Supreme Court of California Justia
Citation 46 Cal. 4th 56, 205 P.3d 201, 92 Cal. Rptr. 3d 279

Fairbanks v. Superior Ct.

Filed 4/20/09

IN THE SUPREME COURT OF CALIFORNIA

PAULINE FAIRBANKS et al.,
Petitioners,
v.
S157001
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Ct.App. 2/3 B198538
Respondent;
FARMERS NEW WORLD LIFE
Los Angeles County
INSURANCE CO. et al.,
Super. Ct. No. BC305603
Real Parties in Interest.
___________________________________ )

Enacted in 1970, the Consumers Legal Remedies Act (Civ. Code, § 1750 et
seq.) prohibits specified unfair and deceptive acts and practices in a “transaction
intended to result or which results in the sale or lease of goods or services to any
consumer” (id., § 1770, subd. (a)). The question we decide here is whether life
insurance is a service subject to the act’s remedial provisions. We conclude that it
is not. As this is consistent with the Court of Appeal’s decision, we affirm its
judgment.
I
In November 2003, plaintiff Pauline Fairbanks filed a complaint in superior
court, on behalf on herself and all others similarly situated, naming as defendants
both Farmers Group, Inc., and Farmers New World Life Insurance Company
1

(collectively, Farmers). Michael Cobb was named as an additional plaintiff in the
third amended complaint, which is the pleading at issue here.
Plaintiffs Fairbanks and Cobb have alleged that they are California
residents who have purchased Farmers’ policies of universal life insurance and
flexible premium universal life insurance. Fairbanks is a Farmers agent; Cobb,
apparently, is not. Plaintiffs sought to bring this action as a class action on behalf
of all persons who purchased similar Farmers policies between November 3, 1984,
and December 31, 1996.
Plaintiffs have alleged that Farmers engaged in various deceptive and unfair
practices in the marketing and administration of its universal life insurance and
flexible premium universal life insurance policies. Among the causes of action
that plaintiffs alleged was a claim for violation of the Consumers Legal Remedies
Act. As to that claim, the trial court granted Farmers’ motion for judgment on the
pleadings. The trial court concluded that the Consumers Legal Remedies Act did
not apply because the life insurance policies that Farmers issued to plaintiffs were
neither “goods” nor “services” as defined in that act.
Plaintiffs sought review of the trial court’s ruling by petitioning the Court
of Appeal for a writ of mandate. After issuing an order to show cause, the Court
of Appeal denied the petition. Like the trial court, the Court of Appeal concluded
that life insurance is not subject to the protections of the Consumers Legal
Remedies Act. We granted plaintiffs’ petition for review.1

1
Although the parties have framed the issue as whether insurance in general
is a service for purposes of the Consumers Legal Remedies Act, and although both
the trial court and the Court of Appeal took that broad view of the issue, we have
narrowed the issue to focus only on life insurance.
2

II
In Civil Service Employees Ins. Co. v. Superior Court (1978) 22 Cal.3d
362, 376, this court remarked that “insurance is technically neither a ‘good’ nor a
‘service’ within the meaning of the [Consumers Legal Remedies Act].” Because
the issue was not presented there, that statement was dictum. Nevertheless, federal
district courts have relied upon it in concluding that annuities, which are included
within the Insurance Code’s definition of life insurance (Ins. Code, § 101), are
neither goods nor services the sale of which is subject to regulation under the
Consumers Legal Remedies Act. (Estate of Migliaccio (C.D.Cal. 2006) 436
F.Supp.2d 1095, 1108-1109; Bacon ex rel. Moroney v. American Intern. Group,
con ex rel. Moroney v. American Intern. Group (N.D.Cal. 2006) 64 Fed. Rules
Serv.3d 142.)
The Consumers Legal Remedies Act defines “goods” as “tangible chattels
bought or leased for use primarily for personal, family, or household purposes,
including certificates or coupons exchangeable for these goods, and including
goods that, at the time of the sale or subsequently, are to be so affixed to real
property as to become a part of real property, whether or not severable from the
real property.” (Civ. Code, § 1761, subd. (a).) It defines “services” as “work,
labor, and services for other than a commercial or business use, including services
furnished in connection with the sale or repair of goods.” (Id., § 1761, subd. (b).)
Life insurance is a contract of indemnity under which, in exchange for the
payment of premiums, the insurer promises to pay a sum of money to the
designated beneficiary upon the death of the named insured. (Estate of Barr
(1951) 104 Cal.App.2d 506, 508; see Ins. Code, §§ 22, 101.) Because life
insurance is not a “tangible chattel,” it is not a “good” as that term is defined in the
Consumers Legal Remedies Act. (Civ. Code, § 1761, subd. (a).) Neither is life
insurance a “service” under the act. An insurer’s contractual obligation to pay
3

money under a life insurance policy is not work or labor, nor is it related to the
sale or repair of any tangible chattel. Accordingly, we agree with the Court of
Appeal that the life insurance policies at issue here are not services as defined in
the Consumers Legal Remedies Act.
Because the statutory language is unambiguous, there is no need to
consider legislative history (People v. Castenada (2000) 23 Cal.4th 743, 747), and
we do so only from an abundance of caution. The legislative history of the
Consumers Legal Remedies Act confirms our conclusion that it does not apply to
life insurance. The California Legislature adapted this act largely from a model
law, the National Consumer Act, proposed by the National Consumer Law Center
at Boston College. (Assem. Com. on Judiciary, analysis of Assem. Bill No. 292
(1970 Reg. Sess.) Apr. 20, 1970, p. 1; see Reed, Legislating for the Consumer: An
Insider’s Analysis of the Consumers Legal Remedies Act (1971) 2 Pacific L.J. 1,
11.) The model law expressly applied to insurance because it defined “services”
as including “(a) work, labor, and other personal services, [¶] (b) privileges with
respect to transportation, hotel and restaurant accommodations, education,
entertainment, recreation, physical culture, hospital accommodations, funerals,
cemetery accommodations, and the like, and [¶] (c) insurance.” (Nat. Consumer
Act (Nat. Consumer L. Center 1970) § 1.301, subd. (37), pp. 23-24, italics added.)
Our Legislature omitted the reference to insurance in the definition of “services,”
however, thereby indicating its intent not to treat all insurance as a service under
the Consumers Legal Remedies Act. (See Hughes Electronics Corp. v. Citibank
Delaware (2004) 120 Cal.App.4th 251, 268 [when a statute is modeled on a
uniform act, deviation from the uniform act’s language is presumed to be
deliberate and to reflect a different intent]; Berry v. American Express Publishing,
Inc. (2007) 147 Cal.App.4th 224, 230-231 [deleting a specific provision from a
proposed law generally reflects an intent that the law not be construed to include
4

the omitted provision]; San Bernardino Valley Audubon Society v. City of Moreno
Valley (1996) 44 Cal.App.4th 593, 604 [same].)
This intent is further confirmed by comparing the Consumers Legal
Remedies Act’s definition of “services” with the definition of the same word in
the Unruh Act (Civ. Code, § 1801 et seq.). In 1970, when the Legislature was in
the process of drafting and enacting the Consumers Legal Remedies Act, the
Unruh Act defined “services” this way: “ ‘Services’ means work, labor and
services, for other than a commercial or business use, including services furnished
in connection with the sale or repair of goods as defined in Section 1802.1 or
furnished in connection with the repair of motor vehicles . . . or in connection with
the improvement of real property or the providing of insurance . . . .” (Civ. Code,
§ 1802.2, added by Stats. 1959, ch. 201, § 1, pp. 2092-2093.) We presume the
Legislature was aware of this Unruh Act definition when it set about defining the
same word in the Consumers Legal Remedies Act, and the language of the two
definitions is similar in many respects, but the express reference to insurance in
the Unruh Act definition is conspicuously absent from the definition in the
Consumers Legal Remedies Act. The use of differing language in otherwise
parallel provisions supports an inference that a difference in meaning was
intended. (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876,
896.) Even under the quoted Unruh Act definition of services, moreover,
insurance itself is not specifically included, but only “services furnished . . . in
connection with . . . the providing of insurance.” (Civ. Code, § 1802.2.) Thus, the
Unruh Act definition of “services” provides additional evidence that the
Legislature did not consider insurance itself to be a service for purposes of
consumer protection legislation.
The legislative history that has been brought to our attention does not
explain why the Legislature omitted an express reference to insurance from the
5

definition of “services” in the Consumers Legal Remedies Act. We do know,
however, that the act’s final wording “was the product of intense negotiations
between consumer and business groups, and represented a compromise between
the two.” (Berry v. American Express Publishing, Inc., supra, 147 Cal.App.4th at
p. 230, citing Reed, Legislating for the Consumer: An Insider’s Analysis of the
Consumers Legal Remedies Act, supra, 2 Pacific L.J. 1, 8.) The omission or
exclusion of insurance from the definition of “services” may have been one
element of the compromise. It is also possible that the Legislature was influenced
by the existence of a separate legislative scheme, the Unfair Trade Practices Act
(Ins. Code, § 790 et seq.; see id., § 1620.2), for deterring unfair and deceptive
practices in the insurance industry. (See generally Moradi-Shalal v. Fireman’s
Fund Ins. Companies (1988) 46 Cal.3d 287.)
Plaintiffs do not here argue that life insurance policies are goods within the
meaning of the Consumers Legal Remedies Act. They do contend, however, that
life insurance is a service under that law. In support of that contention, they rely
first on a broad dictionary definition of “service” as including a “benefit” and a
“contribution to the welfare of others.” (Merriam-Webster OnLine Dict.
<http://www.merriam-webster.com/dictionary/service> [as of Apr. 20, 2009].)
Insurance, or the providing of insurance, may well be a service within the meaning
of these broad dictionary definitions. (See, e.g., Cates Construction, Inc. v. Talbot
Partners (1999) 21 Cal.4th 28, 54 [referring to insurance as a “ ‘quasi-public’
service”]; Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 820 [quoting a
commentator’s characterization of insurance as “ ‘a vital service’ ”].) When the
Legislature has provided a statutory definition for a term, however, courts must
apply that definition when interpreting the statute rather than general dictionary
definitions. (Bernard v. Foley (2006) 39 Cal.4th 794, 808.) As we have
concluded, life insurance does not fit within the statutory definition of “services.”
6

Next, plaintiffs rely on decisions from other jurisdictions holding that
insurance comes within the meaning of “service” as defined in similar consumer
protection statutes. As the Court of Appeal pointed out, however, the statutes in
those other states are differently worded and have broader application than the
Consumer Legal Remedies Act. For example, plaintiffs rely on McCrann v.
Klaneckey (Tex.App. 1984) 667 S.W.2d 924, which concluded that insurance is a
service under Texas’s Deceptive Trade Practices Act (Tex. Bus. & Com. Code
Ann., § 17.50). Plaintiffs point out that the Texas statute defined “services” as
“work, labor, or service purchased or leased for use, including services furnished
in connection with the sale or repair of goods” (Tex. Bus. & Com. Code Ann.,
§ 17.45, subd. (2)), a definition almost identical to the definition of “services” in
the Consumers Legal Remedies Act. But plaintiffs fail to note that McCrann
relied on the earlier decision in Dairyland County Mutual Insurance Co. of Texas
v. Harrison (Tex.App. 1979) 578 S.W.2d 186, which in turn relied on another
provision of Texas’s Deceptive Trade Practices-Consumer Protection Act, which
“provide[d] for the maintenance of an action by one who has been adversely
affected by ‘the use or employment by any person of an act or practice in violation
of Article 21.21, Texas Insurance Code . . . .’ ” (Dairyland County Mutual
Insurance Co. of Texas v. Harrison, supra, at p. 190.) It was this express
incorporation of statutes regulating insurance that persuaded the Texas appellate
court that the Texas consumer protection law applied to insurance. (Ibid.)
California’s Consumers Legal Remedies Act has no similar provision expressly
incorporating laws regulating insurance, and thus the Texas courts’ decisions
provide no persuasive support for plaintiffs’ argument here.
Likewise distinguishable is the Colorado Supreme Court’s decision in
Showpiece Homes Corp. v. Assurance Co. of America (Colo. 2001) 38 P.3d 47,
holding that insurance was subject to regulation under the Colorado Consumer
7

Protection Act. In reaching that conclusion, the Colorado high court noted that the
Colorado law regulated goods, services, and property, that it did not define
“goods” or “services,” and that it contained a definition of “property” that
included “intangible property.” (Showpiece Homes Corp. v. Assurance Co. of
America, supra, at p. 57.) The Colorado high court concluded that insurance was
subject to regulation under the Colorado law either as intangible property or as
services under a broad dictionary definition of that term. (Id. at pp. 57-58.)
California’s Consumers Legal Remedies Act is unlike the Colorado law because it
does not apply to intangible property or goods, and because it contains a restrictive
definition of “services” that excludes life insurance. For this reason, the Colorado
decision provides no persuasive authority for plaintiffs’ contention here.
Plaintiffs point that in Massachusetts Mut. Life Ins. Co. v. Superior Court
(2002) 97 Cal.App.4th 1282, the Court of Appeal evidently assumed that the
Consumers Legal Remedies Act applies to life insurance. The case is of no
assistance to plaintiffs, however, because a judicial decision is not authority for a
point that was not actually raised and resolved. (Miklosy v. Regents of University
of California, supra, 44 Cal.4th at p. 900, fn. 7; People v. Knoller (2007) 41
Cal.4th 139, 154-155.)
Next, plaintiffs rely on Civil Code section 1760, which states that the
provisions of the Consumers Legal Remedies Act “shall be liberally construed and
applied to promote its underlying purposes, which are to protect consumers
against unfair and deceptive business practices and to provide efficient and
economical procedures to secure such protection.” A liberal construction mandate
affects statutory construction only when the statutory language is ambiguous and
the intent of the enacting body is in doubt, however; it cannot be invoked when, as
here, the meaning of the statutory language is not otherwise uncertain. (See, e.g.,
Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 1323; Sierra Club
8

v. California Coastal Com. (2005) 35 Cal.4th 839, 856; City of Huntington Beach
v. Board of Administration (1992) 4 Cal.4th 462, 472.)
Plaintiffs argue that their position is supported by Insurance Code section
1861.03, subdivision (a), which provides: “The business of insurance shall be
subject to the laws of California applicable to any other business, including, but
not limited to, the Unruh Civil Rights Act . . . and the antitrust and unfair business
practices laws.” The quoted provision was added by Proposition 103, which the
voters passed at the November 8, 1988 General Election. (See 20th Century Ins.
Co. v. Garamendi (1994) 8 Cal.4th 216, 239-240.) Proposition 103 does not apply
to life insurance, and we have previously declined to decide whether Insurance
Code section 1861.03, subdivision (a), applies to all lines of insurance.
(Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 282.)
Assuming for the sake of argument that this provision does apply to the insurance
industry generally, its effect is merely to preclude courts from exempting
insurance from general laws that would otherwise apply to it. The Consumers
Legal Remedies Act is not an otherwise applicable general law, however. Rather
than applying to all businesses, or to business transactions in general, the
Consumers Legal Remedies Act applies only to transactions for the sale or lease of
consumer “goods” or “services” as those terms are defined in the act. Insurance
Code section 1861.03, subdivision (a), does not override the limitations that the
Legislature incorporated into that statutory scheme.
Finally, plaintiffs contend that if life insurance policies by themselves are
not services as defined in the Consumers Legal Remedies Act, the work or labor
of insurance agents and other insurance company employees in helping consumers
select policies that meet their needs, in assisting policyholders to keep their
policies in force, and in processing claims are services that are sufficient to bring
9

life insurance within the reach of the Consumers Legal Remedies Act. We
disagree.
As Farmers points out, ancillary services are provided by the sellers of
virtually all intangible goods — investment securities, bank deposit accounts and
loans, and so forth. The sellers of virtually all these intangible items assist
prospective customers in selecting products that suit their needs, and they often
provide additional customer services related to the maintenance, value, use,
redemption, resale, or repayment of the intangible item. Using the existence of
these ancillary services to bring intangible goods within the coverage of the
Consumers Legal Remedies Act would defeat the apparent legislative intent in
limiting the definition of “goods” to include only “tangible chattels.” (Civ. Code,
§ 1761, subd. (a).) We conclude, accordingly, that the ancillary services that
insurers provide to actual and prospective purchasers of life insurance do not bring
the policies within the coverage of the Consumers Legal Remedies Act.
DISPOSITION
The Court of Appeal’s judgment is affirmed.
KENNARD,
J.
WE CONCUR:

GEORGE, C. J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
CORRIGAN, J.

10

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Fairbanks v. Superior Court __________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 154 Cal.App.4th 435
Rehearing Granted

__________________________________________________________________________________

Opinion No. S157001
Date Filed: April 20, 2009
__________________________________________________________________________________

Court: Superior
County: Los Angeles
Judge: Anthony J. Mohr

__________________________________________________________________________________

Attorneys for Appellant:
Law Office of Robert S. Gerstein, Robert S. Gerstein; Marks Law Firm, Scott A. Marks; Sheller Law Firm,
David L. Sheller; Girardi Keese and John A. Girardi for Petitioners.
Amy Bach; Law Offices of Kim E. Card and Kim E. Card for United Policyholders as Amicus Curiae on
behalf of Petitioners.

Stuart Law Firm, Anthony E. Stuart and E. Glenn Anaiscourt for Consumer Attorneys of California as
Amicus Curiae on behalf of Petitioners.

Harvey Rosenfield, Pamela Pressley and Todd M. Foreman for Consumer Watchdog as Amicus Curiae on
behalf of Real Parties in Interest.

__________________________________________________________________________________

Attorneys for Respondent:
No appearance for Respondent.
Fulbright & Jaworski, Richard R. Mainland, Peter H. Mason, Joshua D. Lichtman and Eric A. Herzog for
Real Parties in Interest.

Horvitz & Levy, Mitchell C. Tilner and Robert H. Wright for American Council of Life Insurers, American
Insurance Association, Association of California Insurance Companies, Association of California Life and
Health Insurance Companies, Pacific Association of Domestic Insurance Companies and Personal
Insurance Federation of California as Amici Curiae on behalf of Real Parties in Interest.

Counsel who argued in Supreme Court (not intended for publication with opinion):
Robert S. Gerstein
Law Office of Robert S. Gerstein
12400 Wilshire Boulevard, Suite 1300
Los Angeles, CA 90025
(310) 820-1939

Peter H. Mason
Fulbright & Jaworski
555 South Flower Street, Forty-First Floor
Los Angeles, CA 90071
(213) 892-9200

Document Outline

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Petition for review after the Court of Appeal denied a petition for peremptory writ of mandate. This case presents the following issue: Is insurance a "good" or a "service" that is subject to the Consumers Legal Remedies Act (Civ. Code, section 1750)?

Opinion Information
Date:Citation:Docket Number:Category:Status:Cross Referenced Cases:
Mon, 04/20/200946 Cal. 4th 56, 205 P.3d 201, 92 Cal. Rptr. 3d 279S157001Review - Civil Original Proceedingclosed; remittitur issued

SHELLER v. S.C. (FARMERS NEW WOWRLD LIFE INSURANCE CO. (S142810)


Parties
1Fairbanks, Pauline (Petitioner)
Represented by Robert S. Gerstein
Law Offices of Robert S. Gerstein
12400 Wilshire Boulevard, Suite 1300
Los Angeles, CA

2Fairbanks, Pauline (Petitioner)
Represented by John A. Girardi
Girardi & Keese
1126 Wilshire Boulevard
Los Angeles, CA

3Fairbanks, Pauline (Petitioner)
Represented by Scott Aaron Marks
Marks Law Firm
21900 Burbank Boulevard, 3rd Floor
Woodland Hills, CA

4Cobb, Michael (Petitioner)
Represented by John A. Girardi
Girardi & Keese
1126 Wilshire Boulevard
Los Angeles, CA

5Cobb, Michael (Petitioner)
Represented by Scott Aaron Marks
Marks Law Firm
21900 Burbank Boulevard, 3rd Floor
Woodland Hills, CA

6Cobb, Michael (Petitioner)
Represented by Robert S. Gerstein
Law Offices of Robert S. Gerstein
12400 Wilshire Boulevard, Suite 1300
Los Angeles, CA

7Superior Court of Los Angeles County (Respondent)
111 North Hill Street
Los Angeles, CA 90012

8Farmers New World Life Insurance Company (Real Party in Interest)
Represented by Richard R. Mainland
Fulbright & Jaworski
555 S. Flower Street, Suite 4100
Los Angeles, CA

9Farmers New World Life Insurance Company (Real Party in Interest)
Represented by Peter H. Mason
Fulbright & Jaworski
555 S. Flower Street, Suite 4100
Los Angeles, CA

10Farmers Group, Inc. (Real Party in Interest)
Represented by Richard R. Mainland
Fulbright & Jaworski
555 S. Flower Street, 41st Floor
Los Angeles, CA

11Farmers Group, Inc. (Real Party in Interest)
Represented by Peter H. Mason
Fulbright & Jaworski
555 S. Flower Street, Suite 4100
Los Angeles, CA

12American Council of Life Insurers (Amicus curiae)
Represented by Robert Herring Wright
Horvitz & Levy, LLP
15760 Ventura Boulevard, 18th Floor
Encino, CA

13Consumer Attorneys of California (Amicus curiae)
Represented by Evan Glenn Anaiscourt
Stuart Law Firm
12400 Wilshire Boulevard, Suite 400
Los Angeles, CA

14Consumer Attorneys of California (Amicus curiae)
Represented by Antony Stuart
Stuart Law Firm
12400 Wilshire Boulevard, Suite 400
Los Angeles, CA

15Consumer Watchdog (Amicus curiae)
Represented by Todd Michael Foreman
Foundation for Taxpayer & Consumer Rights
1750 Ocean Park Boulevard, Suite 200
Santa Monica, CA

16Consumer Watchdog (Amicus curiae)
Represented by Pamela Pressley
Foundation for Taxpayer & Consumer Rights
1750 Ocean Park Boulevard, Suite 200
Santa Monica, CA

17Consumer Watchdog (Amicus curiae)
Represented by Harvey Jay Rosenfield
Foundation for Taxpayer & Consumer Rights
1750 Ocean Park Boulevard, Suite 200
Santa Monica, CA

18United Policyholders (Amicus curiae)
Represented by Kim E. Card
Law Offices of Kim E. Card
1690 Sacramento Street
Berkeley, CA


Opinion Authors
OpinionJustice Joyce L. Kennard

Disposition
Apr 20 2009Opinion: Affirmed

Dockets
Oct 2 2007Petition for review filed
  Petitioners Pauline Fairbanks and Michael Cobb [rule 8.25] Attorneys Robert S. Gerstein, John A. Girardi and Scott A. Marks
Oct 10 2007Received Court of Appeal record
 
Oct 16 2007Answer to petition for review filed
  petitioner Pauline Fairbanks Attorney Peter H. Mason
Oct 29 2007Reply to answer to petition filed
  Petitioners Pauline Fairbanks and Michael Cobb
Nov 14 2007Petition for review granted (civil case)
  Votes: George, C.J., Kennard, Werdegar, Chin, Moreno, and Corrigan, JJ.
Nov 21 2007Certification of interested entities or persons filed
  Petitioner Pauline Fairbanks Attorney Robert S. Gerstein
Nov 28 2007Certification of interested entities or persons filed
  counsel for RPI, Farmers New World Life Ins. Co.
Nov 29 2007Request for extension of time filed
  to file opening brief to January 14, 2007 Petitioners Pauline Fairbanks and Michael Cobb Attorney Robert S. Gerstein
Dec 6 2007Extension of time granted
  On application of petitioner and good cause appearing, it is ordered that the time to serve and file the opening brief is extended to and including January 14, 2008.
Jan 14 2008Opening brief on the merits filed
  Petitioners Pauline Fairbanks and Michael Cobb
Jan 14 2008Request for judicial notice filed (granted case)
  Petitioners Pauline Fairbanks and Michael Cobb
Jan 14 2008Application to appear as counsel pro hac vice filed
  Counsel for petitioners Pauline Fairbanks and Michael Cobb for Attorney David Sheller
Jan 23 2008Request for extension of time filed
  Real Party in Interest Farmers New World requests extension of time to March 14,, 2008. to file the answer brief on the merits.
Jan 23 2008Opposition filed
  Real party in Interest Farmers New World Life Ins., Co., to Applcation of Attorney David Sheller for Pro Hac Vice Status.
Jan 29 2008Opposition filed
  Real Parties in Interest Farmers New World Life Ins., Co., to Petitioners' Motion for Judicial Notice
Jan 30 2008Received:
  From counsel for petitioners' Pauline Fairbanks and Michael Cobb his reply in support of application of David Sheller for pro hac vice status
Jan 31 2008Received:
  amended pos as to address correction for Law Office of Robert S. Gerstein
Feb 5 2008Filed:
  Reply to Opposition to Motion for Judicial Notice Petitioners Pauline Fairbanks and Michael Cobb
Feb 11 2008Extension of time granted
  On application of real party in interest and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including March 14, 2008.
Mar 14 2008Answer brief on the merits filed
  RPI Farmers New World Life Ins., Co. Attorney Richard R. Mainland
Mar 28 2008Request for extension of time filed
  to file reply brief/merits to May 5, 2008 submitted by petitioners Pauline Fairbanks and Michael Cobb
Apr 7 2008Extension of time granted
  On application of petitioner and good cause appearing, it is ordered that the time to serve and file the reply brief on the merits is extended to and including May 5, 2008.
May 6 2008Application filed
  by: Petitioners Pauline Fairbank's and Michael Cobb's CRC 8.25 to exceed word limit on Reply Brief/Merits
May 6 2008Received:
  from Petitioners Pauline Fairbanks ad Michael Cobb Reply Brief/Merits [exceeding word limit] CRC 8.25
May 6 2008Request for judicial notice filed (granted case)
  from petitioners Pauline Fairbanks and Michael Cobb
May 8 2008Reply brief filed (case fully briefed)
  counsel for petnrs. w/permssion
May 21 2008Opposition filed
  Real party in interest Farmers New World Life Ins. Co. to petitioners' motion for judicial notice
May 27 2008Filed:
  Reply to Opposition to Additional Request for Judicial Notice Petitioners Pauline Fairbanks and Michael Cobb Attorneys Robert S. Gerstein, etal
Jun 2 2008Request for extension of time filed
  Counsel for amicus curiae Consumer Watchdog requests extension of time to July 9, 2008, to file the application for permission to file an amicus curiae brief.
Jun 2 2008Request for extension of time filed
  Counsel for amicus curiae United Policy Holders requests extension of time to July 9, 2008, to file the application for permission to file an amicus curiae brief.
Jun 6 2008Request for extension of time filed
  Consumer Attorneys of California request extension of time to July 9, 2008, to file the application for permission to file an amicus curiae brief.
Jun 9 2008Request for extension of time filed
  American Council of Life Insurers, et al. requests extension of time to July 9, 2008, to file the application for permission to file amicus curiae brief. (8.25(b))
Jun 10 2008Extension of time granted
  On application of amicus curiae United Policyholders and good cause appearing, it is ordered that the time to serve and file the application for permission to file an amicus curiae brief is extended to and including July 9, 2008.
Jun 10 2008Extension of time granted
  On application of amicus curiae Consumer Watchdog and good cause appearing, it is ordered that the time to serve and file the application for permission to file an amicus curiae brief is extended to and including July 9, 2008.
Jun 11 2008Extension of time granted
  On application of Consumer Attorneys of California and good cause appearing , it is ordered that the time to serve and file the application for permission to file an amicus curiae brief is extended to and including July 9, 2008.
Jun 11 2008Extension of time granted
  On application of American Council of Life Insurers et al., and good cause appearing, it is ordered that the time to serve and file the application for permission to file an amicus curiae brief is extended to and including July 9, 2008.
Jul 7 2008Received application to file Amicus Curiae Brief
  American Council of Life Insurers, et al., requests permission to file amicus curiae brief in support of real parties in interest.
Jul 9 2008Received application to file Amicus Curiae Brief
  Consumer Watchdog supporting petitioner Pauline Fairbanks Application & Brief under same cover Harvey Rosenfield, counsel
Jul 9 2008Request for judicial notice filed (granted case)
  Consumer Watchdog (non-party)
Jul 9 2008Permission to file amicus curiae brief granted
  American Council of Life Insurers et al.,
Jul 9 2008Amicus curiae brief filed
  The application of American Council of Life Insurers et al. for permission to file an amicus curiae brief in support of real parties in interest is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
Jul 10 2008Received application to file Amicus Curiae Brief
  Consumer Attorneys of California supporting petitioner Pauline Fairbanks Application & Brief under separate covers CRC 8.25 Antony Stuart, counsel
Jul 10 2008Received application to file Amicus Curiae Brief
  United Policyholders requests permission to file amicus curiae brief in support of petnr. (8.25(b))
Jul 14 2008Permission to file amicus curiae brief granted
  United Policyholder
Jul 14 2008Amicus curiae brief filed
  The application of United Policyholders for permission to file an amicus curiae brief in support of petitioners is hereby granted. An answer thereto may be served and filed by any party wihtin twenty days of the filing of the brief.
Jul 17 2008Permission to file amicus curiae brief granted
  The application of Consumer Attorneys of California for permission to file an amicus curiae brief in support of petitioner is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Jul 17 2008Amicus curiae brief filed
  Consumer Attorneys of California in support of the petitioner, by Antony Stuart, Counsel
Jul 18 2008Permission to file amicus curiae brief granted
  The application of Consumer Watchdog for permission to file an amicus curiae brief in support of petitioners is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
Jul 18 2008Amicus curiae brief filed
  Consumer Watchdog in support of petitioners, by Harvey Rosenfield, Counsel
Jul 18 2008Request for judicial notice filed (granted case)
  Consumer Watchdog, non-party, by Harvey Rosenfield, Counsel
Jul 28 2008Request for extension of time filed
  by Farmers New World Life Insurance Company, et al., (real parties in interest) to file response to amicus curiae brief Peter H. Mason, counsel
Jul 28 2008Response to amicus curiae brief filed
  Petitioners' Pauline Fairbanks & Michael Cobb reply to A/C brief Robert S. Gerstein, David L. Sheller, John S. Girardi & Scott A. Marks, counsel
Aug 5 2008Extension of time granted
  On application of Farmers New World Life Insurance and good cause appearing, it is ordered that the time to serve and file the response to the amicus curiae is extended to and including September 8, 2008.
Sep 9 2008Response to amicus curiae brief filed
  counsel for RPI, Farmers New World Life Ins., (8.25(b))
Sep 9 2008Opposition filed
  counsel for RPI, to Motion for Judicial Ntc.of Consumer Watchdog
Feb 3 2009Case ordered on calendar
  to be argued on Wednesday, March 4, 2009, at 9:00 a.m., in San Francisco
Feb 20 2009Filed:
  counsel for petnr., supplemental letter brief of additional authorities.
Feb 24 2009Filed:
  supplemental authorities, from Peter H. Mason, counsel for real parties in interest Farmers New World Life Ins. Co. and Farmers Group, Inc.
Feb 27 2009Request for judicial notice granted
  The Motion for Judicial Notice brought by plaintiffs Fairbanks and Cobb, and filed in this court on January 14, 2008, is denied. The Additional Motion for Judicial Notice brought by plaintiffs Fairbanks and Cobb, and filed in this court on May 6, 2008, is denied. The Motion for Judicial Notice brought by Amici Curiae Consumer Watchdog, and filed in this court on July 9, 2008, is granted.
Mar 3 2009Received:
  counsel for rpi, Letter re: decision filed on 3-2-09 by CA 4/7.
Mar 4 2009Cause argued and submitted
 
Apr 17 2009Notice of forthcoming opinion posted
 
Apr 20 2009Opinion filed: Judgment affirmed in full
  OPINION BY: Kennard, J. joined by: George, C.J., Baxter, Werdegar, Chin, Moreno and Corrigan, JJ.
May 22 2009Remittitur issued
 

Briefs
Jan 14 2008Opening brief on the merits filed
 
Mar 14 2008Answer brief on the merits filed
 
May 8 2008Reply brief filed (case fully briefed)
 
Jul 9 2008Amicus curiae brief filed
 
Jul 14 2008Amicus curiae brief filed
 
Jul 17 2008Amicus curiae brief filed
 
Jul 18 2008Amicus curiae brief filed
 
Jul 28 2008Response to amicus curiae brief filed
 
Sep 9 2008Response to amicus curiae brief filed
 
Brief Downloads
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Fairbanks v Sup. Ct. - Opening Brief on the Merits.pdf (2497775 bytes) - Opening Brief on the Merits
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Fairbanks v Sup. Ct. - Answer Brief on the Merits.pdf (1529721 bytes) - Answer Brief on the Merits
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Fairbanks v Sup. Ct. - Reply Brief on the Merits.pdf (1796429 bytes) - Reply Brief on the Merits
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Fairbanks v Sup. Ct. - Consumer Watchdog Amicus.pdf (1703010 bytes) - Consumer Watchdog Amicus Brief
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Fairbanks v Sup. Ct. - Consumer Attys of CA Amicus.pdf (1008869 bytes) - Consumer Attorneys of California Amicus Brief
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Fairbanks v Sup. Ct. - United Policyholders Amicus.pdf (1163381 bytes) - United Policyholders Amicus Brief
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Fairbanks v Sup. Ct. - Am. Council of Life Insurers Amicus.pdf (563737 bytes) - American Council of Life Insurers Amicus Brief
If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website
Apr 29, 2010
Annotated by adelinaa

By: Adelina Acuña
Justice Kennard, writing for a unanimous court, found that life insurance policies are not “goods” or “services” within the meaning of the Consumer Legal Remedies Act (“CLRA”), and are therefore not subject to the Act’s provisions. The Court of Appeals’ decision upholding the trial court’s dismissal of plaintiffs’ CLRA claims against Farmer’s Mutual Life Insurance was thus affirmed.

The CLRA protects California consumers from fraud and deceptive practices in the sale of “goods” or “services,” the latter of which is defined as “work, labor, and services for other than a commercial or business use.” Reminding the Court that the CLRA mandates liberal construction in consumers’ favor, Plaintiffs argued that the sale of life insurance is itself a service within both a dictionary and statutory definition of the word. The Court, however, rejected Plaintiffs’ characterization of insurance as a risk-shifting service and sided instead with Farmer’s Mutual Life Insurance, the real party in interest, finding that insurance is actually a contract of indemnification. This finding was consistent with dicta from an earlier opinion, Civil Service Employees Ins. Co. v. Superior Court (1978), in which the Court remarked explicitly that insurance was not a good or service under the CLRA. Because the Court considered the statute unambiguous, the liberal construction mandate did not apply.

The Court supported its conclusion with an analysis of the CLRA’s legislative history. The CLRA was adapted from the National Consumer Act (“NCA”), a model act drafted by the National Consumer Law Center. The NCA definition of “service” incorporates a list of examples, including insurance, which the CLRA conspicuously omits. Plaintiffs interpreted that omission to mean that the California legislature did not want to constrain the scope of the CLRA unnecessarily; in fact, no draft of the CLRA ever included a list of examples, and no mention of insurance had ever been deleted from the legislation. The Court, however, pointed to the separate Unruh Act, passed while the CLRA was being debated, which includes “insurance” in its definition of “services.” Because the legislature was aware of this other definition, the Court reasoned, the omission from the CLRA must have been conscious and purposeful.

Lastly, the Court rejected the argument by both Plaintiffs and Amici that Proposition 103, a 1988 amendment to the Insurance Code subjecting insurance business to “the laws of California applicable to any other business,” demands application of the CLRA to the life insurance policies at issue here. The Court noted that Proposition 103 did not apply to life insurance, and even if it did, the CLRA is not a law that applies to all other businesses generally.

-Adelina Acuña