Bullard v. California State Automobile Ass'n

Opinion

On June 16, 2002, plaintiffs Lee Allan and Nina Bullard (the Bullards) were injured in a rear-end collision. The driver of the pickup truck that struck their car was uninsured. The trial court denied the Bullards’ petition to compel defendant California State Automobile Association (CSAA) to arbitrate the claim under the Bullards’ uninsured motorist

Lowry had a different recollection of this conversation. She did not dispute that the conversation took place, but did not recall that Possum told her the law office had already sent a written demand for arbitration. Had the Bullards made such a demand, Lowry would have forwarded the file to the litigation department in accordance with CSAA policy.

In June 2003, Lowry received a demand for settlement from the Bullards and spoke with Possum. On June 18, 2003, Lowry contacted the Bullards’ attorney, Arthur Morgan, in connection with their settlement demand. She asked him if the Bullards had filed suit against Hall. Morgan indicated that no lawsuit had been filed. He told Lowry he believed that the statute of limitations was two years from the date of the accident. Lowry responded that the statute of limitations was one year for first party claims. Morgan stated that the Bullards had demanded arbitration by letter in February 2003.

Lowry reviewed the letter dated February 10, 2003, and found no demand for arbitration. She contacted Morgan and informed him that the letter was insufficient to preserve the Bullards’ right to arbitration under the policy.

On June 19, 2003, (one year and three days after the collision) the Bullards filed their personal injury action against Hall, the driver of the pickup, and John Luntey, its owner.

On September 9, 2003, CSAA denied the Bullards’ uninsured motorist claim on the ground that the Bullards had failed to preserve their right to arbitrate the first party claim under the automobile liability insurance policy and section 11580.2. The Bullards responded that the Governor had just signed legislation extending the statute of limitations for uninsured motorist claims to two years, effective January 1, 2004. CSAA maintained that the change in law was not retroactive.

The Bullards filed their petition to compel arbitration on March 5, 2004. The trial court granted CSAA’s motion for relief under Code of Civil Procedure section 473 to file their opposition to the petition to compel arbitration, after the filing deadline had passed. Following oral argument on April 12, 2004, which was not reported, the trial court denied the Bullards’ petition. The court found that: (1) the amendment to section 11580.2 was not retroactive; (2) the February 2003 correspondence was “insufficient to lead a

DISCUSSION

The 2003 Amendment to Section 11580.2 Is Not Retroactive

The Bullards argue that the trial court misread the Legislature’s intent when it ruled that the 2003 amendment to section 11580.2, subdivision (i), that changed the limitations period from one to two years, was not retroactive.

In 2003, section 11580.2, subdivision (i) read in relevant part:

“(1) No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within one year from the date of the accident:

“(A) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction.

“(B) Agreement as to the amount due under the policy has been concluded.

“(C) The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested. Notice shall be sent to the insurer or to the agent for process designated by the insurer filed with the department.” (See Historical and Statutory Notes, 43 West’s Ann. Ins. Code (2005 supp.) foil. § 11580.2, p. 160.)

The Legislature amended section 11580.2, subdivision (i) in 2003, changing the limitations period from one to two years. (Stats. 2003, ch. 56, § 1.) The Governor approved the bill on July 14, 2003, and it became effective on January 1, 2004. (Ibid.; Cal. Const., art. IV, § 8, subd. (c), par. (1).)

There is no dispute that the Bullards failed to file suit against Hall, reach agreement as to the amount due with CSAA or demand arbitration within one year of the June 16, 2002, accident.

“A basic canon of statutory interpretation is that statutes do not operate retrospectively unless the Legislature plainly intended them to do so. [Citations.]” (Western Security Bank v. Superior Court (1997) 15 Cal.4th 232 , 243 [ 62 Cal.Rptr.2d 243 , 933 P.2d 507 ].) The presumption against retroactive application is grounded in principles of due process and proscriptions against ex post facto laws. (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828 , 841 [ 123 Cal.Rptr.2d 40 , 50 P.3d 751 ].) Thus, “a statute may be applied retroactively only if it contains express language of retroactivity or if other sources provide a clear and unavoidable implication that the Legislature intended retroactive application. [Citation.]” (Id. at p. 844.) The Legislature is well acquainted with these principles and uses clear language when it intends a statute to operate retroactively. (Balen v. Peralta Junior College Dist. (1974) 11 Cal.3d 821 , 828 [ 114 Cal.Rptr. 589 , 523 P.2d 629 ].)

The same legal principles apply to statutory amendments that enlarge limitations periods. “[U]nless the statute expressly provides to the contrary any such enlargement applies [only] to matters pending but not already barred.” (Douglas Aircraft Co. v. Cranston (1962) 58 Cal.2d 462 , 465 [ 24 Cal.Rptr. 851 , 374 P.2d 819 ]; see Krupnick v. Duke Energy Morro Bay (2004) 115 Cal.App.4th 1026 , 1029 [ 9 Cal.Rptr.3d 767 ] (Krupnick).) The rear-end collision occurred on June 16, 2002. The Bullards took no action to preserve their uninsured motorist claim before the one-year limitations period expired on June 16, 2003. The Governor signed Senate Bill No. 333, amending

Citing Mannheim v. Superior Court (1970) 3 Cal.3d 678 , 686 [ 91 Cal.Rptr. 585 , 478 P.2d 17 ], the Bullards contend that the presumption against retroactivity is subordinate to the more fundamental rule that a statute must be interpreted to effectuate the intent of the Legislature. They argue that the amendment to section 11580.2, subdivision (i) is subject to multiple interpretations precisely because the Legislature failed to indicate it intended retroactive application.

The Bullards are correct that in the absence of an express declaration of legislative intent regarding retroactive application, courts may consider other factors including the context of the legislation, its objective, public policy and the evils to be remedied. (Santangelo v. Allstate Ins. Co. (1998) 65 Cal.App.4th 804 , 814 [ 76 Cal.Rptr.2d 735 ].) However, these factors are of no assistance here.

To demonstrate context, the Bullards cite the legislative history of Senate Bill No. 333 (the amendment to 11580.2)—specifically, the proceedings before the Senate Judiciary Committee on April 22, 2003. The staff analysis cited the sponsor’s description of the need for the bill. First, it was “needed to conform the statute of limitations for filing an [uninsured motorist] claim to the new two-year period enacted last year by SB 688 [the amendment to Code of Civil Procedure 335.1], which became effective January 1, 2003. Under that law, a person injured by the negligence of another, such as a driver injured by another driver’s negligence, has two years to file a court claim against that negligent driver.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 333 (2003-2004 Reg. Sess.) Apr. 22, 2003, p. 2.) The bill sponsor of Senate Bill No. 333 emphasized that the inconsistency between the statutes of limitation could “ ‘lead to serious problems. If an insured driver at the time of the incident believes that the other driver is insured, she has no reason to make a claim against her own uninsured motorist policy. If the insured person is unable to resolve the claim against the negligent driver, she must file a lawsuit within two years. If the lawsuit is filed two years after [sic] the accident and the injured person learns in fact that the negligent driver was uninsured, it is too late to make a claim against her own policy, rendering the uninsured motorist coverage illusory.’ ” (Ibid.) The Bullards note that Senate Bill

There are several difficulties with the Bullards’ analysis. First, both Arrasmith and State Farm Mutual predate the January 2003 effective date of the amendment adding Code of Civil Procedure section 335.1 and do not address the impact of the new statute on former section 11580.2. A second, and related, problem is that the Bullards ignore the context of the 2002 legislation—the terrorist attacks of September 11, 2001. The uncodified portions of Senate Bill No. 688 read, in part:

“The Legislature finds and declares, as follows: [][]... [f] (b) Under current law, victims of personal injury and wrongful death are now required to file lawsuits within a year in order to meet unduly short statutes of limitations. Many such matters would be resolved without the need to resort to litigation if California’s statute of limitations permitted such actions to be filed within two years, as the vast majority of other states provide for a longer time to resolve claims short of litigation.

“(c) A prime example of the inequity caused by the one-year statute of limitations is that residents of California who were victims of the terrorist actions of September 11, 2001, must prematurely choose between litigation and federal remedies .... Extending the statute of limitations will reduce litigation in these cases as well . . . .” (Stats. 2002, ch. 448, § 1, subds. (b) & (c).)

The order is affirmed. Respondents shall recover their costs on appeal. (Cal. Rules of Court, rule 27(a).)

Sims, Acting R J., and Robie, J., concurred.

Appellants’ petition for review by the Supreme Court was denied August 17, 2005. Werdegar, J., did not participate therein.