Maxon Industries, Inc. v. State Compensation Insurance Fund

Insurance Code section 11873, subdivision (a) exempts the State Compensation Insurance Fund (the Fund) from most provisions of the Government Code: “[T]he fund shall not be subject to the provisions of the Government Code made applicable to state agencies generally or collectively, unless the section specifically names the fund as an agency to which the provision applies.” The California Tort Claims Act (Gov. Code, § 810 et seq.) is such a general statute. Although Insurance Code section 11873 makes several exceptions to the general exemption, there is none which brings the Fund within the Tort Claims Act. In light of Insurance Code section 11873, we conclude that the Tort Claims Act is not applicable to the Fund and reject the Fund’s arguments to the contrary. In the unpublished portion of the opinion, we conclude that the trial court erred in sustaining the Fund’s demurrer without leave to amend.

Factual and Procedural Summary

Maxon Industries, Inc., the appellant, obtained a workers’ compensation insurance policy from Beaver Insurance Company for the period May 1987 through May 1988. Maxon then obtained a workers’ compensation policy from the Fund covering the period…