Opinion
NOT TO BE PUBLISHED
Super. Ct. No. GIC858166
ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING
HUFFMAN, Acting P. J.
The opinion filed October 1, 2008 is modified as follows:
1. Page 13, first full sentence, the words "an underwriting manager" shall be added following the words "claims counsel." The sentence will now read: The record contains deposition testimony from other claims representatives, claims counsel, an underwriting manager, and outside coverage counsel, describing how these claims were processed and a no-coverage position taken.
2. Page 13, following the above sentence, the following sentence is added: The underwriting manager testified that the decision whether to require a special risk application to be filled out at renewal time was made on a case-by-case basis, in response to factors such as the insured's claims history with the Insurer, and the longevity of the lawyer's career and law firm, which might demonstrate whether the insured had any management or calendaring issues.
2. Page 27, after the last sentence, before heading C, the following paragraph is added:
Moreover, to the extent that Plaintiff now contends that Insurer failed to prove actual reliance on the alleged misstatements or omissions in the application, Plaintiff mistakenly relies upon inapposite tort cases involving fraud and deceit. (Schroeder v. Auto Driveway Co. (1974) 11 Cal.3d 908, 917; Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088; McLaughlin v. National Union Fire Insurance Co. (1994) 23 Cal.App.4th 1132, 1148.) The insurance statutes create entirely different standards for reliance upon answers in insurance applications, and this Insurer preserved its rights to dispute coverage when these claims were tendered. Where insurance policies are issued based upon false or incomplete disclosures, they may be rescinded on grounds of materiality of the information withheld, where the policies were void from the outset. This type of legal theory makes it unnecessary for subjective opinion testimony from an underwriter to be presented, to the effect that coverage would have been denied if the information given had been different. Also, this case was tried on declaratory relief theories, presenting issues of law, and not presenting a credibility contest between the insured and the Insurer, particularly looking backward to the time that the insurance contract was entered into. Although the record contains deposition testimony from several of Insurer's claims counsel, including its underwriting manager describing its usual application procedures, the lack of direct underwriter opinion testimony heredid not prevent declaratory relief from being issued in favor of the Insurer, as to the rights and duties of the parties under the insurance contract, when they are analyzed under the correct standards.
THERE IS NO CHANGE IN JUDGMENT.