Allied Premier Insurance, a Risk Retention Group; a Connecticut corporation v. United Financial Casualty Company , an Ohio corporation

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALLIED P REMIER
INSURANCE, a Risk
Retention Group; a
Connecticut corporation,
Plaintiff-Appellee,
v.
UNITED FINANCIAL
C ASUALTY C OMPANY , an
Ohio corporation,
Defendant-Appellant.
No. 20-55099
D.C. No.
5:18-cv-00088-JGB-KK
ORDER CERTIFYING
QUESTION TO
CALIFORNIA
SUPREME COURT
Appeal from the United States District Court
for the Central District of California
Jesus G. Bernal, District Judge, Presiding
Argued and Submitted February 11, 2021
Pasadena, California
Filed March 22, 2021
Before: Diarmuid F. O’Scannlain, Consuelo M. Callahan,
and John B. Owens, Circuit Judges.
Order by Judge O’Scannlain

-- 1 of 15 --

2 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
SUMMARY*
Certification to California Supreme Court
The panel certified to the California Supreme Court the
following question:
Under California’s Motor Carriers of
Property Permit Act, Cal. Veh. Code
§§ 34600 et seq., does a commercial
automobile insurance policy continue in full
force and effect until the insurer cancels the
corresponding Certificate of Insurance on file
with the California Department of Motor
Vehicles, regardless of the insurance policy’s
stated expiration date?
* This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

-- 2 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 3
ORDER
O’SCANNLAIN, Circuit Judge:
Pursuant to California Rule of Court 8.548, we certify to
the California Supreme Court the question of law set forth in
Part I of this order. The answer to this question is
determinative of the cause pending before this court, and
there appears to be no controlling precedent in the decisions
of the California Supreme Court or the California Courts of
Appeal.
I
The question to be answered is:
Under California’s Motor Carriers of
Property Permit Act, Cal. Veh. Code
§§ 34600 et seq., does a commercial
automobile insurance policy continue in full
force and effect until the insurer cancels the
corresponding Certificate of Insurance on file
with the California Department of Motor
Vehicles, regardless of the insurance policy’s
stated expiration date?
The California Supreme Court may rephrase the question
as it deems necessary.
II
Counsel for Plaintiff-Appellee Allied Premier Insurance
(“Allied”) is:

-- 3 of 15 --

4 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
Hillary Arrow Booth
Booth LLP
11835 W. Olympic Boulevard, Suite 600E
Los Angeles, CA 90064
(310) 641-1800
Counsel for Defendant-Appellant United Financial
Casualty Company (“United”) is:
Patrick M. Howe
Patrick Howe Law, APC
402 W. Broadway, Suite 1025
San Diego, CA 92101
(619) 398-3422
III
A
United issued a commercial auto insurance policy to José
Porras, a commercial truck driver in California. The
insurance policy went into effect on May 2, 2013. At
Porras’s request, United subsequently submitted a
Certificate of Insurance to the California Department of
Motor Vehicles (“DMV”) to provide evidence of Porras’s
financial responsibility as a motor carrier of property, as
required by California law. Cal. Veh. Code § 34630.
On April 12, 2015, United’s insurance policy lapsed
pursuant to its own terms when Porras failed to renew it.
Nonetheless, a Certificate of Insurance filed by United on

-- 4 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 5
Porras’s behalf remained on file with the DMV due to a
clerical error by United.1
Porras then became insured under a commercial auto
policy issued by Allied, which went into effect on April 13,
2015. Allied submitted a Certificate of Insurance to the
DMV on Porras’s behalf. After April 17, 2015, the DMV
1 The Certificate of Insurance at issue appears to have been filed on
May 2, 2013. The record reveals that United attempted to file a Notice
of Cancellation with the DMV on November 5, 2013 to cancel a
Certificate of Insurance that it had previously filed on Porras’s behalf.
Such Notice of Cancellation was not processed by the DMV, however,
because the policy number or effective date on the Notice of Cancellation
was determined not to be on file. The DMV sent United a Notice of
Incomplete Filing on November 7, 2013 declining to process the Notice
of Cancellation and it does not appear that United responded.
Presumably, the previously filed Certificate of Insurance referenced
in United’s defective November 5, 2013 Notice of Cancellation
remained on file with the DMV. We can only speculate regarding the
precise documentation involved because the parties failed to provide a
complete record with respect to this question.
Nevertheless, we cannot help but remark that the record also
contains a subsequent Notice of Cancellation filed by United on
February 6, 2015, with an effective date of April 12, 2015. There is no
indication in the record that United’s February 6, 2015 filing was
rejected by the DMV. We must assume that the DMV received and
processed the February 6, 2015 filing in the usual course of business, and
that a previously filed Certificate of Insurance referenced in the filing
was canceled.
It appears to us that Allied is relying on a technically defective
Notice of Cancellation from November 5, 2013, notwithstanding the fact
that it must have been fully apprised that United’s insurance policy
terminated on April 12, 2015, and that the DMV accepted and processed
United’s final Notice of Cancellation. This sequence raises a serious
question regarding the equitableness of Allied’s position, which is
discussed further below.

-- 5 of 15 --

6 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
had on file Certificates of Insurance for Porras from both
United and Allied. The record is unclear as to the date of
United’s filed Certificate upon which Allied relies.
On September 1, 2015, Porras was involved in a vehicle
collision with Jennifer Jones, a 24-year-old woman, in
Rialto, California. Jones died as a result of the collision.
Jones’s parents subsequently filed a wrongful death lawsuit
against Porras in California state court. Allied defended
Porras in the lawsuit and ultimately settled the lawsuit for
$1 million. United declined to defend Porras or to contribute
to the settlement of the lawsuit.
B
Allied then sued United in a separate action in California
state court, seeking to recover half of the $1 million
expended to settle the wrongful death action against Porras.
Allied’s complaint states claims for declaratory relief,
equitable contribution, and equitable subrogation.
Allied’s theory is that, because United failed to complete
the necessary steps to cancel the Certificate of Insurance on
file with the DMV, the policy remained in effect by
operation of law at the time of the collision. Accordingly,
Allied contends that United is required to share with Allied
in the costs of settling the wrongful death action against
Porras.
United removed the suit to federal court, invoking
federal diversity jurisdiction under 28 U.S.C. § 1332. The
parties filed cross-motions for summary judgment, each
based on a joint statement of stipulated facts and exhibits.
The district court agreed with Allied and determined that
United’s failure to cancel the Certificate of Insurance on file

-- 6 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 7
with the DMV caused the insurance policy to continue in full
force and effect until the time of the September 1, 2015
collision. The district court proceeded to enter judgment in
favor of Allied, and against United, in the amount of
$500,000.
IV
A
This dispute turns on the proper interpretation of
California’s Motor Carriers of Property Permit Act
(“MCPPA”), Cal. Veh. Code §§ 34600 et seq., the statutory
scheme by which California imposes financial responsibility
requirements on commercial drivers.2 If the MCPPA
requires a commercial auto insurance policy to remain in
effect indefinitely until the insurer cancels the Certificate of
Insurance on file with the DMV, then Allied must prevail. If
not, United must prevail.
The MCPPA was enacted by the California legislature in
1996 to replace the Highway Carriers’ Act (“HCA”). The
MCPPA shifted the responsibility for regulation of
commercial drivers from the California Public Utilities
Commission to the DMV. The ambiguity in this matter is
whether the MCPPA made other modifications to the HCA’s
framework for regulation of commercial drivers.
2 The MCPPA requires motor carriers to prove that they have
adequate protection against liability. Cal. Veh. Code § 34630. Under
the MCCPA, a motor carrier’s failure to provide evidence of adequate
financial responsibility results in suspension of its permit to operate in
California. Id.

-- 7 of 15 --

8 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
1
Under the now-repealed HCA, the California Supreme
Court had made clear that a commercial driver’s insurance
policy would remain in effect, regardless of its stated
expiration date, until the insurer provided written notice to
the Public Utilities Commission that the policy was
canceled. In Transamerica v. Tab Transportation, the
California Supreme Court held that, because an insurer had
failed to provide such notice, the driver’s insurance policy
continued in full force and effect—notwithstanding the
policy’s express terms. 12 Cal. 4th 389, 402–03 (1995).
Accordingly, the first insurer was required to compensate
another insurer that had paid to settle claims against the
driver arising from a collision that occurred years after the
first insurer’s policy had ostensibly expired. Id. at 403.
2
We have reason to doubt that the same principle applies
to the currently-effective MCPPA, however, as the language
of the new statute differs from that of the old one.
The MCPPA revised the HCA’s requirement that a
“policy of insurance” be filed with the Public Utilities
Commission as proof of a driver’s financial responsibility.3
See Cal. Pub. Util. Code § 3631 (West 1995). Today, the
MCPPA requires only the filing of a Certificate of Insurance
with the DMV to verify the driver’s maintenance of adequate
insurance coverage and does not require the filing of the
underlying insurance policy. Cal. Veh. Code § 34630.
3 The HCA authorized the filing of a Certificate of Insurance only
as a substitute for the filing of a physical duplicate of the policy. Cal.
Pub. Util. Code § 3631 (West 1995).

-- 8 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 9
More importantly, the MCPPA modified the HCA’s
requirement that an insurer provide notice to the Public
Utilities Commission prior to cancellation of a motor
carrier’s insurance policy. The old statute had explicitly
prohibited an insurer from cancelling a motor carrier’s
insurance policy without prior written notice to the Public
Utilities Commission. See Cal. Pub. Util. Code § 3634
(West 1995) (“The policy of insurance . . . shall not be
cancelable on less than 30 days’ written notice to the
commission . . . .”).
By contrast, the MCPPA prohibits only an insurer’s
cancellation of a Certificate of Insurance, as distinguished
from an insurance policy, without prior notice to the DMV.
Cal. Veh. Code § 34630(b). (“The certificate of insurance
shall not be cancelable on less than 30 days’ written notice
from the insurer to the department . . . .”); id.
at § 34631.5(b)(3) (“A certificate of insurance, evidencing
the protection [required by § 34631.5(a)], shall not be
cancelable on less than 30 days’ written notice to the
department, the notice to commence to run from the date
notice is actually received at the office of the department in
Sacramento.”). Moreover, the MCPPA requires that each
Certificate of Insurance “contain a provision that the
certificate . . . shall remain in full force and effect until
canceled” in the prescribed manner, but the MCPPA appears
not to impose such a requirement with respect to an
underlying insurance policy. Id. at § 34631.5(b)(4).
3
Thus, it is unclear whether Transamerica’s rule—that a
commercial driver’s insurance policy remains in effect until
the insurer provides notice to the relevant agency that the
policy will be canceled—survives the textual changes
between the HCA and MCPPA. There is no published

-- 9 of 15 --

10 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
California case law addressing this question—indeed, there
appear to be no California precedents interpreting the
MCPPA’s cancellation provisions at all. In light of the
differences between the HCA and the MCPPA, we remain
uncertain whether Transamerica controls the outcome of
this case. Accordingly, we seek guidance from the
California Supreme Court regarding the proper construction
of the new statute.
B
Allied and United set forth sharply contrasting
interpretations of the MCPPA’s cancellation provisions. We
discuss each in turn. As neither view is supported by clearly
controlling California precedent, we ask the California
Supreme Court to assist us in resolving the conflict between
the two positions.
1
According to Allied, the California Supreme Court’s
decision in Transamerica—and the California Court of
Appeal’s decision in Fireman’s Fund Insurance Co. v.
Allstate Insurance Co., 234 Cal. App. 3d 1154 (1991), which
reached a similar outcome—remain binding precedents
under the MCPPA. Allied contends that such precedents
remain controlling despite the above-mentioned
modification of the statutory text because they stand for the
proposition that, under California law, a motor carrier’s
insurance policy continues in full force and effect
indefinitely, regardless of its stated expiration date, until the
insurer follows the prescribed statutory procedure for
cancelling the policy.
Allied’s position was adopted by the district court here.
The district court acknowledged that both Transamerica and

-- 10 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 11
Fireman’s Fund construed the HCA’s cancellation
provisions, and that the MCPPA’s text differs in ways that
might “support[] an inference that the California legislature
purposefully departed from the prior [statutory] language.”
The district court reasoned, however, that even under the
MCPPA, a Certificate of Insurance has no clear purpose
except to serve as evidence that a commercial driver is
covered by an insurance policy that meets the minimum
statutory requirements. Accordingly, the district court
concluded that the MCPPA’s prohibition on cancellation of
a Certificate of Insurance without prior notice to the DMV
has only one ascertainable purpose—viz., to prevent a
commercial driver’s underlying insurance policy from going
out of effect without the DMV’s knowledge.
On Allied’s view, which the district court adopted,
United’s failure to cancel a Certificate of Insurance on file
with the DMV resulted in Porras’s policy with United
continuing in effect, even though such failure was due to a
minor clerical error, and even though the policy had lapsed
by its own terms months earlier. Like the first insurer in
Transamerica, United would be liable to Allied under a
theory of equitable contribution because United’s policy had
been in effect at the time of Porras’s September 1, 2015
collision.
Although Allied’s proposed interpretation results in an
apparent windfall for Allied based on United’s minor clerical
error, this interpretation adheres to the policy-based
reasoning of Transamerica and promotes the DMV’s
enforcement of the MCPPA’s financial responsibility
requirements for commercial drivers. We are uncertain
whether the California Supreme Court would adopt Allied’s
proposed interpretation and follow Transamerica under

-- 11 of 15 --

12 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
these circumstances, particularly in light of the distinct
statutory text.
2
By contrast, United maintains that Transamerica and
Fireman’s Fund are inapplicable to the MCPPA’s
cancellation provisions. According to United, the MCPPA’s
text explicitly departs from the HCA by requiring notice to
the DMV only when the insurer seeks to cancel a Certificate
of Insurance, as distinguished from an insurance policy.
United contends that the MCPPA reflects the California
legislature’s intent to remove third-party notice
requirements for cancellation or termination of a commercial
auto insurance policy.
On United’s view, a commercial driver’s insurance
policy may be terminated by the insurer without notice to the
DMV. Such termination, United argues, would not impair
the statute’s goal of protecting the public because the
Certificate of Insurance itself functions as a “surety” that
obligates the insurer to compensate members of the public in
case of injury by an uninsured or underinsured driver.
United’s position draws support from a substantial body
of federal case law interpreting the federal statutory scheme
for regulation of interstate commercial trucking. See, e.g.,
Carolina Cas. Ins. Co. v. Yeates, 584 F.3d 868, 881 (10th
Cir. 2009) (joining a majority of federal courts of appeals in
recognizing federally mandated motor carrier insurance
endorsement as a surety obligation). Under the federal rule
invoked by United, an insurer’s public filing, like a
Certificate of Insurance, constitutes a distinct legal
obligation to “effectuate a minimum level of recovery for the
injured party,” separate and apart from the terms of any
insurance policy. Id. On this theory, the insurer’s filing of

-- 12 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 13
the Certificate of Insurance renders it an “insurer of last
resort, requiring payment [to an injured third party] only
when no other insurance is available.” Id. at 872.
Thus, if United’s view is correct, United would only be
liable under the circumstances here had Porras failed to
acquire a new insurance policy. Since Porras in fact
acquired a new policy from Allied immediately after his
United policy expired, there could be no recovery from
United based exclusively on a Certificate of Insurance
erroneously kept on file with the DMV.
Although United’s position gives effect to the modified
statutory text and prevents Allied from reaping a windfall, it
is unclear if the California Supreme Court would deem the
federal rule applicable to California’s regulatory scheme.
The federal regulatory scheme is similar, but not identical,
to California’s. And there is no indication in the MCPPA’s
text, or in any other source of California law, that the
Certificate of Insurance has been understood as a surety
obligation. Accordingly, we remain uncertain as to how the
California Supreme Court would address this issue.
V
A
It appears to this court that there is no clearly controlling
precedent of the California Supreme Court or the California
Courts of Appeal establishing the meaning of the statutory
provisions disputed here. The interpretation selected will
have significant public policy implications for California,
extending far beyond the two parties to this case. Indeed,
resolution of this question of statutory interpretation may
impact the scope and operation of California’s regulatory
scheme protecting California drivers and other members of

-- 13 of 15 --

14 ALLIED P REMIER INS . V. UNITED FIN. C AS . C O.
the public from the prospect of injury by uninsured or
underinsured commercial drivers.
Accordingly, “considerations of comity and federalism,”
Mendoza v. Fonseca McElroy Grinding Co., 913 F.3d 911,
912 (9th Cir. 2019) (internal citation omitted), prompt us to
seek guidance from the California Supreme Court, which
remains the primary “expositor[]” of California law,
including the MCPPA, England v. La. State Bd. of Med.
Exam’rs, 375 U.S. 411, 415 (1964). Cf. Pino v. United
States, 507 F.3d 1233, 1236 (10th Cir. 2007) (“In making the
assessment whether to certify, we . . . seek to give meaning
and respect to the federal character of our judicial system,
recognizing that the judicial policy of a state should be
decided when possible by state, not federal, courts.”). We
therefore request that the California Supreme Court accept
and decide the certified question.
B
In light of our decision to certify the question set forth
above, submission of this case is withdrawn, and all
proceedings in this court are stayed pending the California
Supreme Court’s decision whether it will accept review and,
if so, receipt of the answer to the certified question. The
Clerk is directed to administratively close this docket
pending further order. The parties shall notify the Clerk of
this court within one week after the California Supreme
Court accepts or rejects the certified question, and again
within one week after the California Supreme Court renders
its opinion if accepted. The panel will resume control and
jurisdiction upon receipt of an answer to the certified
question or upon the California Supreme Court’s decision to
decline to answer the certified question.

-- 14 of 15 --

ALLIED P REMIER INS . V. UNITED FIN. C AS . C O. 15
The Clerk of this court shall file an original and ten
copies of this order with the clerk of the California Supreme
Court, along with copies of all briefs, and shall file a
certificate of service on the parties. Upon request of the
California Supreme Court, and as the California Supreme
Court deems necessary, the Clerk of this court shall also
transmit the original or copies of portions of the record.
IT IS SO ORDERED.

-- 15 of 15 --