In a case arising from a wrongful death action related to an automobile collision, the Ninth Circuit on Monday certified to the California Supreme Court a question about how long commercial insurance policies remain in effect under the state’s Motor Carriers of Property Permit Act.

Judge Diarmuid O’Scannlain phrased the question in the court’s certification order as follows:

Under California’s Motor Carriers of Property Permit Act, Cal. Veh. Code §§ 34600 et seq., does a commercial automobile insurance policy continue in full force and effect until the insurer cancels the corresponding Certificate of Insurance on file with the California Department of Motor Vehicles, regardless of the insurance policy’s stated expiration date?

The case begins with a commercial auto insurance policy issued to José Porras, a California commercial truck driver, by United Financial Casualty Company. The policy went into effect in May 2013, and United submitted a certificate of insurance to the California Department of Motor Vehicles (DMV) on Porras’s behalf. In April 2015, the United policy lapsed when Porras failed to renew it, but his certificate of insurance remained on file with the DMV because of a United clerical error.

Porras then became insured under a commercial auto policy issued by Allied Premier Insurance, which took effect a day after his United policy lapsed. Allied also submitted a certificate of insurance to the DMV on Porras’s behalf.

In September 2015, Porras was involved in a vehicle collision in Rialto, and the other driver died as a result. The driver’s parents sued Porras for wrongful death in state court. Allied defended Porras and ultimately settled the lawsuit for $1 million. United declined to defend Porras or contribute to the settlement.

Allied then sued United in a separate action in a California state court, seeking to recover half of the $1 million it paid to settle the wrongful death suit against Porras. Allied argued that because United failed to cancel the certificate of insurance it filed with the DMV on Porras’s behalf, the United policy remained in effect at the time of the collision.

United removed the suit to federal court, and the district court sided with Allied, entering a $500,000 judgment against United.

O’Scannlain wrote that the case turns on the proper interpretation of California’s Motor Carriers of Property Permit Act (MCPPA). “If the MCPPA requires a commercial auto insurance policy to remain in effect indefinitely until the insurer cancels the Certificate of Insurance on file with the DMV, then Allied must prevail,” he wrote. “If not, United must prevail.”

The MCPPA was enacted in 1996 to replace the Highway Carriers’ Act (HCA). The new law shifted the responsibility for regulating California commercial drivers from the state’s Public Utilities Commission to the DMV. O’Scannlain noted that the ambiguity in this case is as to whether the MCPPA made other changes to the HCA’s regulatory framework.

Under the now-repealed HCA, the California Supreme Court had made clear that a commercial driver’s insurance policy remained in effect, regardless of its stated expiration date, until the insurer provided written notice to the Public Utilities Commission that the policy was canceled. But O’Scannlain wrote that the Ninth Circuit has “reason to doubt” that the same principle applies to the currently effective MCPPA, as the new statute’s language differs from that of the old one.

“There is no published California case law addressing this question — indeed, there appear to be no California precedents interpreting the MCPPA’s cancellation provisions at all,” O’Scannlain wrote. “Accordingly, we seek guidance from the California Supreme Court regarding the proper construction of the new statute.”

The case is Allied Premier Insurance v. United Financial Casualty Company, case number 20-55099, in the U.S. Court of Appeals for the Ninth Circuit.

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