SCHWARTZ v. POIZNER



















Filed 7/28/10;
pub. order 8/12/10
(see end of opn.)





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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



FIRST
APPELLATE DISTRICT



DIVISION
THREE




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RICK L. SCHWARTZ et al., Plaintiffs and Appellants, v. STEVE POIZNER, as Insurance Commissioner, etc., Defendant and Respondent.

A126217 (City & County of San Francisco Super. Ct. No. CGC-05-446073)

In
October 2005, following an extensive investigation, the Commissioner of the
California Department of Insurance (the Commissioner)
entered into a settlement agreement with a number of related
insurance companies (the insurers) resolving allegations that the insurers'
claims-handling procedures violated the Insurance Code.[1] In the present action,
plaintiff Rick Schwartz alleges numerous causes of action against the insurers
who are parties to the settlement
agreement, and also petitions for a writ of mandate directed at the
Commissioner. Plaintiff purports to represent classes of California residents
holding disability income policies issued by the insurers who, like him,
submitted no claims under their policies but allegedly were overcharged for
their policies in view of the insurers' unlawfully restrictive claims
procedures and who received no benefit under the terms of the settlement
agreement. Plaintiff appeals from an order dismissing the petition for a writ of mandate, which sought to compel
the Commissioner to pursue additional remedies against the insurers that will
inure to the benefit of class members. [2] He contends the trial court erred in concluding that the
Commissioner does not have a ministerial duty to seek the additional relief and
abused its discretion in failing to seek that relief. We disagree and shall
affirm the order dismissing the action against the Commissioner.

Factual and
Procedural History

The
settlement agreement between the Commissioner and insurers established a claims
reassessment process under which previously denied claims for disability income
benefits could be resubmitted for re-evaluation. The agreement also imposed an
$8 million penalty and required changes to the insurers' claims-handling
procedures and to the language of their insurance policies. As a result of the
reassessment process, approximately $230.2 million in additional benefits will
be paid to policyholders that made claims. The settlement agreement does not
include any express benefits for policyholders who, like plaintiff, had not
submitted a claim for benefits under the relevant policies.

Plaintiff's
second amended complaint alleges that the insurers' â€