Publication

  • Home
  • /
  • Publications
  • /
  • 2012
  • /
  • Entin v. Superior Court? Disability Insurer's Election To Pay Benefits During Declaratory Relief...
Search Publications




August 2012

Entin v. Superior Court? Disability Insurer's Election To Pay Benefits During Declaratory Relief Action On Scope Of Coverage Did Not Preclude Insured From Jury Trial

Insurer's Declaratory Relief Action Raised Factual Questions Pertaining To Contractual Rights, Entitling Plaintiff To A Jury Trial

(August 20, 2012) ___ Cal. App. ____; 12 C.D.O.S. 9498

The California Court of Appeal, Second Appellate District, granted an insured’s petition for writ of mandate and directed the trial court to vacate its order denying the insured’s request for a jury trial, and to enter an order granting the request.  The Court of Appeal concluded the trial court erred in denying the insured a jury trial because the insurer’s declaratory relief action raised factual questions pertaining to contractual rights, which are legal in nature.  That the insurer elected to pay the insured benefits while pursuing its declaratory relief action did not transform the nature of the dispute into one arising in equity.

Allen Entin purchased disability income insurance policies that provided benefits in the event that he became totally disabled.  Entin filed a claim alleging that migraine headaches had rendered him incapable of performing the substantial and material duties of his occupation as an obstetrician and gynecologist.  Entin’s insurer, Provident Life and Accident Insurance Company, reviewed the claim and began paying Entin disability benefits under a reservation of rights. 

Provident then filed a declaratory relief action seeking a determination that Entin was not entitled to disability benefits.  Provident alleged the parties disputed whether the evidence showed Entin was totally disabled within the meaning of the policies.  Although Provident did not believe Entin was totally disabled, it agreed to continue to pay Entin disability benefits until the court issued a determination of the parties’ rights and responsibilities.   Provident also agreed not to attempt to recoup any sums paid prior to the entry of judgment. 

The parties submitted opposing briefs addressing Entin’s right to a jury on Provident’s declaratory relief claim.  Entin argued he had a right to a jury because the case raised factual issues concerning his entitlement to contractual insurance benefits.  Provident argued there was no right to a jury because the underlying claim and relief sought – identification of a prospective right under the insurance policies – is equitable in nature.  The trial court agreed with Provident and ordered that Entin did not have a right to a jury in light of Provident’s ongoing payments under the policies. 

Entin filed a petition for writ of mandate. He sought an order from the Court of Appeal directing the superior court to vacate its order granting a court trial and instead entering an order granting Entin’s motion for a jury trial. 

The Court of Appeal granted Entin’s petition. It concluded Provident’s declaratory relief action was legal in nature, not equitable.  It did not raise a dispute over the proper construction of the policies.  Instead, the parties sought a determination of whether Entin was “totally disabled” within the meaning of those policies.

Previous cases had held that an insured was entitled to a jury trial where the insurer sought a declaration that no coverage exists under its policies.  Provident argued those cases did not apply, however, because it was continuing to pay Entin’s disability payments throughout the case.  Provident argued the action was necessarily equitable in nature, because Entin had no right to pursue a breach of contract claim against Provident in these circumstances.

The Court of Appeal disagreed.  The question of whether Entin could have pursued a breach of contract claim was not controlling.  Instead, the proper inquiry was whether the issues raised in the case were legal or equitable in nature.  Where, as here, the “gist” of the case involves the resolution of factual issues pertaining to a plaintiff’s contractual rights, the defendant is entitled to a jury regardless of whether that underlying legal claim remains “inchoate.”

Based on the allegations in Provident’s complaint, the Court found the rights involved in the case were legal in nature.  The legal nature of Provident’s claim was further demonstrated by the fact that no form of equitable claim would have permitted Provident to obtain a binding ruling as to whether its decision to deny Entin future benefits would constitute a breach of the policies.  Instead, Provident would have had to decide whether to pay Entin’s claim or to deny it, thereby forcing Entin to pursue a legal claim for breach of contract (a claim for which Entin would be entitled to a jury).  Provident could not use a declaratory relief action to circumvent that right.

The Court also rejected Provident’s additional argument that its claim was akin to a request for specific performance, which is an equitable remedy.  In addition the Court concluded the absence of a claim for monetary damages did not preclude a right to a jury.  Although the mode of relief is a factor that may be considered when assessing the right to a jury trial, it is not determinative.  Provident’s declaratory relief action involved the resolution of disputed factual issues regarding Entin’s entitlement to contract benefits.  The mode of relief requested by Provident did not alter the legal nature of those rights. 

The Court of Appeal thus granted Entin’s petition for writ of mandate and directed the trial court to vacate its order denying Entin’s request for a jury trial and enter a new order granting the request.

Click here for the opinion.

This opinion is not final. It may be withdrawn from publication, modified on rehearing, or review may be granted by the California Supreme Court.  These events would render the opinion unavailable for use as legal authority in California state courts.

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com.

 

Insurance



Insurance

Loading...