Opinion ID: 2823833
Heading Depth: 2
Heading Rank: 3

Heading: Friedland Distinguished

Text: Â¶40Â Â Â Â Â Having explained the rationale for our decision, we conclude that this outcome is consistent with our precedent.Â Â Â Â Â Craft contends that Friedland extended the notice-prejudice rule to all notice requirements of liability policies. Philadelphia, meanwhile, points out that the policy at issue in Friedland was an occurrence policy and argues that our holding in that case does not apply to a date-certain notice requirement. We agree with Philadelphia. Â¶41Â Â Â Â Â In Friedland, we extended the notice-prejudice rule beyond UIM policies to âliability policies.â 105 P.3d at 645. Friedlandâs reference to âcomprehensive general liability policies,â id. at 642, does not mean that the notice-prejudice rule generally applies to all aspects of all liability policies. Rather, that phrase refers to policies that âprovide for broad coverage generally.â 9A Steven Plitt, Daniel Maldonado & Joshua D. Rogers, Couch on Insurance Â§ 129:1, at 6 (3d ed. 2005 & Supp. 2014); see also Hoang, 149 P.3d at 802; Friedland, 105 P.3d at 642 (stating that the policies at issue provided coverage for bodily injury, property damage, and medical payments to third parties). Notably, Friedland involved an occurrence policy, 105 P.3d at 642 (quoting policy provision referring to âan occurrenceâ), and prompt notice provisions, id. (quoting policy provisions requiring written notice of an occurrence âas soon as practicable,â andimmediate notice of a claim or suit). Thus, its holding, though worded broadly, cannot be read to govern date-certain notice requirements in claims-made policies. Â¶42Â Â Â Â Â In addition, Friedlandâs prejudice rationale hinged on the nature of prompt notice requirements and does not support applying the rule to the date-certain notice requirement of such policies. See id. at 643â44. As discussed above, however, the date-certain notice requirement in a claims-made policy serves no purpose beyond defining the scope of coverage under the policy. Â¶43Â Â Â Â Â Moreover, the public policy concerns that counseled in favor of extending the notice-prejudice rule to liability policies in Friedlandâ(1) the adhesive nature of insurance contracts, (2) the publicâs interest in compensating tort victims, and (3) the inequity of an insurerâs receiving a windfall from a technicalityâdo not support applying the rule to date-certain notice requirements. See id. at 646. Â¶44Â Â Â Â Â Although the adhesive nature of insurance contracts is no different in the context of claims-made policies, we cannot say with any certainty that applying the notice-prejudice rule to such policies would result in greater compensation for tort victims. In some cases, the notice-prejudice rule would allow recovery where it otherwise would be barred by a date-certain notice requirement. On the other hand, if insurers could not limit risk through a date-certain notice requirement, they would likely, out of necessity, increase their premiums and reduce the number of claims-made policies they offer. As a result, fewer policies might be issued, potentially outweighing the marginal increase in coverage that the notice-prejudice rule would create by excusing late notice in some instances. Cognizant of these competing effects on theoverall compensation of tort victims, we agree with the Tenth Circuit that applying the notice-prejudice rule to the date-certain notice requirement of claims-made policies could be a âdouble-edged sword.â Craft, 560 Fed. Appâx at 714. Â¶45Â Â Â Â Â Importantly, strict enforcement of a date-certain notice requirement does not result in a windfall for the insurer based on a technicality. When applied to a prompt notice requirement, the notice-prejudice rule avoids forfeiture of coverage (based on a âtechnicalityâ) for an otherwise covered claim. But, as discussed above, the date-certain notice requirement of a claims-made policy is a fundamental term of the insurance contract, and notice under such a provision is a material condition precedent to coverage.Â Â Â Â Â Â Â Thus, to apply the notice-prejudice rule to excuse an insuredâs noncompliance with a date-certain notice requirement essentially rewrites the insurance contract and effectively creates coverage where none previously existed. As the Tenth Circuit noted, âextending the insuredâs coverage without compensating the insurer would allow the insured to reap the windfall.â Id. (emphasis added). In short, strict enforcement of the date-certain notice requirement of a claims-made policy does not give rise to the concerns of inequity we discussed in Friedland.