Bluth v. Blue Hill Specialty Insurance CA2/5

Opinion

Filed 9/3/26 Bluth v. Blue Hill Specialty Insurance CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

RICHARD BLUTH, B344921

Plaintiff and Appellant, (Los Angeles County Super. Ct. No.

v. 24VECV06317)

BLUE HILL SPECIALTY INSURANCE/PROGRESSIVE

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Valerie Salkin, Judge. Affirmed.

Saeedian Law Group, Michael Saeedian, Daniella Saeedian; Esner, Chang, Boyer & Murphy and Stuart B. Esner for Plaintiff and Appellant.

Lagasse Branch Bell + Kinkead, Thomas P. Gmelich, Darren P. Salute, Peter H. Crossin, and Erik E. Millan for Defendant and Respondent.

Richard Bluth (Bluth) was injured by an uninsured driver in an automobile accident. Bluth had uninsured motorist coverage under an insurance policy provided by his employer— Uber Technologies, Inc. (Uber)—and he ultimately filed a petition for uninsured motorist arbitration. The trial court denied that petition on untimeliness grounds because Bluth did not make a demand for arbitration within two years of the accident according to procedures provided by Insurance Code section 11580.2 (requiring notice by certified mail to an insurer’s agent for service of process).1 Bluth undisputedly did not timely comply with the statutory notice requirement, but he asks us to decide whether “substantial compliance” with the statute is enough.

I. BACKGROUND

At approximately 2:30 a.m. on August 14, 2022, while driving his Toyota Camry on the Ventura Freeway, Bluth collided with a BMW series 5 sedan driven by a 16-year-old. Dash camera footage from Bluth’s vehicle showed the BMW merged directly in front of Bluth, who had been traveling in an adjacent lane. The California Highway Patrol determined the accident was caused by an unsafe lane change by the driver of the BMW. At the time of the accident, Bluth was a rideshare driver for Uber and he was covered under an insurance policy provided by Uber. A month after the accident, Bluth’s attorneys received a letter from the insurer for the BMW’s driver stating there was no coverage for Bluth’s claims.

1 Undesignated statutory references that follow are to the Insurance Code.

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A. Bluth’s Demand for Arbitration About two weeks’ shy of the two-year anniversary of the accident, one of Bluth’s attorneys sent a written demand for uninsured motorist arbitration to Uber’s insurance carrier, defendant Blue Hill Specialty Insurance/Progressive (Blue Hill).2 The record indicates the letter was sent via email and certified mail. The typewritten letter was addressed to “Kaylie Heideman, Progressive Claims, 747 Alpha Drive, Highland Heights, OH 44143.” The handwritten address on the letter’s envelope, however, was not identical to this address; it had a different and seemingly misspelled addressee (Kaylie Heidman) and city (Highlend Heights).3 Three days later, the United States Postal Service (USPS)

marked the envelope containing the demand letter as “[n]ot [d]eliverable” and returned it to Bluth’s attorneys. The record indicates the returned mail arrived back in the law firm’s office on August 8, 2024 (still within two years of the accident). Additional time passed, and after the two-year anniversary of the accident, Bluth’s counsel sent an identical arbitration demand letter to Blue Hill via certified mail on August 26, 2024. The city

2 Approximately two weeks earlier, on July 11, 2024, Bluth’s attorneys made a policy limits settlement demand. That letter was addressed as follows: “Kaylie Heideman, Progressive Claims, P.O. Box 94621, Cleveland, OH 44101.” Blue Hill did not accept the settlement demand. 3 The accompanying certified mail return receipt was addressed the same as the letter except for missing the “Progressive Claims” notation.

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on the envelope was correctly addressed this time, and the envelope with the demand was delivered on August 29, 2024.

B. Bluth’s Motion to Compel Arbitration Several months after receipt of the demand for uninsured motorist arbitration, Blue Hill notified Bluth that it would not be moving forward with arbitration because the arbitration demand “was not timely made within the 2-year statute of limitations.”

Bluth responded by moving to compel uninsured motorist arbitration in January 2025. Bluth acknowledged his lawyers’ initial attempt at serving the arbitration demand was not successful, but he argued the demand was nonetheless proper under the “‘mailbox rule’” (as he put it: “a letter correctly addressed and properly mailed is presumed to have been received in the ordinary course of mail”). Bluth also maintained his attorneys’ second demand letter did not represent an “unreasonable delay.”

Blue Hill opposed the motion to compel arbitration. The company argued Bluth could not compel arbitration because his demand for arbitration was not made within the statutory two- year period. In that vein, Blue Hill explained Bluth had six days after the first demand letter was returned undelivered to Bluth’s attorneys to send a correctly addressed letter before the two-year period expired—but he nonetheless delayed until 12 days after the two-year period expired to serve a proper arbitration demand. Blue Hill also emphasized that Bluth had not provided any explanation or justification for this delay in sending a corrected demand notice.

In reply, Bluth disputed the misspellings on the envelope for the first demand letter had any impact on the USPS’s ability

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to deliver the letter because the zip code, which is the main identifier used by the USPS in sorting and delivering mail, was identical on the envelopes for both the first and second letters.4 Bluth also disputed the envelope for the first letter misspelled the name of the city; according to the paralegal who addressed the envelope, “[w]hat [d]efendant claims is an ‘e’ in Highl(a)nd Heights is actually an ‘a.’” Bluth also maintained Blue Hill had not established any prejudice from the 12-day delay in serving the second demand letter.

In February 2025, the trial court held a hearing on Bluth’s motion to compel arbitration. Because the first demand letter was not delivered and the second letter was “clearly untimely,” the court denied the motion. For the trial court, the “bottom line” was the failure of Bluth’s counsel to timely serve Blue Hill with an arbitration demand: “You had two years to do this, and you didn’t do it. And you waited until the last minute, and it wasn’t done correctly. And this is the consequence . . . .”

II. DISCUSSION

Section 11580.2, in pertinent part, provides as follows: “No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within two years from

4 Bluth’s argument was based on a document apparently downloaded from the USPS website, a copy of which was attached to a declaration by one of Bluth’s attorneys. Blue Hill raised a number of evidentiary objections to the purported USPS document. The record does not show that the trial court ever ruled on those objections.

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the date of the accident: [¶] . . . [¶] (C) The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested. Notice shall be sent to the insurer or to the agent for process designated by the insurer filed with the department.” (§ 11580.2, subd. (i)(1).)

Bluth’s arbitration demand was not served within this two-

year time period. As we will explain, section 11580.2 does make exceptions for the two-year deadline in some circumstances, but none of those circumstances are involved in this case. Instead, Bluth asks that we make another exception not specified in the statute: excusing noncompliance with the two-year deadline where there is “substantial compliance” with that deadline. We hold substantial compliance (whatever that precisely means— Bluth does not say) is not enough and the trial court’s ruling was accordingly correct.

We are not the first reviewing court to consider the meaning of subdivision (i) of section 11580.2. Our Supreme Court has explained the two-year period to make a demand for arbitration “‘is, in effect, a statute of limitations. Such statutes are intended to set controversies at rest by foreclosing consideration thereafter as to the merits of the claim. To reject a strict application of the law in favor of “broad principles of justice and equity” would make a statute of limitation meaningless.’ [Citation.]” (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 484; see also Blankenship v. Allstate Ins. Co. (2010) 186 Cal.App.4th 87, 94 [section 11580.2 imposes an “obligation on the insured to comply with its mandates or else the insured forfeits his claim”]; Juarez v. 21st Century Ins. Co. (2003) 105 Cal.App.4th 371, 377 [“the statutory language [of section

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11580.2] clearly shows that the Legislature intended to impose strict prerequisites and time limits for claims involving uninsured motorists”].) Other courts have also observed section 11580.2, subdivision (i) is “clear and unambiguous” (Blankenship, supra, at 94; Juarez, supra, at 376-377), and that too helps frame our interpretive task in evaluating Bluth’s argument. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1232-1233 [“‘“[O]ur fundamental task,”’” when interpreting a statute is “‘“‘to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute.’ . . . We begin by examining the statutory language because it generally is the most reliable indicator of legislative intent. We give the language its usual and ordinary meaning, and ‘[i]f there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs’”’”].)

Section 11580.2, subdivision (i) expressly excuses compliance with the two-year demand deadline in limited circumstances, namely, where “[t]he doctrines of estoppel, waiver, impossibility, impracticality, and futility apply.” (§ 11580.2, subd. (i)(3).) None of these exceptions aid Bluth—it was not impossible, impractical, or futile to comply with the two-year deadline, and there are no facts that suggest estoppel or waiver might apply. Instead, Bluth proposes we craft a judge-made exception to the two-year timeframe when a party substantially complies with the requirement to deliver a demand for arbitration by certified mail within the two-year period. Though Bluth may present a sympathetic case because of the minor mistake in the envelope’s addressing that apparently prevented delivery—delivery was still prevented and sympathy is not an appropriate basis to make an exception to clear statutory

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requirements, especially when the Legislature has seen fit to specify its own equitable exceptions. (Freeman, supra, 14 Cal.3d at 484 [“‘To reject a strict application of the law in favor of “broad principles of justice and equity” would make a statute of limitation meaningless’”]; see also Blankenship, supra, 186 Cal.App.4th at 96 [“The Legislature . . . knew in 1995 that minority did not excuse noncompliance with the limitations period of section 11580.2(i), and it chose not to include minority in the list of circumstances it stated in the amendment would excuse noncompliance with the limitations period”]; Juarez, supra, 105 Cal.App.4th at 374-375.) Moreover, there was still time to correct the mistake when the initial misaddressed demand was returned, but no one in Bluth’s attorneys’ office acted until it was too late.

We decline Bluth’s invitation—never extended to the trial court—to rely on the doctrine of “substantial compliance” to nevertheless excuse his attorneys’ delay.5 The doctrine of substantial compliance cannot function to add an exception to the list of exceptions the Legislature itself specified. Furthermore, precedent explains the doctrine of substantial compliance “‘does not allow for an excuse to literal noncompliance in every situation’” and “does not apply at all when a statute’s requirements are mandatory, instead of merely directory.” (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1333.) Statutes of limitations and similar filing rules of the type

5 Naturally, our rejection of the doctrine of substantial compliance expresses no view on whether Bluth may pursue other remedies in connection with his attorneys’ delay in presenting the demand for arbitration.

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in section 11580.2, subdivision (i) are mandatory. (J.M. v. Huntington Beach Union High School Dist. (2017) 2 Cal.5th 648, 653; see also Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 950 [“mandatory procedural rules—like many statutes of limitations or other filing deadlines—serve important policy goals, and courts must enforce them when properly raised”]; Ard v. County of Contra Costa (2001) 93 Cal.App.4th 339, 346 [“Plaintiff directs us to no authority holding that ‘substantial compliance’ may excuse a filing beyond the deadline of [Government Code] section 946.6, subdivision (f), and such a rule is obviously contrary to this rule of strict compliance with statutes of limitations”]; Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1490, fn. omitted; Wagner v. City of South Pasadena (2000) 78 Cal.App.4th 943, 950.)

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DISPOSITION

The judgment is affirmed. Blue Hill is awarded costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

BAKER, Acting P. J.

We concur:

MOOR, J.

KIM (D.), J.