North Star Reinsurance Corp. v. Superior Court

Is the three-year statute of limitations applicable to an action

for reformation based on mistake (Code Civ. Proc., § 338, subd. (d)) tolled with respect to an excess insurance or “umbrella” policy as in the tolling that applies during the time the underlying primary insurance carrier performs its duty to defend under a reservation of rights? Under the circumstances of this case, where the defense was not tendered to the excess carrier with the result that its duty to defend had not commenced, and where the insured was notified in writing of the coverage problem due to an exclusion contained in the excess insurance contract, we hold there is no tolling of the limitations period as to the excess carrier during the prosecution of the underlying action in which there would have been tolling as to the underlying insurer if it had been defending under a reservation of rights. (See, e.g., Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1077 [ 282 Cal.Rptr. 445 , 811 P.2d 737 ].)

Accordingly, we grant the petition for a writ of mandate brought by the excess insurer to require the superior court to grant a summary judgment in its favor on the ground the…