California Court of Appeals, Fourth District, First Division
from a judgment of the Superior Court of San Diego County No.
37-2014-00019212-CU-IC-CTL, Judith F. Hayes, Judge. Affirmed.
Winters & Associates and Jack B. Winters, Jr., Georg M.
Capielo, Sarah D. Ball; Williams Iagmin and Jon R. Williams
for Plaintiffs and Appellants.
Offices of Daniel D. Murphy and Daniel D. Murphy for
California Advocates for Nursing Home Reform, Inc., as Amicus
Curiae on behalf of Plaintiffs and Appellants.
Grignon Law Firm and Margaret M. Grignon; Maynard Cooper
& Gale and C. Andrew Kitchen, Alexandra V. Drury, John C.
Neiman, Jr.; Noonan Lance Boyer & Banach and David J.
Noonan for Defendant and Respondent.
& Bird and Thomas A. Evans for American Council of Life
Insurers, as Amicus Curiae on behalf of Defendant and
appeal raises one fundamental issue: whether Insurance Code
sections 10113.71 and 10113.72 ("the
statutes"), which came into effect on January 1, 2013,
apply to term life insurance policies issued before the
statutes' effective date. In 2005, Protective Life
Insurance Company (Protective Life) issued William Patrick
McHugh a 60-year term life policy (the policy) that provided
for a 31-day grace period before it could be terminated for
failure to pay the premium. McHugh failed to pay the
premium due on January 9, 2013, and his policy lapsed 31 days
later. McHugh passed away in June 2013.
Mchugh's daughter, Blakely McHugh, the designated
beneficiary under the policy, and Trysta M. Henselmeier
(appellants) sued Protective Life for breach of
contract and breach of the implied covenant of good faith and
fair dealing, claiming Protective Life failed to comply with
the statutes' requirement that it provide a 60-day grace
period before it terminated the policy for nonpayment of
parties filed various trial court motions, and Protective
Life, relying largely on interpretations of the Department of
Insurance (the Department) argued that the statutes do not
apply retroactively to McHugh's policy and the claim. The
court rejected Protective Life's arguments and ruled that
the statutes applied to the claim. The matter proceeded to
jury trial and Protective Life prevailed. Appellants appeal
from both a special verdict in favor of Protective Life and
an order denying their motion for judgment notwithstanding
the verdict (JNOV).
to Code of Civil Procedure section 906, Protective Life
requests that we affirm the verdict on the additional ground
that the statutes do not apply to the policy and the trial
court erred by ruling to the contrary when it denied
Protective Life's motion for a directed verdict.
Appellants oppose the request, claiming that Protective Life
should have filed an appeal. We grant Protective Life's
request. "It is a general rule a respondent who has not
appealed from the judgment may not urge error on appeal.
[Citation.] A limited exception to this rule is provided by
Code of Civil Procedure section 906, which states in
pertinent part: 'The respondent... may, without appealing
from [the] judgment, request the reviewing court to and it
may review any of the foregoing [described orders or rulings]
for the purpose of determining whether or not the appellant
was prejudiced by the error or errors upon which he relies
for reversal or modification of the judgment from which the
appeal is taken.' 'The purpose of the statutory
exception is to allow a respondent to assert a legal theory
which may result in affirmance of the judgment.'"
(Hutchinson v. City of Sacramento (1993) 17
Cal.App.4th 791, 798.)
affirm the judgment on the additional ground that, as a
matter of law, the court erred by denying Protective
Life's motion for a directed verdict. As we discuss
below, the statutes apply only to policies issued or
delivered after January 1, 2013, and not to McHugh's
policy. Accordingly, we need not address the other
contentions appellants raise because they are all
premised on the erroneous assumption that sections 10113.71
and 10113.72 apply retroactively to the policy and claim.
Insurance Code states the Insurance Commissioner "shall
perform all duties imposed upon him or her by the provisions
of this code and other laws regulating the business of
insurance in [California], and shall enforce the execution of
those provisions and laws." (§ 12921.1, subd. (a).)
Furthermore, insurance companies must submit "[a]ll
policies, certificates of insurance, notices of proposed
insurance, applications for insurance, endorsements and
riders delivered or issued for delivery in [California] and
the schedules of premium rates pertaining thereto... [to] the
commissioner." (§ 779.8.) In short, insurance is a
regulated industry. The Department is charged with ensuring
that all policies issued in the State of California contain
every provision required by law.
discharging its statutory duties, the Department concluded
sections 10113.71 and 10113.72 apply only to insurance
policies issued after January 1, 2013. The Department
published its determination in a document titled, "SERFF
Instructions for Complying with [Assembly Bill No.]
1747," which states, "All life insurance policies
issued or delivered in California on or after [January 1,
2013] must contain a grace period of at least 60 days."
SERFF (System for Electronic Rate and Form Filing) is an
internet-based system that enables insurance companies such
as Protective Life to submit rate and form filings to the
Department for approval of insurance products and changes to
existing products. The Department mandates the use of SERFF
and provides regulatory guidance to insurers through SERFF,
including guidance for compliance with the statutes. The
court in Bentley v. United of Omaha Life Insurance
Co. (C.D. Cal. Sept. 14, 2016, No. ...