Bad Faith

Bad Faith: Uninsured Motorist Arbitration

By on June 22, 2015 - Comments off

Maslo v. Ameriprise Auto & Home Insurance, (Second District, June 27, 2014) — Cal.Rptr.3d —-, 14 Cal. Daily Op. Serv. 7318, 2014 Daily Journal D.A.R. 8471, 2014 WL 2918866

A man who was injured in a car accident and received an uninsured motorist arbitration award for less than his policy limits, filed an action for bad faith against his insurance carrier. The plaintiff alleged that even though he provided the insurer with all documents concerning liability and damages to fully and fairly evaluate the case, at no time prior to the arbitration hearing did the insurer schedule depositions of treating physicians or interview them, or request a medical examination.  The plaintiff further alleged that the insurer failed to make any offer of settlement, contrary to Insurance Code section 790.03, subdivision (h)(5), which provides that it is an unfair claim settlement practice not to “ ‘attempt[ ] in good faith to effectuate a prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.”

The trial court sustained the insurer’s demurrer without leave to amend, finding that the plaintiff could not allege causation, as the facts did not show that his damages plainly exceeded the uninsured motorist coverage policy limits.  However, the court of appeal reversed, rejecting the carrier’s argument that bad faith could not be shown unless either that the insured’s pre-arbitration damages plainly exceeded the policy limits or that the damages awarded by the arbitrator exceeded the settlement demand: Read the rest »

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Bad Faith: Postclaims Underwriting

By on May 16, 2010 - Comments off

Nazaretyan v. California Physicians’ Service, (Second District, March 23, 2010) — Cal.Rptr.3d —, 182 Cal.App.4th 1601, 2010 WL 1038685, 10 Cal. Daily Op. Serv. 3660

A husband and wife who were denied healthcare insurance benefits relating to the premature birth of their twin girls when Blue Shield rescinded their coverage, filed an action against the carrier, asserting causes of action for bad faith, declaratory relief, and violation of Business and Professions Code section 17200. The plaintiffs alleged that the defendant rescinded their coverage after discovering that the woman had undergone in vitro fertilization, and that the plaintiffs had failed to disclose their previous and ongoing infertility treatment in the original application. The plaintiffs further alleged that Blue Shield had engaged in “postclaims underwriting” in violation of Health and Safety Code section 1389.3, which prohibits healthcare service plans from rescinding, canceling, or limiting a plan contract due to the plan’s failure to complete medical underwriting and resolve all reasonable questions arising from written information submitted on an application.

Blue Shield moved for summary judgment, asserting that its underwriting process was reasonable as a matter of law. The trial court granted summary judgment but the court of appeal reversed, holding that the facts failed to establish as a matter of law that Blue Shield made reasonable efforts to ensure that the application was accurate and complete, and that a reasonable trier of fact could conclude from the evidence that the plaintiffs did not willfully misinform the carrier in their application: Read the rest »

Posted in: Bad Faith