206 Cal. App. 4th 463
Cal. Ct. App.2012Background
- Ortega, as class representative, sued Topa for two-tier physical damage coverage and alleged statutory violations in the policy and application.
- Application and policy disclosed a 'restricted policy' with 80% coverage for repairs at unapproved facilities, and required use of Approved PRFs for full coverage.
- Plaintiff claimed the disclosure was not prominent and the limited coverage violated Insurance Code §758.5(d)(1) and (d)(2).
- Trial court struck class allegations, determining only Class B (Steered Claimant Class) could be viable and that Maystruk controlled the statutory analysis.
- The court granted the motion to strike remaining class allegations, and Ortega appealed under the death knell doctrine.
- Appellate court affirmed, holding the application satisfied the disclosure requirement and the limited coverage did not constitute a statutory violation; class allegations for the remaining claims were properly stricken.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Topa’s application meet §758.5(d)(1) disclosure? | Ortega argues the application fails the prominence requirement. | Topa contends the application complies in the boxed certification section and format. | Application meets disclosure; satisfies prominence. |
| Does the limited physical damage provision violate §758.5(d)(2)? | Steered by PRF with non-OEM parts breaches statute by discounting damages. | Maystruk holds two-tier coverage without requiring 100% payment; no violation here. | No statutory violation; provision lawful. |
| Are class claims properly predicated and maintainable given the statutory holding? | Common issues predominate for class claims, including contract and UCL/CLRA theories. | lack of statutory violation and the need for individualized inquiries defeat class certification. | Common issues do not predominate; class allegations appropriately struck. |
Key Cases Cited
- Maystruk v. Infinity Ins. Co., 175 Cal.App.4th 881 (Cal. Ct. App. 2009) (two-tier coverage not a §758.5(d)(2) violation)
- Lebrilla v. Farmers Group, Inc., 119 Cal.App.4th 1070 (Cal. Ct. App. 2004) (class certification, common questions, and uniform parts issue)
- Haynes v. Farmers Ins. Exchange, 32 Cal.4th 1198 (Cal. 2004) (prominence and conspicuousness of coverage exclusions)
- Boghos v. Certain Underwriters at Lloyd’s of London, 36 Cal.4th 495 (Cal. 2005) (conspicuousness standard for policy exclusions)
- Zubia v. Farmers Ins. Exchange, 14 Cal.App.4th 790 (Cal. Ct. App. 1993) (conspicuous display of exclusions)
- Pineda v. Williams-Sonoma Stores, Inc., 51 Cal.4th 534 (Cal. 2011) (statutory questions reviewed independently of contract interpretation)
- Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (Cal. 2004) (abuse of discretion standard for class certification appeals)