Key System Transit Lines v. Pacific Employers Insurance Co.

Plaintiffs sought reformation of a policy of workmen’s compensation insurance issued by the defendant insurance company, and also damages for alleged breach of the terms of the policy as reformed. Defendants successfully interposed the defense of illegality to defeat such reformation and enforcement. From the judgment accordingly entered, plaintiffs appeal.

The main question to be determined is whether the policy, in the event of its reformation, would have been illegal and therefore unenforceable. Our review of the pertinent statutes leads us to the conclusion that the trial court properly so…