Court Opinion

ID: 9561483
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:10:21.452582+00
Date Added: 2024-06-11T09:13:50.000467
License: Public Domain

PA NELLI, J.
I reluctantly concur with the majority’s opinion. The language of Insurance Code, section 11580.2, subdivision (c)(3), relating to the “consent to settle” provision, is intended to protect the insurer’s right of subrogation against the uninsured tortfeasor. (See maj. opn., ante, at p. 325.) In my view, then, the issue becomes whether the underinsured motorist carrier has a right to subrogation.
*333Unfortunately, as noted in the majority opinion, the language of section 11580.2 of the Insurance Code1 cannot be interpreted to provide underinsured motorist carriers with a right to subrogation. The Legislature explicitly provided uninsured motorist carriers with the right to subrogation. (§ 11580.2, subd. (g).) The Legislature did not, however, expressly provide underinsured motorist carriers with the same right to subrogation. Instead, underinsured motorist carriers have an explicit right to seek reimbursement or credit from their insureds. (§ 11580.2, subd. (p)(5>.) Because we are limited by the language providing that provisions of subdivision (p) shall prevail in the event there is a conflict with subdivisions (a) through (o) (§ 11580.2, subd. (p)), and because the provisions of subdivisions (p)(3) and (p)(5) may be interpreted to conflict with a right to subrogation (maj. opn., ante, at pp. 324, 328), we have limited underinsured motorist carriers to the right to seek reimbursement or credit from their insureds. (§ 11580.2, subd. (P)(5).)
However, as noted during oral argument, this result leads to an inequity demonstrated by the following hypothetical. Assume two tortfeasors each have $300,000 in assets subject to execution. One tortfeasor does not buy automobile insurance. The other purchases the minimum policy limit required by law. Each tortfeasor is involved in an automobile accident. Under the current provisions, the uninsured motorist is potentially liable to the uninsured motorist carrier of the victim while the underinsured motorist’s assets cannot be reached by the underinsured motorist carrier of the victim. Thus, an uninsured motorist carrier may always have the opportunity to recover its costs directly from the tortfeasor, while the underinsured motorist carrier is forced to depend on its insured to seek the tortfeasor’s assets. The distinction in subrogation rights between the two insurers in this situation makes little sense and in effect makes the underinsured motorist carrier an excess policy carrier to the tortfeasor.
The current legislative scheme is also unfair because it may in certain cases, promote an incentive to underinsure. In such cases, the motoring public will be forced to pay for the impending increase in underwriting costs in the form of increased premiums. The Legislature has shown its intent to shift the costs of motor vehicle accidents from the motoring public to those more suited to bear this cost. (Rangel v. Interinsurance Exchange, ante, at p. 1 [14 Cal.Rptr.2d 783, 842 P.2d 82], citing California State Auto. Assn. Inter-Ins. Bureau v. Jackson (1973) 9 Cal.3d 859, 869 [109 Cal.Rptr. 297, 512 P.2d 1201] [In enacting the arbitration provisions of section 11580.2, subdivision (f), the Legislature intended to shift the costs of industrial injuries from the motoring public to the employer or workers’ compensation carrier.].) Although we are constrained by the language which solves con*334flicts between subdivision (p) and other subdivisions in favor of the provisions of subdivision (p) (§ 11580.2, subd. (p)), the Legislature could not have intended the motoring public to subsidize the motor insurance of those who have underinsured their assets. In sum, I urge the Legislature to study and consider the consequences of denying subrogation to the underinsured motorist carriers and to enact a suitable amendment to section 11580.2.

All further statutory references are to the Insurance Code unless otherwise indicated.