Woodland Hills personal injury attorney Barry P. Goldberg is also known as “The Los Angeles Uninsured Motorist Attorney” because he has written extensively on the topic, has handled thousands of Uninsured and Underinsured Motorist claims, and is a frequent commentator on all things UM and UIM. Not surprisingly, Mr. Goldberg is regularly contacted by both out of state attorneys and California attorneys with questions about which laws and procedures apply with either California policies and out of state accidents or California accidents and out of state policies.
Many lawyers are confused with California Uninsured and Underinsured Motorist law and procedure to begin with. Instinct and first year law school Civil Procedure suggest that you apply the law of “where the accident occurred.” However, Uninsured and Underinsured Motorist law is a creature of contract even though it concerns “accidents” and is mandated by statute.
Often either an insurer or an insured will contend that the other state’s law should apply if that state has a more favorable feature. Examples of this may be 1) statute of limitations; 2) “stacking” of policies; or 3) no arbitration requirements.
Usually, the courts apply the so-called “governmental interest” analysis to decide the choice of law. (McCann v. Foster Wheeler LLC (2010) 48 Cal.4th 68, 87 (McCann); see Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 920 [stating that “governmental interest” analysis applies whether the dispute arises out of contract or tort].) “‘In brief outline, the governmental interest approach generally involves three steps. First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different. Second, if there is a difference, the court examines each jurisdiction’s interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law “to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state” [citation], and then ultimately applies “the law of the state whose interest would be more impaired if its law were not applied.” ’ ” (McCann, supra, 48 Cal.4th at pp. 87-88.)
For example, applying the governmental interest analysis to a statute of limitations, the courts first consider whether the applicable laws in each jurisdiction are different. In California, the insureds’ UM claim could be barred under California’s uninsured motorist statute (§ 11580.2) if the insureds did not satisfy a statutory condition precedent to accrual of a UM cause of action. Section 11580.2, subdivision (i) provides, “(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 two years 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.” Even seasoned personal injury lawyers mess this up!
Section 11580.2 sets forth a prerequisite for accrual of a UM cause of action against the insurer. (Spear v. California State Automobile Assn. (1992) 2 Cal.4th 1035, 1039, 1041.) The insured forfeits a UM claim against the insurer if he or she does not comply with the statutory mandates. (Blankenship v. Allstate Ins. Co. (2010) 186 Cal.App.4th 87, 94 (Blankenship).) A different result can happen under any number of other state’s rules. It can be a longer period of time or other communication to an insurer is sufficient to establish a claim.
In many cases, no actual conflict of laws exist because it involves enforcement of a contract. Where the parties do not designate the law governing their contract, the relevant contacts to be considered in a dispute involving a contract are those set forth in section 188, subdivision (2) of the Restatement Second of Conflict of Laws: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. (Stonewall Surplus Lines Ins. Co. v. Johnson Controls, Inc. (1993) 14 Cal.App.4th 637, 646 (Stonewall); Robert McMullan & Son, Inc. v. United States Fidelity & Guaranty Co. (1980) 103 Cal.App.3d 198, 205.)
In a case involving a contract of casualty insurance, the courts consider the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship to the transaction and the parties. (State Farm Mutual Automobile Ins. Co. v. Superior Court (2003) 114 Cal.App.4th 434, 448 [the principal location of the insured risk in a case of an automobile liability policy is the place where the insured vehicle will be garaged during most of the insurance period]; Stonewall, supra, 14 Cal.pp.4th at p. 646; Rest.2d Conf. of Laws, § 193.)
Most significantly, in a California insurance policy, California is the place where the insured vehicle is principally located. The place where the insured vehicle will be principally located “‘“has an intimate bearing upon the nature of the risk and the parties would naturally expect the local law of the state where the risk is to be principally located to apply. [Citations.]” ’ ” (Stonewall, supra, 14 Cal.App.4th at p. 646; see Rest.2d Conf. of Laws, § 193, com. c, p. 612; see also § 11580.2(a)(1) [California’s uninsured motorist statute applies to motor vehicles principally used in California].
Under most circumstances, the insureds and the insurer would reasonably expect California law to apply. (Stonewall, supra, 14 Cal.pp.4th at pp. 639-640, 648; Cal. Casualty Indemnity Exchange v. Pettis (1987) 193 Cal.App.3d 1597, 1610.) Moreover, California has a significant interest in the determination of issues arising under an insurance policy issued in California by a business that sold uninsured motorist insurance to California residents for a vehicle principally located in California. (McCann, supra, 48 Cal.4th at pp. 97-98; Stonewall, supra, 14 Cal.App.4th at p. 646; Rest.2d Conf. of Laws, § 193, com. c, p. 612.)
Based on the above, in-state and out of state lawyers should be cautious when dealing with California’s statute of limitations or other Uninsured and Underinsured Motorist issues. For California-issued policies, California law and procedure are likely to apply.