Bad Faith

February 16.2010

Insurer Misconduct: Testing the Reach of the UCL

In Zhang v. The Superior Court of San Bernardino County, E047207 (Super.Ct No. CIVVS707287), the Court of Appeal addressed the issue of whether an insured could bring a claim against an insurer under the Unfair Competition Law (“UCL”), based on an insurer’s violations of California’s Unfair Insurance Practices Act (“UIPA”). Reversing the trial court, the Court of Appeal held that existing precedent did not bar such a claim. In Moradi-Shalal v. Fireman’s Fund Ins. Co., 46 Cal.3d 287 (1998), the California Supreme Court held that there is no private cause of action under Section 790.03 of the California Insurance Code,...

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July 02.2009

Do California Courts Have Authority to Sanction Insurers for Bad Faith Settlement Negotiation?

At least one court, in a recent decision out of California’s second appellate district, has answered no to that question. In Vidrio v. Hernandez, the court reversed an order imposing sanctions on an insurer for failing to negotiate in good faith at a settlement conference. The court held that even if the insurer’s conduct had not been in good faith, there was no authority under California statute, the Rules of Court or any local rule for sanctioning the insurer. The Vidrio case involved personal injury claims brought by two plaintiffs injured in a car accident. Defendant’s insurer, Mercury Insurance Company,...

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April 03.2009

California Court of Appeal Holds Genuine Dispute Doctrine Inappropriate For Jury Instruction In Bad Faith Case

The California Court of Appeal for the Second District recently affirmed a trial court’s refusal to include an insurer’s proposed jury instructions on the “genuine dispute” doctrine in a bad faith case. McCoy v. Progressive West Insurance Co., 171 Cal. App. 4th 785, 793-794 (2009). McCoy limited the “genuine dispute” doctrine to the summary judgment context, holding that a jury should be allowed to determine for itself what facts are relevant to the reasonableness of an insurer’s coverage denial. Under the “genuine dispute” doctrine, an insurer may be entitled to summary judgment on a bad faith claim if “there is...

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