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Procedural Posture

Steffy Alen
Procedural Posture

Defendants insurer and claims manager sought review of the judgment of the Superior Court, Los Angeles County (California), for plaintiff insured in his action for tortious breach of insurance contract.

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Overview

After initially denying plaintiff insured’s claim for uninsured motorists coverage, defendants insurer and claims manager paid plaintiff $ 30,000 in full settlement of his claim. Plaintiff’s suit against defendants for tortious breach of the insurance contract continued, and the trial court entered judgment for plaintiff after permitting, over defendants’ objection, evidence of defendants’ responsive pleadings as proof that defendants acted in bad faith in initially denying the claim. Defendants sought review, and the court reversed, finding that the pleadings were improperly introduced. The court found that the trial court erred to the extent it found the responsive pleadings relevant to prove that defendants breached the covenant of good faith and fair dealing. Further, no evidence was presented that plaintiff was damaged as the result of defendants’ purportedly bad faith litigation tactics. Defendants had an absolute right to defend against plaintiff’s claim, which necessarily included the right to litigate the correctness of its original position, before conceding coverage, and it was error to turn the pursuit of that right into evidence of bad faith.

Outcome

The court reversed the judgment for plaintiff insured in his action for tortious breach of contract against defendants insurer and claims manager, finding that it was error to introduce defendant’s responsive pleadings as proof of bad faith in initially denying plaintiff’s claim for uninsured motorist coverage.

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