Final August I wrote about Rosenberg-Wohl v. State Farm, 1 a California appellate resolution figuring out {that a} home-owner’s coverage’s one-year “Swimsuit Towards Us” provision outmoded the four-year statute of limitations for a California Unfair Competitors Legislation (“UCL”) declare. The California Supreme Courtroom is reviewing that call, 2 and the policyholder whose declare was denied by State Farm is now receiving assist from California Legal professional Common Rob Banta, who filed an amicus transient final week. 3 Whereas no ruling has but been made, the details and circumstances round that case are a superb reminder to all policyholders, public adjusters, and remediation contractors to grasp how a coverage’s “Swimsuit Towards Us” provision works, particularly beneath California’s complicated tolling legal guidelines.
That case concerned a Plaintiff who, on April 23, 2019, submitted a declare to State Farm for repairs to the outside staircase of her house after she seen her aged neighbor slipping on the staircase. State Farm denied the declare a number of days in a while the idea that there was “no proof of a lined explanation for loss nor any lined unintended direct bodily loss to the entrance exterior stairway.” State Farm’s denial additionally referenced the swimsuit limitation provision. The Plaintiff alleged that State Farm despatched its denial letter though it had not “inspected the steps, requested her or her husband any questions, interviewed the aged neighbor, or contacted any of the contractors concerned.”
Over a yr later, Plaintiff’s husband, an legal professional, contacted State Farm and obtained a voicemail from its adjuster stating that it had “reopened” the declare. The adjuster subsequently denied the declare once more, this time on the idea that “the coverage doesn’t present protection for preventative or security measures to the property.” Plaintiff filed a declaratory aid motion beneath the UCL looking for an order, partially, requiring State Farm to “determine the relevant purpose(s) for any denial, so {that a} claimant can consider State Farm’s good religion and reasonableness and determine whether or not and methods to submit new or totally different proof…” The trial court docket sustained State Farm’s demurrer on the idea that the one-year “Swimsuit Towards Us” provision utilized to the Plaintiff’s declare. The appellate court docket affirmed, first noting that the one-year “Swimsuit Towards Us” provision within the coverage is a part of California’s normal insurance coverage kind beneath Insurance coverage Code part 2071. The court docket decided that as a result of Plaintiff’s alleged acts towards State Farm occurred through the claims dealing with interval, the declare arises out of a contractual relationship and is throughout the one-year limitation interval. Importantly, the court docket additionally held that “utilizing phrases like ‘reopened,’ ‘for some purpose,’ and ‘subsequent step’” was “manifestly inadequate to determine a waiver of the ‘Swimsuit Towards Us’ limitation.”
The difficulty to be determined by the California Supreme is whether or not the one-year limitation interval beneath the Insurance coverage Code part 2071 or the four-year limitations within the Enterprise and Professions Code part relevant to UCL claims apply. The Legal professional Common’s amicus transient argues: “A UCL motion…falls exterior part 2071. By definition, a UCL motion can not contain the restoration of damages for the denial of an insurance coverage declare – and thus can’t be an motion ‘for the restoration of a declare’ beneath part 2071. And since UCL actions problem conduct independently proscribed by the UCL – moderately than counting on duties created or imposed by private-party insurance coverage insurance policies – such actions will not be ‘on the coverage’ beneath part 2071.” The transient additional argues: “…If [Plaintiff] does show unfair enterprise practices, there’s each purpose to assume that the Legislature would have wished that conduct enjoined beneath the UCL, given the statute’s overarching objective of addressing ongoing wrongful enterprise conduct in no matter context such exercise may happen.”
Whereas it stays to be seen whether or not the appellate ruling might be upheld, policyholders, public adjusters, and remediation contractors dealing with claims in California ought to know that every one owners’ insurance policies in California include related “Swimsuit Towards Us” provisions. Simply because an insurance coverage firm agrees to “reopen” a declare doesn’t imply it waives the “Swimsuit Towards Us” provision, nor does it robotically toll the interval for bringing a lawsuit. It might be essential to get unequivocal, written affirmation from the insurance coverage firm agreeing that the deadline is being tolled. It might additionally serve the policyholder’s finest curiosity to have early legal professional involvement properly earlier than the interval expires.
1 Rosenberg-Wohl v. State Farm Fireplace & Cas. Co., 93 Cal.App.fifth 436, — Cal.Rptr.3d — (Cal. App. 2023).
2 Rosenberg Wohl v. State Farm Fireplace & Cas. Co., No. S281510 (Cal. Oct. 18, 2023).
3 Rosenberg Wohl, No. S281510 [Amicus Curie Brief filed Apr. 11, 2024] (Cal.).