{"id":71,"date":"2012-09-06T17:11:48","date_gmt":"2012-09-06T21:11:48","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/insurancelaw\/?p=71"},"modified":"2014-09-08T13:02:26","modified_gmt":"2014-09-08T17:02:26","slug":"the-california-court-of-appeal-says-nice-try-to-attempt-to-overturn-the-california-supreme-courts-henkel-decision-based-on-an-1872-statute","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/insurancelaw\/2012\/09\/06\/the-california-court-of-appeal-says-nice-try-to-attempt-to-overturn-the-california-supreme-courts-henkel-decision-based-on-an-1872-statute\/","title":{"rendered":"The California Court of Appeal Says Nice Try To Attempt to Overturn The California Supreme Court\u2019s Henkel Decision Based on an 1872 Statute"},"content":{"rendered":"

On August 30, 2012, Division Three of the California Court of Appeal for the Fourth District put to rest a new argument devised by policyholders to attack the California Supreme Court\u2019s seminal consent-to-assignment ruling in Henkel Corp. v. Hartford Acc. & Indem. Co.<\/em>, 29 Cal.4th 934 (2003). See Fluor Corp. v. Superior Court<\/em> (Slip Opn. dated Aug. 30, 2012) (Fourth Dist. No. G045579)<\/p>\n

The Fluor<\/em> case involved the same consent-to-assignment clause at issue in Henkel<\/em>: \u201cAssignment of interest under this policy shall not bind the Company until its consent is endorsed hereon.\u201d (See Henkel<\/em>, supra, 29 Cal.4th at 943.) Upholding the plain meaning of that provision, the California Supreme Court held that consent-to-assignment clauses are generally valid and enforceable until the time that claims had been \u201creduced to a sum of money due or to become due under the policy.\u201d (Henkel, supra<\/em>, 29 Cal.4th at 944.)<\/p>\n

Henkel<\/em> controlled the outcome in Fluor<\/em>, which also involved an attempted assignment without the consent of the insurer. But the policyholder argued that the Henkel<\/em> court had missed an important statute. Fluor had unearthed an obscure Insurance Code provision enacted in 1872, which stated: \u201cAn agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss . . . \u201d (Ins. Code, \u00a7 520.) The statute had never been discussed by the Supreme Court in Henkel<\/em> or in any of the briefing in that case. Fluor called the statute a \u201ccontrolling pronouncement of the law.\u201d On that basis, it argued that Henkel<\/em> was wrongly decided and should be effectively disregarded.<\/p>\n

The Fourth District didn\u2019t buy the argument for several reasons. First, it noted that Henkel was binding authority on California appellate courts: \u201cWe have neither the power nor the inclination to reverse Henkel<\/em>.” (See Auto Equity Sales, Inc. v. Superior Court<\/em>, 57 Cal.2d 450, 455 (1962); Gwartz v. Superior Court<\/em>, 71 Cal.App.4th 480, 481 (1999) [\u201cStare decisis and all that stuff\u201d].) (Slip Opn. p. 8.)<\/p>\n

Second, it noted that Insurance Code Section 520 is<\/p>\n

one of the more obscure provisions of the California codes. No court has ever relied on it, and it has been cited only once, in passing, in Gillis v. Sun Ins. Office, Ltd<\/em>. (1965) 238 Cal.App.2d 408, a first party property insurance case involving an assignment of coverage after portions of the insured property (a water side restaurant) were damaged in a violent windstorm. The statute is unmentioned in either treatise or commentary.<\/p>\n

(Slip Opn. p. 11.)<\/p>\n

Finally, the Court pointed out that liability insurance didn\u2019t even exist in 1872 when the statute was written. \u201cWe will not ascribe to the dead hand of the 1872 Legislature controlling power over a medium that had yet to come into being.\u201d (Slip Opn. p. 3.) The Fourth District rejected the argument that when the 1872 statute was recodified in 1935 as part of the Insurance Code, it became a new legislative pronouncement governing liability insurance. Instead, the Court noted that the Insurance Code section 2 specifically disclaimed such a reading. Insurance Code section 2 provides: \u201cThe provisions of this code in so far as they are substantially the same as existing statutory provisions relating to the same subject matter shall be construed as restatements and continuations thereof, and not as new enactments.\u201d (Slip Opn. p. 14.)<\/p>\n

As the Court concluded: \u201cIf the rule of law in Henkel<\/em> is to be vitiated, the Legislature in the 21st century, not the Legislature in the 19th century, must do it.\u201d (Slip Opn. p. 17.)<\/p>\n","protected":false},"excerpt":{"rendered":"

On August 30, 2012, Division Three of the California Court of Appeal for the Fourth District put to rest a new argument devised by policyholders to attack the California Supreme Court\u2019s seminal consent-to-assignment ruling in Henkel Corp. v. Hartford Acc. & Indem. Co., 29 Cal.4th 934 (2003). See Fluor Corp. v. Superior Court (Slip Opn. … <\/p>\n

Continue reading “The California Court of Appeal Says Nice Try To Attempt to Overturn The California Supreme Court\u2019s Henkel Decision Based on an 1872 Statute”<\/span><\/a><\/p>\n","protected":false},"author":37,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[100,75,23,101,103,12,102,98],"ppma_author":[411],"class_list":["post-71","post","type-post","status-publish","format-standard","hentry","category-general","tag-assignment","tag-california-court-of-appeal","tag-california-supreme-court","tag-consent","tag-fourth-district","tag-insurance","tag-insurance-code-section-520","tag-killion"],"authors":[{"term_id":411,"user_id":37,"is_guest":0,"slug":"pjkillion","display_name":"Paul J. Killion","avatar_url":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-content\/uploads\/sites\/12\/2014\/08\/killionpaul-125x150.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts\/71","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/comments?post=71"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/posts\/71\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/media?parent=71"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/categories?post=71"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/tags?post=71"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/insurancelaw\/wp-json\/wp\/v2\/ppma_author?post=71"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}