Court Opinion

ID: 9633349
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:44:04.353722+00
Date Added: 2024-06-11T13:16:40.899750
License: Public Domain

MOSK, J.
I dissent. I would affirm the Court of Appeal’s judgment in favor of the insured, although on slightly different grounds. I have no quarrel with the majority’s analysis, but as I shall explain, they err in failing to reach the conclusion to which their own reasoning inevitably must lead.
Public Utilities Code section 24361 provides: “No insurance policy meeting the requirements of Section 24350 shall be canceled unless 30 days’ prior notice is given to the department by either the insured or the insurance company.” I agree with the majority that the clause “meeting the requirements of Section 24350” is ambiguous. (Maj. opn., ante, at p. 1221.) Indeed, “[n] either party has offered a completely satisfactory explanation of the legislative intent, but, at the same time, neither party has shown the other’s interpretation is absurd or irrational. The manner in which section 24361 was *1229intended to operate within [the California Uniform Aircraft Financial Responsibility Act (CUAFRA)] remains obscure.” (Id. at p. 1226.)
Hence the majority concede that the clause “could reasonably be read in either of two ways: as including all aviation liability policies issued by qualified companies and providing personal injury and property damage coverage in the minimum amounts stated in section 24350, or as referring only to policies proffered by an owner or operator under section 24243 or 24327 in order to establish exemption from CUAFRA’s requirement for postaccident security.” (Maj. opn., ante, at p. 1221, italics added.) Plaintiff asserts that the Court of Appeal’s interpretation of Public Utilities Code section 24361 is correct: in essence, that coverage of the policy at issue continued until 30 days after the insurer or the insured notified the Division of Aeronautics that it was canceled.
The majority reject this interpretation because, in their view, it is plausible only when “read in isolation from the statutory scheme as a whole.” (Maj. opn., ante, at p. 1222.) In other words, they believe that plaintiff’s view misses the forest for the trees. But their own conclusion commits that very error. They adopt an interpretation that they find “arguably” (ibid.) preferable: that “a ‘policy meeting the requirements of Section 24350’ is reasonably understood to be a policy proffered to the department by the owner or operator as postaccident proof of ability to respond in damages.” (Ibid.)
Conceivably it may so be understood by a lawyer scrutinizing the majority’s analysis. But laypeople, including insurance agents, on seeing the statutory language, would think coverage continues broadly under policies of this type until the insurer sends a notice of cancellation to the Division of Aeronautics. The majority overlook the rule that “[n]ormally, ambiguous insurance statutes are to be construed to carry out the objective of providing coverage. [Citation.] Any provision purporting to limit coverage must be ‘ “conspicuous, plain and clear.” ’ ” (Holcomb v. Hartford Casualty Ins. Co. (1991) 230 Cal.App.3d 1000, 1006 [281 Cal.Rptr. 651].) As the majority acknowledge, the statute at issue here does not plainly limit coverage. Indeed, the Court of Appeal decided that it plainly provided for it.
It is undesirable to interpret Public Utilities Code section 24361 in a manner that a layperson cannot understand without resort to the complexities of the majority’s analysis. When an insurer finds a statutory provision onerous, it has a strong incentive to lobby the Legislature to change it, and the Legislature is likely to listen. However, it is difficult to conceive that simply requiring an insurer to notify the Division of Aeronautics is particularly onerous. Individual insured parties, who are likely to heed an agent’s *1230advice that their policies remain in effect until canceled according to statute, should be able to rely on arguably ambiguous statutory language as favoring coverage. I therefore dissent.