Clarendon National Insurance v. State Farm Mutual Auto Insurance

MEMORANDUM

Clarendon appeals from the district court’s summary judgment for State Farm. We have jurisdiction pursuant to 28 U.S.C. § 1291 , and affirm.

The district court correctly concluded that the insurance policy term, excluding coverage when an insured vehicle is “used to carry persons for a charge,” does not violate California law. Although the exclusion is not one of the enumerated exclusions found under California’s Insur-anee Code section 11580.1(c), other exclusions are allowed under California law so long as the insurance policy provides an “explicit description” of “the purposes for which coverage ... is specifically excluded.” Cal. Ins.Code § 11580.1(b)(3); see also § 11580.1(c) (stating that coverage may be excluded for the eight enumerated reasons “[i]n addition to any exclusion provided in paragraph (3) of subdivision (b) ...”). .

State Farm’s exclusion does not violate California’s Insurance Code section 11580.1(b)(4), which mandates coverage for permissive users. As the district court correctly explained, unlike the exclusion in Metz v. Universal Underwriters Insurance Co., 10 Cal.3d 45 , 109 Cal.Rptr. 698 , 513 P.2d 922 (1973), the exclusion in the State Farm…