In Allied Premier Insurance v. United Financial Casualty Company, the Supreme Court today holds that a commercial trucker’s insurance policy expired under its terms even though the insurance company hadn’t properly cancelled a separate certificate of insurance on file with the Department of Motor Vehicles as required by state law. The ruling precludes one insurance company from getting equitable contribution from the predecessor insurer that didn’t adequately comply with DMV procedures. Under its policy, the plaintiff company had compensated the injured parties in the underlying wrongful death litigation against the trucker.
Answering a question posed by the Ninth Circuit, the court’s unanimous opinion by Justice Carol Corrigan distinguishes its 4-3 decision in Transamerica Ins. Co. v. Tab Transportation, Inc. (1995) 12 Cal.4th 389, which held a policy remained in force beyond its termination date because a notice of cancellation hadn’t been provided to the Public Utilities Commission. But Transamerica interpreted a statutory scheme that was superseded by current law and, the court concludes, “The difference in statutory language is significant.” Under the former, “the underlying policy could not be cancelled without notice to the PUC,” while the law now provides “only the certificate of insurance remains active until cancelled,” a cancellation that “triggers the DMV’s obligation to suspend the motor carrier’s permit.”
The court declines to decide “[t]he character, nature, and extent of the obligations owed by a company that does not properly cancel a certificate of insurance.” The Ninth Circuit didn’t ask about those matters, the court says, and they “can be clarified by further litigation and/or legislative action.” The court demurs that it need not resolve the “important policy question” regarding “how the overall statutory scheme will operate to protect the public.”
The court’s conclusion is contrary to the federal district court ruling in the case that the defendant insurer’s policy remained in effect because of the failed certificate cancellation.
In the Supreme Court, Horvitz & Levy represents the defendant insurer that prevails today.
Related:
Ninth Circuit question accepted.
Case briefs — see here.