Opinion ID: 2516051
Heading Depth: 1
Heading Rank: 1

Heading: the ninth circuit's certification

Text: The Northridge earthquake struck at 4:31 a.m. on January 17, 1994. It had an estimated magnitude of 6.7 or 6.8 on the Richter Scale. Many residences and commercial buildings were damaged. One report estimated that 450,000 insurance claims were paid, totaling $12.5 billion. (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1899 (1999-2000 Reg. Sess.) p. 2.) Another estimated that some 600,000 claims were paid, and put the damage figure at $15.3 billion. (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 1899 (1999-2000 Reg. Sess.) p. 4.) Many other claims were rejected, often on the basis of the statute of limitations. (Sen. Com. on Ins., Rep., Department of Insurance: In Rubble After Northridge (Aug. 28, 2000) p. 9.) More than 2,000 complaints were filed with the California Insurance Commissioner. (Assem. Com. on Insurance, Rep. on Dept. of Ins., Northridge Earthquake (2000) p. 26.) The Legislature later undertook an extensive investigation of the California Department of Insurance, its handling of these complaints, and its settlements with various insurers. (See generally Sen. Com. on Ins., Rep., Department of Insurance: In Rubble After Northridge, supra. ) The rejected claims have also engendered considerable litigation and generated five published opinions in the federal district court. ( Campanelli v. Allstate Ins. Co. (C.D.Cal.2000) 85 F.Supp.2d 980; Vashistha v. Allstate Ins. Co. (C.D.Cal.1997) 989 F.Supp. 1029; Ward v. Allstate Ins. Co. (C.D.Cal.1997) 964 F.Supp. 307; Sullivan v. Allstate Ins. Co. (C.D.Cal.1997) 964 F.Supp. 1407; Hill v. Allstate Ins. Co. (C.D.Cal.1997) 962 F.Supp. 1244.) The opinion of the Ninth Circuit succinctly summarized the facts and proceedings leading to its order of certification in this case: Peter Vu was one of countless insureds who suffered damage to his home as a result of the infamous Northridge earthquake of January 17, 1994. At the time of the earthquake, Vu maintained a homeowner's insurance policy with Prudential Property and Casualty Insurance Company. The policy included an endorsement for earthquake damage, covering $300,000.00 for his dwelling and $30,000.00 for appurtenant structures. A separate 10% deductible applied to each coverage. As required by California Insurance Code § 2071, Vu's policy contained a one-year suit clause providing that `[n]o action can be brought unless ... the action is started within one year after the date of loss.' Cf. Cal. Ins.Code § 2071 (`No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity ... unless commenced within 12 months next after inception of the loss.'). Within a few days of the earthquake, Vu contacted Prudential to report that his home had sustained observable damage, which included cracks in his walls and ceilings. An adjuster sent by Prudential inspected Vu's home on January 26 and informed him that he was entitled to $2,500 for damage to appurtenant structures, but that the damage to his home was only $3,962.50, an amount significantly below the policy deductible. On January 30, Prudential paid Vu for the appurtenant-structure damage. Relying on Prudential's inspection and denial of his claim, Vu took no further action until August 1995 when he discovered substantial additional damage that had been caused by the earthquake. In September 1995, some twenty months after Prudential had effectively denied Vu's claim for damage to his home, an appraiser hired by Vu estimated that the earthquake damage to Vu's home far exceeded the $30,000 deductible. [2] Vu promptly informed Prudential and requested coverage for this newly discovered damage. Prudential declined on the ground that the one-year statute of limitations on actions for recovery of claims had expired. Two and a half years after Prudential had resolved Vu's original claim, but less than a year after Vu discovered the additional damage, Vu filed suit in federal district court. Vu alleged that Prudential was estopped from invoking the one-year statute of limitations because his failure to bring an action within one year was the direct result of his reasonable reliance on Prudential's January 1994 inspection, and on Prudential's representation that the damage to his home fell below the $30,000 deductible. The district court granted Prudential's motion for summary judgment, holding that the one-year statute of limitations acted as a bar to Vu's breach-of-contract claim and to his second claim for breach of the implied covenant of good faith and fair dealing. Vu timely appealed. ( Vu v. Prudential Property & Cas. Ins. Co., supra, 172 F.3d at pp. 727-728, italics omitted.)