Justices Refuse Insurers’ Bid to Contest Quake Claims Bill

The California Supreme Court refused Wednesday to rule on the constitutionality of a new state law that gives Northridge earthquake victims a year to reopen damage claims against insurance companies.

The court gave no reason for declining to take the case. A lawyer for the insurance companies that had filed the petition seeking court action acknowledged it is rare for such requests to be granted.

“It’s very tough to get these. . . . We knew that going in [but] we felt there was a valid basis for seeking such review, so it was worth the effort,” said Ellis Horvitz, an Encino attorney.

He said several legal avenues are still open to the companies, including an appeal directly to the U.S. Supreme Court. He said his clients--the Assn. of California Insurance Companies, the Personal Insurance Federation of California and the National Assn. of Independent Insurers--have not decided whether they will continue to pursue the issue.

Horvitz had argued that the new law was unconstitutional because it altered hundreds of thousands of contracts between policyholders and insurance companies by allowing earthquake victims an additional year--from Jan. 1, 2000 to Jan. 1, 2001--to revive claims.

The law was passed in reaction to the scandal surrounding former Insurance Commissioner Chuck Quackenbush, who reached secret settlements with six insurance companies that allowed them to made donations to nonprofit foundations rather than face possible fines for mishandling Northridge claims.

The scandal forced Quackenbush to resign from office last summer.