Montoya
Colonial Insurance v. Montoya
Opinion
Opinion
Hamlin, J.
Factual and Procedural Background
Appellant John Montoya’s driver’s license was suspended in January 1979 when he suffered his second drunk driving conviction. Upon expiration of his one-year suspension, the Department of Motor Vehicles (DMV) informed Montoya his license could be reinstated provided he established proof of liability insurance coverage as required by California’s financial responsibility laws (Veh. Code, § 16000 et seq.). At that time, Montoya owned a Volkswagen in need of repairs, a 1968 Toyota, and was in the process of acquiring a 1964 Oldsmobile. The Volkswagen and Toyota were insured by the California State Automobile Association (CSAA). When Montoya requested proof of insurance from CSAA, his policy was canceled.
The Montoyas then shopped for the required insurance coverage. They found the lowest rates were offered by Colonial Insurance Company of California (Colonial) through the Lem Hill Insurance Agency.
On March 28, 1980, the Montoyas met Lem Hill and requested insurance coverage for the Toyota and Oldsmobile in the minimum amount required by California law for reinstatement of John Montoya’s driver’s license. The Montoyas informed Hill that…