Opinion ID: 756989
Heading Depth: 4
Heading Rank: 1

Heading: Termination as a Breach

Text: 10 Although California construes ambiguous language in an insurance contract in favor of the insured, the terms must contain some ambiguity to trigger this rule of construction. Hackethal v. National Cas. Co., 189 Cal.App.3d 1102, 1109, 234 Cal.Rptr. 853 (Cal.Ct.App.1987). Moreover, if the terms of an insurance contract are plain and unambiguous, the court has a duty to enforce the contract as agreed upon by the parties. Id. Specifically, applying California law, this court upheld the validity of an insurance contract that recognized the insurer's right of unilateral termination. See Northwestern Mut. Ins. Co. v. Michaelson, 322 F.2d 304, 305-06 (9th Cir.1963). 11 Here, the plain language of both the certificate and the master policy permits Allianz's unilateral termination of the policy. The master policy provides, in pertinent part, for termination on Any Policy Anniversary Date, if [Allianz] gives 60 days advance written notice to the Policyholder. Likewise, the certificate states: the Group Policy may be changed or cancelled without the consent of any insured person and without prior notice to him. Solomon's reliance on Humphrey v. Equitable Life Assurance Soc'y of Amer., 67 Cal.2d 527, 63 Cal.Rptr. 50, 432 P.2d 746 (Cal.1967), for a contrary result is misplaced because there is no conflict or ambiguity between the certificate and the master policy. 12 Solomon next argues that if Allianz had the power to terminate, it did not comply strictly with the notice provisions in the master policy. Under California law, Allianz's unilateral termination is valid only if it strictly adhered to the contractual requirements. See Lee v. Industrial Indem., 177 Cal.App.3d 921, 924, 223 Cal.Rptr. 254 (Cal.Ct.App.1986). Here, the master policy provides that Allianz could terminate on Any Policy Anniversary Date, if [Allianz] gives 60 days advance notice to the Policyholder [the Trust]. On February 28, 1992, Allianz issued a letter to the trustee of the Professional and Executive Trust, informing him of the termination of policy number 7414, among others, effective June 1, 1992. The letter, however, was addressed to the Professional and Business Group Insurance Trust--not the Professional and Executive Trust. Solomon contends that since the letter referred to the wrong trust, Allianz did not give proper notification, and thus canceled the wrong trust. Solomon asserts that this inaccurate reference violates the rule requiring strict compliance with the contract. We disagree. 13 The record demonstrates that the trust received adequate notice pursuant to the contract, even with the inaccurate reference. Solomon has produced no evidence to the contrary. Further, Allianz's contractual obligation to notify the master policyholder was owed to the trust, not to Solomon. Finally, it is undisputed that the termination letter correctly refers to policy number 7414, the same identification number that appears on Solomon's certificate. Accordingly, the district court properly concluded that Allianz's unilateral termination did not constitute a breach.