[00:00:11] Speaker 03:
Good morning.

[00:00:12] Speaker 03:
May it please the court.

[00:00:13] Speaker 03:
I'm Jeffrey Ehrlich from Mr. Scholar, the appellant, and I'd like to reserve four minutes of time for my rebuttal.

[00:00:20] Speaker 03:
The core issue before this court is whether emergency or the California Judicial Council emergency rule number nine operated to toll the one year limitations provision in Mr. Scholar's homeowners policy.

[00:00:37] Speaker 03:
And that limitations provision

[00:00:39] Speaker 03:
was required to be in the policy by virtue of California Insurance Code sections 2070 and 2071.

[00:00:45] Speaker 02:
So, Council, let me just ask it.

[00:00:50] Speaker 02:
I mean, at the end of the day, we agreed this is a state law question, right?

[00:00:53] Speaker 02:
It is indeed.

[00:00:53] Speaker 02:
Yeah.

[00:00:55] Speaker 02:
And so, I mean, I think what you came, you did a good job on reconsideration because I think this is your best argument is to say, well, this was mandated.

[00:01:05] Speaker 02:
Therefore, it's not a contractual provision.

[00:01:07] Speaker 02:
It's really akin to a statute of limitations.

[00:01:10] Speaker 02:
But where is the California case law that supports that theory?

[00:01:16] Speaker 02:
Because I didn't see any, I mean, I saw cases that applied this rule nine in different contexts, but I didn't see one that said it applied straight up to a contractual provision.

[00:01:31] Speaker 03:
I don't think there is a

[00:01:33] Speaker 03:
a case that says that rule nine applies to this particular limitations provision but let's take it out of this context and say any contractual provision your honor I I think

[00:01:50] Speaker 03:
I don't know that Rule 9 does apply to any contractual limitations provision or maybe more accurately to all contractual limitations provisions by virtue of the fact that there are limitations provisions.

[00:02:06] Speaker 03:
Our argument is that this particular contractual limitations provision has been repeatedly recognized by the California courts as more than just a contractual limitations provision because it is

[00:02:20] Speaker 03:
It's not subject to negotiation.

[00:02:25] Speaker 03:
It can't be attacked as ambiguous or difficult to understand because the legislature prescribes it.

[00:02:32] Speaker 03:
And as a result, the California cases have said that the provision in the fire insurance policy, which a homeowner's policy in California is,

[00:02:42] Speaker 03:
is a statute of limitations.

[00:02:44] Speaker 03:
And to that, you've got the cases that we've cited.

[00:02:47] Speaker 04:
Does this all come on the cases?

[00:02:49] Speaker 04:
Does this all come down to 20th century?

[00:02:51] Speaker 04:
Is that kind of the key case here?

[00:02:53] Speaker 03:
and the cases it relies on.

[00:02:55] Speaker 03:
Yes, Your Honor.

[00:02:56] Speaker 04:
Okay.

[00:02:57] Speaker 04:
But the other side makes, you know, points out that there are some differences between this provision nine we're talking about and section 340.9 that was at issue in 20th century in particular, that that provision had a, you know, had a clause that said notwithstanding any other provision of law,

[00:03:18] Speaker 04:
Or a contract.

[00:03:19] Speaker 04:
Or a contract.

[00:03:19] Speaker 04:
And that it also seemed like it would be non-operative if it didn't apply, you know, the 340.9 just wouldn't have any work to do if it didn't apply to the contract.

[00:03:29] Speaker 04:
So how do you deal with those two distinctions in 20th century?

[00:03:33] Speaker 04:
Why do you think they don't matter here?

[00:03:35] Speaker 03:
I guess I would say that if you took the or contract language out of 340.9,

[00:03:43] Speaker 03:
And then you ran the case through 20th century, the analysis.

[00:03:47] Speaker 03:
Because the question in 20th century that the court was grappling with is the insurance company was saying, you can't, this isn't a contract, and you can't change the terms of the contract without violating the federal and the state limits on the vested rights of contracts.

[00:04:06] Speaker 03:
And the Court of Appeals says no, it's a statute of limitations because it's mandated by the legislature, and the legislature has the right to change limitations periods without violating the impairment of contracts clause.

[00:04:18] Speaker 04:
Right, and I agree with you as far as that part of it goes.

[00:04:21] Speaker 04:
The opinion I will say, without disrespect to the California Court of Appeals, is a little confusing in its

[00:04:28] Speaker 04:
construction because it has this whole section that you're talking about, about divested rights, but then it does go on to then talk about some features of 340.9 that the court seems to treat as relevant to the question, the two features I just mentioned.

[00:04:42] Speaker 03:
I think that's fair, Your Honor, and obviously that statute was targeted to this limitations provision because this limitations provision was statutorily mandated.

[00:04:53] Speaker 03:
to be in every contract, insurance contract.

[00:04:56] Speaker 03:
So that's why I say that if you had deleted the language in 340.9 and it just said notwithstanding a provision of law, the case would have come out the same way.

[00:05:07] Speaker 03:
I don't think that the whole, you don't read 20th century,

[00:05:11] Speaker 03:
and see that it all hinges on the fact that the legislature included the provision or contract.

[00:05:17] Speaker 01:
Well, there is a distinction, though, a pretty clear distinction between contract and law.

[00:05:25] Speaker 01:
And by taking out the or contract language in the Northridge case, it seems to me it might have come out differently because the limitation period is set in the contract.

[00:05:41] Speaker 03:
because, your honor, the legislature requires that provision to be included in every contract.

[00:05:49] Speaker 03:
There's no way, it's not something that is bargained for, it's not something that can be negotiated by the parties.

[00:05:56] Speaker 03:
It's not something, and I know this from firsthand experience, because when you read the Lawrence case.

[00:06:01] Speaker 01:
Could you have a house in Northridge?

[00:06:02] Speaker 03:
No, I argued the Lawrence case, and I was arguing that it should be a notice statute.

[00:06:09] Speaker 03:
And the court said to me, in the opinion, no, it's a statutorily mandated

[00:06:18] Speaker 03:
requirement, and therefore you don't get to say it's ambiguous.

[00:06:22] Speaker 03:
You don't get to change it.

[00:06:23] Speaker 02:
Just to put a finer point on it, you're really, I mean, you're not disagreeing with the idea that if this is a contract, if this is a contract, a contractual term, you lose.

[00:06:35] Speaker 02:
But you're saying it's not a contractual term because it's required by law, and therefore it fits.

[00:06:43] Speaker 02:
It's really akin to a statute of limitations.

[00:06:48] Speaker 02:
I think that's how the only way you can know I I agree with your honor I I guess the where I am having difficulty is saying if it's a contract I lose it's undeniably in a contract right but you're saying we shouldn't treat it as a contractual term right I mean that that's what you're saying was a mere contractual yeah I guess I see what you're yeah okay so that's helpful so then I but I guess I come back to the

[00:07:13] Speaker 04:
how to read 20th century, because one way to read it is to say, one question, first question in the case is, can the legislature disrupt somebody's contract through legislation that alters the statute of limitations?

[00:07:29] Speaker 04:
Answer yes, because it's not a vested right, as you point out, it's a statutory based right.

[00:07:36] Speaker 04:
So can they do it?

[00:07:37] Speaker 04:
Yes.

[00:07:38] Speaker 04:
Second question, did they do it?

[00:07:39] Speaker 04:
And in the case of 340.9, the answer was yes.

[00:07:43] Speaker 04:
So I'm kind of at the did they do it here question.

[00:07:46] Speaker 04:
And what do we think in emergency rule nine shows us that they did do it?

[00:07:50] Speaker 04:
Because I think in the case of 20th century, there was some affirmative reason to think that that was true for the provision there.

[00:07:56] Speaker 04:
How about here?

[00:07:58] Speaker 03:
Here, Your Honor, I would say point to two things.

[00:08:02] Speaker 03:
First, you have the advisory committee comment to the rule, which says that the drafters intended the rule to be applied broadly.

[00:08:10] Speaker 03:
irrespective of where the limitations period appeared in the codes in California.

[00:08:16] Speaker 03:
And the second point I would make is that by 2020, there was a baseline of California law, 20th century, Lawrence, Poppy Ridge Partners.

[00:08:28] Speaker 03:
I mean, Lawrence, I'm sorry.

[00:08:31] Speaker 03:
The 20th century court looked at Lawrence and looked at Poppieridge Partners and said that based on those cases, in its view, it was already settled law in California, that the statutorily mandated provision in 2071 was a statute of limitations for

[00:08:50] Speaker 03:
all purposes.

[00:08:52] Speaker 03:
That was settled law already.

[00:08:54] Speaker 03:
And so when the drafters of the rule were trying to say all statute of limitations, there's no reason to believe based on that background that they would somehow believe that a statute of limitations like the one in everyone's insurance contracts that would govern every breach of contract case against an insurance company in California in the relevant period, every insurance bad faith case, would somehow be immune

[00:09:19] Speaker 03:
in light of the statutory, I'm sorry, the common law history of interpreting these statutes to 20, you know.

[00:09:27] Speaker 01:
So why did they leave out or contract language in the emergency rule?

[00:09:31] Speaker 03:
You know, Your Honor, I don't have a good answer.

[00:09:34] Speaker 03:
I mean, the lawyer in me says because they realized it wasn't necessary.

[00:09:37] Speaker 01:
Well, the judge in me says, you know, because they overlooked it.

[00:09:43] Speaker 01:
More to the point,

[00:09:47] Speaker 02:
the fact that they left it out does have some practical implication.

[00:09:51] Speaker 02:
Your statement is, your position is, it doesn't have practical implication for you.

[00:09:56] Speaker 02:
But if they had put in or contract, you'd be in here arguing, we're a contract, we're covered.

[00:10:02] Speaker 02:
They didn't put it in, so now you're saying, well, yeah, we're a contract, but we're also a statute of limitations.

[00:10:07] Speaker 02:
That is true.

[00:10:09] Speaker 03:
And so it's very possible.

[00:10:09] Speaker 02:
So you're just saying you're a hybrid, you are a hybrid provision that you win either way.

[00:10:15] Speaker 03:
Well, I mean,

[00:10:17] Speaker 03:
we win in the sense that the drafters during the COVID crisis wanted to extend statute of limitations for filing civil lawsuits.

[00:10:26] Speaker 03:
And so we fall within that category.

[00:10:28] Speaker 02:
And yes, that when the- Right, but you can't rely on that because that provision clearly covers more than those that are protected by the statute.

[00:10:41] Speaker 03:
My train of thought when I was trying to circle back to is Judge Talman's question, which is that

[00:10:47] Speaker 03:
And actually the question that you began with, the argument with, which is that I'm not going to argue and I don't have to argue and I wouldn't argue that because the drafters left out or contract that you should just ignore that for every contractual term.

[00:11:04] Speaker 03:
that the inference is they left it out because purely contractual negotiated limitations periods and contracts didn't seem to be they didn't want to open up every single one of those but I do think that they were thinking based on the history of California law that something that is required by statute to be included and that cannot be negotiated away

[00:11:28] Speaker 03:
and can't be attacked is unlawful.

[00:11:31] Speaker 02:
See, and that's the problem, is I'm not seeing the California case law that supports.

[00:11:37] Speaker 03:
Well, Your Honor.

[00:11:38] Speaker 02:
You say 20th century does.

[00:11:40] Speaker 03:
Well, OK, let's go to the cases it relied on.

[00:11:42] Speaker 03:
You've got the Poppia Ridge case, and that's a bad faith case, or breach of contract case under 2071.

[00:11:51] Speaker 03:
And the insurance company didn't plead the statute of limitations as an affirmative defense.

[00:11:58] Speaker 03:
The court of appeal says, California requires that that statute of limitations be pleaded.

[00:12:05] Speaker 03:
And the insurance company says, yeah, but it's in a contract.

[00:12:09] Speaker 03:
And our general denial put in essentially operated to deny that all of the conditions and terms of the contract had been complied with.

[00:12:17] Speaker 03:
And the court said, not good enough.

[00:12:20] Speaker 03:
Because it's a statutorily mandated limitations defense, you had to plead it.

[00:12:25] Speaker 03:
And therefore, you've waived it by not pleading it.

[00:12:27] Speaker 04:
Can I ask you, you made a good point about the baseline of the law.

[00:12:33] Speaker 04:
That may have been your words, but I'll use them, about the development of the law since 20th century.

[00:12:38] Speaker 04:
Are there California cases after 20th century that you would direct us to?

[00:12:45] Speaker 03:
Well, the Blue Shield case that we talk about

[00:12:49] Speaker 03:
I mean, it's not directly a big point there, because first it wasn't 2071 case.

[00:12:53] Speaker 03:
It was the disability insurance statute that the Ninth Circuit dealt with in Lew Ellers.

[00:13:01] Speaker 03:
And the parties there had exercised, the insurer had changed the provision.

[00:13:07] Speaker 03:
And as a result, the argument was it was ambiguous.

[00:13:13] Speaker 03:
But the court clearly looked at Lew Ellers and said,

[00:13:20] Speaker 03:
the legal analysis that it relied on, Mies and in investors, didn't support the conclusion that this is not, this mandated provision is not a statute of limitations, that the law is that it is a statute of limitations.

[00:13:32] Speaker 03:
It recognized what 20th century said, and then it went on to say, but the issue here is different because it's ambiguous.

[00:13:39] Speaker 03:
So we have essentially, there is a California court of appeal opinion that is critical of the analysis of the, in the Orissa case and Lou Ehlers.

[00:13:49] Speaker 03:
and says it doesn't comport with California law.

[00:13:51] Speaker 03:
I'd like to reserve the balance of my time, if I may.

[00:13:54] Speaker 03:
Thank you.

[00:14:01] Speaker 00:
Good morning, Honors.

[00:14:01] Speaker 00:
May it please the Court?

[00:14:02] Speaker 00:
My name is Matt Beetzel.

[00:14:03] Speaker 00:
I represent State Farm.

[00:14:05] Speaker 00:
And the first point I'd like to address is that I think it is a mischaracterization of Section 2071 to say it's mandated.

[00:14:13] Speaker 00:
It expresses what the minimum requirement is.

[00:14:18] Speaker 00:
So in other words, an insurance company does not have to have a one-year contractual limitations in the policy.

[00:14:26] Speaker 00:
What 2071 says is that if you do have a contractual limitations in the policy,

[00:14:30] Speaker 00:
It cannot be any less than one year.

[00:14:33] Speaker 00:
So one way to look at this, I think, is that it's not self-executing.

[00:14:38] Speaker 00:
If there was... Is that what your argument hinges on?

[00:14:41] Speaker 02:
If it's self-executing, do you agree that this then becomes a statute of limitations provision?

[00:14:46] Speaker 00:
No, Your Honor, I think it's just one element to establish how this contractual limitations differs from a statute of limitations.

[00:14:55] Speaker 02:
So, if it's not in the policy, 2071...

[00:15:02] Speaker 02:
period, you'd be saying that's still a contractual requirement, it's not a statute of limitations.

[00:15:09] Speaker 00:
Yes, I think that's still accurate, Your Honor, and I'm just trying to separate the difference between the two, because you also have things like the tolling applies differently than a statute of limitations applies.

[00:15:19] Speaker 00:
There's no tolling of a standard statute of limitations as this contractual limitations is told.

[00:15:26] Speaker 00:
The accrual process is different for statute of limitations than it is as it relates to the contractual limitations.

[00:15:33] Speaker 00:
And so I think those things together show that this is not statute of limitations of contractual limitations.

[00:15:41] Speaker 00:
And then when we turn to what should be the plain reading of emergency rule nine, I think Your Honors properly pointed out that it doesn't say that it applies to contract.

[00:15:49] Speaker 00:
And the interesting thing about all of those emergency rules

[00:15:53] Speaker 00:
one through 11, I think it is, is that they do address many different things, which implies the intent to leave out contracts.

[00:16:02] Speaker 00:
So they have things like foreclosure proceedings on lawful detainers, juvenile dependency, juvenile delinquency.

[00:16:10] Speaker 02:
I mean, I think you're right about that.

[00:16:12] Speaker 02:
And I don't think opposing counsel is disagreeing with that.

[00:16:16] Speaker 02:
He's saying we're a high.

[00:16:18] Speaker 02:
He's got a hybrid provision that is both a contract but also a statute of limitations.

[00:16:23] Speaker 02:
And therefore it is covered by this.

[00:16:27] Speaker 02:
He agrees that other contractual provisions that are pure contracts aren't.

[00:16:33] Speaker 02:
So how do you address that?

[00:16:35] Speaker 00:
Well, I address it by disagreeing that this is a hybrid.

[00:16:40] Speaker 00:
This is a contractual limitations and the California law that is most on point.

[00:16:45] Speaker 02:
That's what I wanted to get to because I mean, ultimately, that's a state law question.

[00:16:49] Speaker 00:
Yes.

[00:16:50] Speaker 02:
And so what I mean, does 20th century really address that issue?

[00:16:55] Speaker 00:
No, I don't think it does, your honor, because 20th century was limited to that particular fact.

[00:17:00] Speaker 00:
of what was happening after the Northridge earthquake.

[00:17:04] Speaker 04:
Hold on, I do think 20th century would resolve the question of whether we treat contract provision like this as sort of a

[00:17:16] Speaker 04:
statutory hybrid because it it very clearly says it is it says that the legislature can come in and essentially alter somebody's contract through action and that's what happened in and in section three forty point nine which is an issue in twentieth century so i guess i have some issue with the first part of your argument seems to me the harder that uh... excuse me the the where the case comes down to is well what was really going on in

[00:17:41] Speaker 04:
this emergency rule nine, and how much did the legislature need to say in this rule to get it into a spot where it could change the limitations period in the contract?

[00:17:52] Speaker 04:
Because it clearly could do that.

[00:17:54] Speaker 04:
The question to me is, did it?

[00:17:57] Speaker 00:
Well, and to address that question, Your Honor, I think it's important to contrast 20th century case with the Great American case.

[00:18:05] Speaker 00:
The Great American case clearly says

[00:18:07] Speaker 00:
that the contractual limitations is not a statute of limitations.

[00:18:11] Speaker 00:
That's cited in our brief.

[00:18:13] Speaker 00:
And that was taken more on a face value analysis of... Wait, it said... Can you repeat what you said?

[00:18:20] Speaker 00:
It said that... It said that the... To quote that Great American case, it says, limitation periods in insurance policies are not statutes of limitations.

[00:18:30] Speaker 00:
They're contractual limitations.

[00:18:32] Speaker 02:
Right, but that was... Was that one that was mandated by the legislature?

[00:18:35] Speaker 00:
Well, it was a homeowner's policy, so it would have been mandated under 2071 to the extent that's considered a mandate.

[00:18:44] Speaker 00:
Again, I don't think it is a mandate, but.

[00:18:46] Speaker 02:
But you're saying it would be mandated in the, I mean, it would be required, whatever you want to say, in the same way that this one was.

[00:18:54] Speaker 00:
Exactly, Your Honor.

[00:18:55] Speaker 02:
And they said that it was still a contractual provision.

[00:18:57] Speaker 00:
That's correct, because they were dealing.

[00:18:59] Speaker 02:
Predated or post-dated 20th century.

[00:19:03] Speaker 00:
It predated 20th century and the facts of that case are a little bit odd because there are two insurance companies Going against each other where the inch one insurers standing in the shoes of the insured through a subrogation action and the second insurer said no, you can't pursue subrogation because of this

[00:19:24] Speaker 00:
contractual limitations period in the Court of Appeal agreed with that.

[00:19:27] Speaker 04:
Let's assume that under 20th century this provision is a statutory hybrid which the legislature could alter if it wanted to and affect these parties contractual relationship.

[00:19:41] Speaker 04:
I asked Mr. Erlich about two features of 20th century that were a little different than this case.

[00:19:47] Speaker 04:
And he came back and made two points in response.

[00:19:50] Speaker 04:
He said, first of all, look at the advisory committee notes.

[00:19:53] Speaker 04:
Those tell us that this was meant to be broadly.

[00:19:56] Speaker 04:
Second of all, he said, you have to understand that there had been basically a kind of solidifying of the law in the 20 plus years since 20th century that made it concrete that this was a

[00:20:09] Speaker 04:
statutory hybrid.

[00:20:10] Speaker 04:
And so those were his answers to me on that point, which are fair points.

[00:20:14] Speaker 04:
So how do you respond on those?

[00:20:16] Speaker 00:
Well, as to the second point, Your Honor, I don't think that that's accurate about it's been a solidifying of the law.

[00:20:22] Speaker 00:
And I think that is why the 20th century court went to such great lengths to talk about the legislative history.

[00:20:28] Speaker 00:
because of the fact that it wasn't clear that it was a hybrid statute that would apply to Code of Civil Procedure, Section 340.9, the court had to look into what the legislature intended there.

[00:20:42] Speaker 00:
And so I think that actually, in that regard, 20th century helps our position because the court is saying,

[00:20:49] Speaker 00:
in essence, but for this legislative history, we don't think that this would apply for 340.9.

[00:20:55] Speaker 00:
And it was clear in that situation that the legislature intended to apply 340.9 to the contractual limitations, and that's why the court did that.

[00:21:06] Speaker 00:
As to the to the through the first point I also think the advisory committee notes on emergency role nine are in our favor as well because they specifically do not mention anything that would be relating to contract or otherwise they reference other particular parts of the of the code such as the family law code and

[00:21:32] Speaker 00:
some other provisions, but nowhere do they say that it's intended to apply to contract.

[00:21:38] Speaker 00:
And I think most importantly maybe is the California Supreme Court's most recent analysis in the Rosenberg Wall case, which we provided in a subsequent letter brief to your honors, in which the court was given numerous opportunities there to say,

[00:21:54] Speaker 00:
These are the same things.

[00:21:56] Speaker 00:
This contractual limitation is a statute of limitations.

[00:22:00] Speaker 00:
They did not adopt any of the language of 21st century.

[00:22:06] Speaker 00:
And in fact, in one of the footnotes, they specifically say that it's not clear that it's equivalent for all purposes.

[00:22:13] Speaker 00:
And I think that that's the key provision here because 20th century was applying it for a limited purpose.

[00:22:20] Speaker 00:
And the California Supreme Court declined to apply

[00:22:23] Speaker 00:
it as a statute of limitations in all purposes.

[00:22:27] Speaker 00:
So putting all, and that's a recent opinion from the California Supreme Court, so obviously 20th century and these other cases predate all of that.

[00:22:37] Speaker 00:
So I think putting all that together, the

[00:22:41] Speaker 00:
The concept of what 20th century was doing was limited for that purpose, because it was needed for that purpose.

[00:22:47] Speaker 00:
So in other words, I think that the court in 20th century came back and said, this may have been written in a bit of a sloppy manner, because this was intended to address these contractual limitations.

[00:23:00] Speaker 00:
So we're going to correct it and say the legislative history says that, so we're going to apply it that way.

[00:23:07] Speaker 00:
But they were limited to just that point.

[00:23:09] Speaker 00:
And the subsequent cases that talk about 20th century didn't pick up on that fine point of what 20th century was doing.

[00:23:16] Speaker 00:
And so they just applied it separately.

[00:23:18] Speaker 00:
But we have the clear language in Great American saying it's not a contractual, it's not a statute of limitations.

[00:23:25] Speaker 00:
It's a contractual limitations.

[00:23:27] Speaker 00:
on liability, in other words, meaning it's a condition precedent to having liability under the policy, and therefore it's not impacted by emergency rule nine.

[00:23:40] Speaker 00:
The one other point I'd like to address briefly, unless Your Honor has any other questions, is the standard of review.

[00:23:46] Speaker 00:
I think we have an interesting situation here because none of these arguments about 2071 or 20th century were presented in the opposition to the motion for summary judgment.

[00:23:55] Speaker 00:
They were only in the motion for reconsideration, which your honors, as you well know, have a different standard of review for that.

[00:24:01] Speaker 00:
So I think that the district court's evaluation of these issues.

[00:24:05] Speaker 02:
Is this still a legal question?

[00:24:07] Speaker 02:
I mean, ultimately, these are all legal questions.

[00:24:11] Speaker 02:
So I'm not sure why the standard of review is different.

[00:24:14] Speaker 00:
Well, I tend to agree generally with that, Your Honor, but I think that what the district court noted was important is that the motion for reconsideration isn't the time to bring up new arguments.

[00:24:25] Speaker 00:
It's not the time to bring up a new legal issue.

[00:24:28] Speaker 02:
Are you sort of, are you dropping your waiver argument and now couching it as it's not waiver, but we get more deference?

[00:24:36] Speaker 00:
uh... maybe piggybacking on that argument in your honor.

[00:24:39] Speaker 00:
Fair enough.

[00:24:40] Speaker 02:
They sort of piggyback.

[00:24:42] Speaker 02:
You get to piggyback.

[00:24:43] Speaker 00:
And I do think that the district court judge gets more deference here because it was on the motion for reconsideration.

[00:24:50] Speaker 00:
And unless your honors have any other questions, thank you for your time.

[00:24:52] Speaker 04:
Before you sit down, just because we don't have cases that involve very valuable masks and statues, I just ask out of curiosity, why was the claim denied?

[00:25:01] Speaker 00:
The claim was denied for a few different reasons, primarily because there was a material misrepresentation in the policy.

[00:25:09] Speaker 00:
So in other words.

[00:25:10] Speaker 00:
What was the nature of the misrepresentation?

[00:25:12] Speaker 00:
That they thought it was a faked or staged theft.

[00:25:16] Speaker 00:
So basically, it was denied for what we would

[00:25:19] Speaker 00:
colloquially call insurance fraud, although the policy doesn't describe it that way.

[00:25:24] Speaker 00:
There was also some other basis for denial really related to the failure to cooperate and providing certain information.

[00:25:31] Speaker 02:
If you lost on this with that, that would have to go to a jury.

[00:25:36] Speaker 02:
The fraud question.

[00:25:38] Speaker 00:
uh... not necessarily your honor because that we still had other arguments in our summary judgment including the fraud.

[00:25:43] Speaker 02:
And that hasn't been addressed yet.

[00:25:45] Speaker 02:
That's correct.

[00:25:45] Speaker 02:
So that would have to go forward.

[00:25:48] Speaker 02:
I guess one final question is this I mean are we at the beginning of like a flood of cases that are going to come in on this rule night?

[00:25:56] Speaker 02:
Like normally we wouldn't publish in a state law question and I'm wondering if we need to

[00:26:05] Speaker 02:
to the extent you know, take into consideration other case.

[00:26:08] Speaker 02:
I know there's a few other cases percolating.

[00:26:10] Speaker 02:
I just don't know how analogous they are to this.

[00:26:12] Speaker 02:
Can you fill in the gaps on that at all?

[00:26:15] Speaker 00:
Only by speculation.

[00:26:16] Speaker 00:
And my speculation would be no, I don't think this is a flood because we're at four years from when this emergency rule nine expired.

[00:26:26] Speaker 00:
So by, you know, most in insurance contract context,

[00:26:31] Speaker 00:
Regardless of the one year for a breach of contract, it's going to be four years.

[00:26:34] Speaker 00:
So I think that this is probably the only case that relates to this particular issue, would be my guess.

[00:26:40] Speaker 00:
And that's just my guess.

[00:26:41] Speaker 01:
It is kind of a usual case, though, with an odd piece of art that's left in the parking lot at Costco for 15 minutes and suddenly disappears.

[00:26:54] Speaker 01:
Yes.

[00:26:55] Speaker 01:
And then the insurance says it's actually worth $126,000.

[00:27:01] Speaker 00:
Yes, it is an unusual case and the video of, there was a video of the purported theft and it's quite unusual, to put it mildly.

[00:27:11] Speaker 00:
Okay.

[00:27:12] Speaker 00:
Thank you.

[00:27:12] Speaker 00:
Thank you, Your Honors.

[00:27:19] Speaker 03:
Your Honors, if the insurance policy in this case had omitted

[00:27:25] Speaker 03:
the statute of limitations.

[00:27:27] Speaker 03:
It's a simply not included one.

[00:27:29] Speaker 03:
That wouldn't mean that the statute of limitations would be four years under the general statute of limitations because it was a written contract and California has a four-year limitation provision.

[00:27:41] Speaker 03:
The fact, whether it's in the policy or not,

[00:27:45] Speaker 03:
It's mandated.

[00:27:46] Speaker 02:
You get a year.

[00:27:46] Speaker 02:
If it doesn't say anything.

[00:27:48] Speaker 02:
Your point is if it doesn't, if it didn't say anything.

[00:27:50] Speaker 03:
It'd be a one year statute.

[00:27:51] Speaker 02:
It'd be a one year statute.

[00:27:52] Speaker 02:
By virtue of law.

[00:27:55] Speaker 02:
By virtue of law.

[00:27:55] Speaker 03:
Right.

[00:27:57] Speaker 03:
So that's the statutory limitations.

[00:28:00] Speaker 03:
And then I don't want to lose track of the language in 20th century on page 1272, quote, insurance code sections 2071's mandated provisions are treated identically to statutes of limitations.

[00:28:12] Speaker 03:
And then later on the same page, it's properly treated as a statute of limitations.

[00:28:17] Speaker 03:
No court has criticized that.

[00:28:19] Speaker 03:
No court has said that's incorrect since that was decided.

[00:28:24] Speaker 03:
And so, again, going back to the drafting history of the Judicial Council, in light of those statements, it makes sense that they would say all statute of limitations are told and that they wouldn't have to specify for insurance contracts because the law says in California, and all of it, trial courts are required in California to follow that law under stare decisis.

[00:28:47] Speaker 04:
Well, yeah, and I guess the question would be,

[00:28:49] Speaker 04:
If 20th century had ended there, this sounds like a very good argument, but then it goes on to talk about some of the details of the Northridge provision and the two features you and I were talking about earlier.

[00:29:03] Speaker 04:
So how do you explain that part of the 20th century

[00:29:06] Speaker 04:
decision because it's almost like it would be unnecessary on your reading of the case.

[00:29:10] Speaker 03:
Well, it might have been more than was required, but first of all, Justice Krosky was a very thorough justice and had a reputation as sort of the preeminent author of insurance opinions.

[00:29:21] Speaker 03:
And at the time, this was a huge issue.

[00:29:25] Speaker 03:
The legislature had gone back and essentially revived

[00:29:28] Speaker 03:
all these cases, and then this was the first test case about whether this was constitutional or not.

[00:29:35] Speaker 03:
And so I think the court wanted to be very thorough.

[00:29:37] Speaker 03:
It wasn't just one, it wasn't the major analysis in the case on the contract clause issue.

[00:29:45] Speaker 03:
There were lots of issues.

[00:29:46] Speaker 02:
You're saying it's kind of an alternative holding.

[00:29:48] Speaker 03:
Yes, Your Honor.

[00:29:50] Speaker 03:
So I had thought this would be a relatively easy case for the court.

[00:29:54] Speaker 03:
And if I misjudged that, I might suggest that this might be an appropriate case for the court to consider certifying to the California Supreme Court.

[00:30:02] Speaker 03:
And with that, I would urge you just to reverse.

[00:30:05] Speaker 03:
Thank you.

[00:30:06] Speaker 02:
Thank you.

[00:30:08] Speaker 02:
Thank you both for your arguments in the case.

[00:30:10] Speaker 02:
That case is now submitted.