Resure, Inc. v. Superior Court

Petitioner Resure, Inc., filed a complaint for rescission and declaratory relief against respondents Dan Palmer and Geoffrey Palmer, doing business as G. H. Palmer Associates. The complaint alleged that the Palmers misrepresented material facts or failed to disclose facts concerning potential claims in their application for insurance which would have affected Resure’s decision to underwrite coverage. Resure’s offer to rescind and restore the premiums was stated in the complaint, but not in any notice or letter sent prior to filing it. Resure moved for summary judgment, and the Palmers opposed on the ground that Resure failed to comply with Insurance Code section 650’s requirement that a “right to rescind a contract of insurance . . . given to the insurer by any provision of this part” be exercised “previous to the commencement of an action on the contract.” The trial court denied the motion on the basis that rescission of an insurance contract could not be initiated by a lawsuit without first giving notice of intent to rescind and tendering any unearned premiums. We granted an alternative writ to clarify the meaning of section 650 and its impact on an insurer’s right to…