeal, alleged that under section 769 Ohio was required to give Vikco 120 days' notice of terminating the Agency Agreement, instead of the approximately 60 days' notice it did give; and that by failing to give 120 days' notice Ohio damaged Vikco "in a sum to be shown according to proof...." ³

In its issue conference statement and accompanying motions in limine, Ohio contended: (1) Vikco did not have a private right of action to bring suit against Ohio for violation of section 769; (2) the provisions of section 769 are not implied in the parties' Agency Agreement; (3) under the express terms of section 769, the statutory 120-day notice of termination period may be modified by contract and mutual agreement of the parties; (4) assuming a violation of section 769 and the right to assert it, Vikco was not entitled to recover damages for lost commissions on policies it would have written if given longer notice of termination; and (5) if legally entitled to damages at all, the correct measure of damages would be net profit on additional business Vikco would have taken in, based on commissions minus the cost of obtaining and servicing this business.

After issue conference and submission of trial briefs, the matter was argued before the trial court on November 3, 1997. At the conclusion of the hearing, the trial court dismissed Vikco's second cause of action, holding that there was no private right of action for damages for violation of section 769. Vikco dismissed its remaining three causes of action without prejudice. On December 22, 1997, the trial court granted Ohio's motion in limine on the basis of its earlier determination that no private right of action exists under section 769. The trial court issued a written statement of decision and directed that judgment be entered for Ohio. Judgment was entered, and this appeal was timely noticed.

II. RIGHT OF ACTION UNDER SECTION 769

Before analyzing Vikco's substantive claim that it is entitled to damages for Ohio's failure to give it written 120 days' notice of termination in accordance with section 769, we must address the threshold jurisdictional issue of whether Vikco may bring this action at all. The controlling question in this case is whether there is a private right of action for violation of section 769. The trial court determined that: (1) in enacting section 769, the Legislature intended to protect the interests of both independent insurance agents and insureds, but did not intend to create a private right of action to enforce the provisions of the statute; and (2) the protections of section 769 are not implied in the Agency Agreement between the parties. The question of the existence of a private right of action to enforce the provisions of section 769 is apparently one of first impression.

The rules for statutory construction by an appellate court are well-established. "[O]ur first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. [Citations.] Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation. [Citation.] Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent. [Citations.]" (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387, 241 Cal.Rptr. 67, 743 P.2d 1323; see also, Cossack v. City of Los Angeles (1974) 11 Cal.3d 726, 733, 114 Cal.Rptr. 460, 523 P.2d 260; Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230, 110 Cal.Rptr. 144, 514 P.2d 1224; Conservatorship of Bryant (1996) 45 Cal.App.4th 117, 120-123, 52 Cal.Rptr.2d 755; Schmidt v. Retirement Board (1995) 37 Cal.App.4th 1204, 1210-1212, 44 Cal.Rptr.2d 297; Mir v. Charter Suburban Hospital (1994) 27 Cal.App.4th 1471, 1487, 33 Cal.Rptr.2d 243; Carlsbad Mun. Water Dist. v. QLC Corp. (1992) 2 Cal.App.4th 479, 488-491, 3 Cal.Rptr.2d 318; DeYoung v. City of San Diego (1983) 147 Cal.App.3d 11, 17-19, 194 Cal.Rptr. 722, overruled on other grounds in Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 10-15, 78 Cal.Rptr.2d 1, 960 P.2d 1031.)

Code of Civil Procedure section 1858 states the "general rule" for construction of statutes as follows: "In the construction of a statute ..., the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all." (See California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349, 45 Cal.Rptr.2d 279, 902 P.2d 297 [office of judge neither to insert nor to omit]; Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 274, 41 Cal.Rptr.2d 220, 895 P.2d 56 [citing § 1858 as one of the "[w]ell-established canons of statutory construction" and describing it as a "mandate"]; Crusader Ins. Co. v. Scottsdale Ins. Co. (1997) 54 Cal.App.4th 121, 133, 62 Cal.Rptr.2d 620.) Similarly, Code of Civil Procedure section 1859 provides: "In the construction of a statute the intention of the Legislature ... is to be pursued, if possible; and when a general and particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it."

These provisions are themselves expression of legislative intent regarding the proper interpretation of statutes enacted by the Legislature. Thus, " '... "[i]n construing ... statutory provisions a court is not authorized to insert qualifying provisions not included and may not rewrite the statute to conform to an assumed intention which does not appear from its language." ' " (In re Hoddinott (1996) 12 Cal.4th 992, 1002, 50 Cal.Rptr.2d 706, 911 P.2d 1381.) "[C]ourts are not at liberty to impute a particular intention to the Legislature when nothing in the language of the statute implies such an intention...." (Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist. (1992) 9 Cal.App.4th 644, 658, 11 Cal.Rptr.2d 850.) In short, we must begin by giving the statutory language its ordinary everyday meaning, construed in the context of the purposes and objectives of the Legislature.

Section 769, subdivision (a), states that once a written insurance agency or brokerage contract has been in effect for a year, it "shall not be terminated or amended by an insurer, except by mutual agreement, unless 120 days advance written notice has been given by the insurer to the broker-agent." This language sets out a simple mandatory rule requiring 120 days' written notice of termination, with one exception where "by mutual agreement" the parties provide otherwise. ⁴ The remainder of section 769 contains provisions for the protection of insureds where a terminated agent is unable to place the existing insurance policy with another insurance company. The statute does not contain any language providing a remedy or means of enforcing its substantive operative provisions. Specifically, there is no reference whatsoever to a private right...