and policies would be more impaired if its law were not applied. Id. (citing Bernhard v. Harrah's Club, 16 Cal.3d 313, 320, 128 Cal.Rptr. 215, 219, 546 P.2d 719, 723 (1976)). The view taken by some California courts that the law of the forum will be displaced only where a compelling reason exists has been overruled, implicitly by Bernhard, supra, and explicitly by Cable v. Sahara Tahoe Corp., 93 Cal.App.3d 384, 393, 155 Cal. Rptr. 770, 776 (1979). See Forwarders Transport, 537 F. Supp. at 639.
Application of Choice of Law Rules
Both California and Pennsylvania require that every standard form fire insurance contract contain a one-year limitation-of-suit provision. See Calif. Insurance Code § 2071 (West 1972); 40 P.S. § 636 (Purdon 1971). In this respect, the states do not differ.
Plaintiff refers, however, to the case of Zurn Engineers v. Eagle Star Ins. Co., 132 Cal.Rptr. 206, 61 Cal.App.3d 493 (1976), arguing that under Zurn, the Complaint would not be time-barred. See Plaintiff's Brief in Opposition to Motion to Dismiss, at 4. Plaintiffs argue that the limitations-of-suit provision began to run on April 4 and 5, 1982, the dates they were required to cooperate with the insurance company by giving deposition testimony. Since the lawsuit was filed on December 2, 1982, Plaintiffs argue that the limitations-of-suit provision was not violated. Id.
Initially, we must decide whether California's insurance law was intended to cover the case at bar. We conclude that it was not so intended. Plaintiffs' policy was issued in Pennsylvania while Plaintiffs were Pennsylvania residents. The policy covered real estate located in Pennsylvania.
A state clearly has a strong interest in having its own laws govern the purchase and issuance of insurance on real property within its boundaries. To permit parties to avoid application of a state's laws merely by subsequently moving to another state would be an open invitation to forum shopping. See Roesgen v. American Home Products Corp., 719 F.2d 319, 321 (9th Cir. 1983).
Similarly, we do not believe that California has a strong interest in applying its insurance laws to transactions which occur wholly in other states, at points in time when neither of the parties to the transaction were citizens of California. To hold otherwise would, in the context of our highly-mobile society, provide intolerable uncertainty in contractual relations. We hold that no conflict exists between the law of California and the law of Pennsylvania; thus, "we can give effect to the common policy of both states to enforce lawful contracts and sustain [Pennsylvania's] interest in protecting its residents and their reasonable expectations growing out of a transaction substantially related to that state without subordinating any interest of [California]." Bernkrant v. Fowler, 55 Cal.2d 588, 594, 12 Cal. Rptr. 266, 360 P.2d 906, 909 (1961).
Even had we found California law applicable, we do not believe that Zurn Engineers v. Eagle Star Ins. Co., 132 Cal.Rptr. 206, 61 Cal.App.3d 493 (1976) governs the present case. In Zurn, a California appellate court grappled with the definition of the phrase "inception of the loss" for purposes of a limitations-of-suit provision.
The Plaintiff in Zurn was engaged in a major construction project with the City of Palo Alto in which certain pipes involved in the construction were damaged. After the damage, both parties negotiated as to whether the cause of the damage lay in construction processes or design. Design defects were not covered by the policy, and Zurn initially sought to have the City accept responsibility under this theory. 206 Cal.Rptr. at 210. Since the insurer required a sworn statement as to the cause of damage, Zurn was foreclosed from taking an inconsistent position with its insurer during the negotiations with the City. When the City denied liability on a theory of design defect, Zurn filed a proof of loss statement with its insurer on a different theory. It brought suit against its insurer nine months later, and 25 months after the damage occurred. Id. at 210.
The California appellate court held that, under these facts, the running of the statutory period governing limitations of suits was deferred until a position seeking to attach liability to a third party proves unavailing to the Plaintiff. Id. We find the case limited to these facts, and find nothing to indicate a shift in policy to extend protection to insurance transactions occurring between citizens of states other than California before changes of domicile.
As stated, 40 P.S. § 636 provides that all standard fire insurance contracts prepared in Pennsylvania must contain a one-year limitation of action provision. The Pennsylvania Supreme Court has consistently upheld the validity of this provision and, further, has ruled that the insurer need not show prejudice in order to assert the limitation provision as a defense. See Schreiber v. The Pennsylvania Lumbermen's Mutual Insurance Company, 498 Pa. 21, 444 A.2d 647 (1982); Petraglia v. The American Motorists Insurance Company, 498 Pa. 32, 444 A.2d 653 (1982); General State Authority v. Planet Insurance Company, 464 Pa. 162, 346 A.2d 265 (1975); Lardas v. Underwriters Insurance Company, 426 Pa. 47, 231 A.2d 740 (1967).
Since Pennsylvania law controls this question, we hold that the one-year limitation of action provision embodied in the insurance contract at issue is valid. Since the Plaintiffs did not file their claim within this prescribed period, their claim is untimely and must therefore be dismissed.
AND NOW, to-wit, this 5th day of November, 1984, in accordance with the foregoing Opinion, it is hereby ORDERED, ADJUDGED and DECREED that Defendant's Motion to Dismiss be and hereby is GRANTED.
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