Broberg, et al v. The Guardian Life Insurance Company of America, et al
Broberg, et al v. The Guardian Life Insurance Company of America, et al (March 2) 2009 DJDAR 2983 is a carefully-crafted decision from Division Seven of the Second Appellate District holding that a life insurance company’s disclaimers provided insufficient inquiry notice to trigger the running of the statute of limitations on a UCL claim. Guardian allegedly sold a life insurance policy by falsely representing that earnings from the policy would be sufficient to pay premium costs after the policy’s 11th year and by providing misleading marketing materials that represented out-of-pocket costs would be eliminated in the policy’s 12th year.  The plaintiffs claimed they were not aware of the falsity of these representations until they were billed for additional premiums after the 11th year. The trial court, relying on the four-year statute of limitations, dismissed the action with prejudice by concluding that the claims had accrued when the policy was first sold. The trial court also held that the plaintiffs could not establish justifiable reliance because of inconsistent language in the policy itself and in a footnote disclosure in the marketing material.
Applying the delayed discovery doctrine, the Court of Appeal reversed. It held, as a matter of law, that the placement of the disclaimers – “buried in a sea of same-sized capitalized print” – coupled with the absence of “any cautionary language” on the first page of Guardian’s policy illustration precluded such a determination. Justice Woods dissented, finding the footnotes to the policy illustration adequately highlighted and the disclaimers unambiguous. He emphasized language to the effect that the “figures depending on the dividends are neither estimated or guaranteed” and “depend on the company’s actual future experience.” The opinion is well worth studying for its insight into how California courts will dissect policy language.
March 3, 2009
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