In Rosenberg-Wohl v. State Farm Fire and Casualty Company, the Supreme Court today determines the time to file an insured’s action under California’s unfair competition law, a lawsuit the court says “challenges the insurer’s general practices in handling claims and through which the insured seeks only declaratory and injunctive relief on behalf of all policyholders.” It’s the UCL four-year statute of limitations, not the one-year provision in the Insurance Code — and similar language in the insured’s policy — for a “suit or action on th[e] policy.” Horvitz & Levy represents State Farm in the case, which arose from the denial of a claim for repairing a staircase in the plaintiff’s home.
The court’s unanimous opinion by Chief Justice Patricia Guerrero construes the plaintiff’s complaint as “requesting a declaration concerning State Farm’s allegedly widespread practices of summarily denying claims without proper investigation and not providing sufficiently clear explanations to policyholders regarding why their claims have been denied.” The court concludes the insured’s action is an “essentially ‘preventive’ ” one “to which neither the standard policy’s language [provided by statute], nor the policy reasons underlying the Legislature’s authorization of a one-year limitations period for filing certain kinds of claims-related lawsuits, applies.” Instead, the one-year statutory period is “concerned with causes of action that in some manner seek a financial recovery attributable to a claimed loss that was coverable under a policy,” the court says.
The opinion does, however, appear to leave open the question of whether a plaintiff seeking relief only for an insurance carrier’s general claims handling practices has standing to bring a UCL action.
The court reverses the First District, Division Two, Court of Appeal’s 2-1 published opinion. The court also “decline[s] to adopt the[ ] approach” of two contrary federal district court decisions.