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Vol. 9 - Issue 2
February 26, 2020
At Least One Insurance New Year’s Resolution Kept! Imagine That!
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In the last issue of Coverage Opinions I set out my insurance new year’s resolution for 2020, including this one: I resolve to solve the mystery why many declarations pages state that the policy periods are from 12:01 Standard Time. Most of the country is on Daylight Saving Time for half the year.
Thanks to a long-time and wise CO reader -- Patrick McCoy, Managing Counsel for Travelers in St. Paul -- I can check at least one resolution off the list as having been kept! Patrick sent me the following very impressive explanation of the standard time issue:
Prior to the enactment of the Uniform Time Act of 1966, 15 U.S.C. § 260(a), some courts defined daylight saving time (sun time) and standard time separately and applied whichever the contract explicitly referred to, regardless of the actual time in use in the state at the time of the occurrence or expiration. See, e.g., Seligson v. Fireman’s Fund Indemn. Co., 196 N.E. 611 (N.Y. 1935); Goodman v. Caledonian Ins. Co. of Scotland, 118 N.E. 523 (N.Y. 1917).
Since the Uniform Time Act was enacted, courts have typically held that standard time refers to the time currently in use in the state because that statute “advance[s]” standard time during the daylight saving time period. Thus, the advanced time becomes standard time during the 7+ months of the year that daylight saving time is in effect. 15 U.S.C. § 260(a) (“[T]he standard time of each zone established by sections 261 to 264 of this title, as modified by section 265 of this title, shall be advanced one hour and such time as so advanced shall for the purposes of such sections 261 to 264, as so modified, be the standard time of such zone during such period.”). See also 49 C.F.R. § 71.2 (“The Uniform Time Act of 1966… requires that the standard time of each State observing Daylight Saving Time shall be advanced 1 hour beginning at 2:00 a.m. on the first Sunday in April of each year and ending at 2:00 a.m. on the last Sunday in October. This advanced time shall be the standard time of such zone during such period.” (emphasis added)).
Two insurance-specific cases have held that “standard time” in an insurance policy refers to the current time in any given state. In Empire Fire & Marine Ins. Co. v. Continental Cas. Co., 426 F. Supp. 2d 329 (D. Md. 2006), the court concluded that “daylight saving time is the ‘standard time’ when daylight saving time is in effect.” Id. at 331. Likewise, in Miracle Auto Center v. Superior Court, 80 Cal. Rptr. 2d 587 (Cal. App. 1988), the court held that “standard time,” as used in a commercial general liability insurance policy to determine coverage expiration, meant the time currently in use in the state whether standard time or daylight saving time is in effect.
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Me again. It was neat to see that at least two courts have addressed the “standard time “ issue. Needless to say, it takes very usual and rarely-occurring facts for the issue to arise. Cases in point:
If you like minutiae and technical arguments, you’ll love this one from Empire Fire & Marine Ins. Co. v. Continental Cas. Co.: “Empire acknowledges that the underlying accident occurred on May 7, 2004 at 12:28 a.m., but contends that its policy was not yet in effect. To be more precise, Empire claims that since daylight saving time was in effect in New Jersey on the date of the loss, the accident actually occurred on May 6, 2004 at 11:28 p.m. ‘standard time.’ Accordingly, it is CNA’s policy -- which did not expire until May 7, 2004 at 12:01 a.m. “standard time” -- that was in effect at the time of the loss.”
But, as noted above in Patrick’s discussion of Empire Fire & Marine, “daylight saving time is the ‘standard time’ when daylight saving time is in effect.” Thus, the court concluded that the accident took place at 12:28 a.m. “standard time.” Empire’s policy was in effect at the time of the accident and not CNA’s.
Then there’s this from Miracle Auto Center v. Superior Court: “Pacific denied petitioner’s fire claim loss because the policy had been canceled as of 12:01 a.m. on June 29, 48 minutes before the fire was discovered. Petitioner sued alleging bad faith and breach of contract and requesting declaratory judgment that the loss happened before the cancellation of the policy. Petitioner sought summary adjudication challenging Pacific’s affirmative defense that the policy cancellation was effective before the fire occurred. Petitioner contended the plain meaning of the policy term “standard time” meant standard Pacific time. Thus, because daylight saving time was in effect, the fire had actually been discovered one hour earlier at 11:49 p.m. on June 28, 1997.”
But, as noted above in Patrick’s discussion of Miracle Auto Center, the court concluded that “standard time,” as used in a CGL policy, means the time currently in use in the state, whether standard time or daylight saving time is in effect.
Thanks to Patrick McCoy for, uh, shedding light on the standard time issue. Now if he could just get me to the gym a little more frequently!
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