California Court of Appeal

Hill v. State Farm Mut. Auto. Ins. Co., B194463

In a class action alleging breach of duty to pay dividends, summary judgment for defendant based on the business judgment rule is affirmed where: 1) defendant's Board could properly rely on information from defendant's management and actuarial department in its deliberative process; 2) the Board was sufficiently informed to make independent decisions about dividends; 3) defendant did not commit fraud; and 4) a challenge to the business judgment rule must challenge the decision-making process, not its substance.

Appellate Information

• Decided 09/19/2008
• Published 09/19/2008

Judges

• MALLANO, J.*

Court

• California Court of Appeal

Counsel

• For Appellant:
  
• Hennigan, Bennett & Dorman, J. Michael Hennigan, Robert L. Palmer, Mark Anchor Albert, Los Angeles;  Gianelli & Morris, Timothy J. Morris, Los Angeles;  Ernst & Mattison, Raymond E. Mattison, San Luis Obispo;  Law Offices of Robert S. Gerstein and Robert S. Gerstein, Santa Monica, for Plaintiffs and Appellants.


• For Appellees:
  
• Skadden, Arps, Slate, Meagher & Flom, Raoul D. Kennedy, Joren S. Bass, San Francisco, Sheila L. Birnbaum, Douglas W. Dunham, Ellen P. Quackenbos;  Heller Ehrman, Paul Alexander, Mennlo Park;  Robie & Matthai and James R. Robie, Los Angeles, for Defendant and Respondent., Sonnenschein Nath & Rosenthal and Barry Leigh Weissman, Los Angeles, for National Association of Insurance Commissioners as Amicus Curiae on behalf of Defendant and Respondent., Sedgwick, Detert, Moran & Arnold and Christina J. Imre, Los Angeles, for Association of California Insurance Companies, American Insurance Association and Pacific Association of Domestic Insurance Companies as Amici Curiae on behalf of Defendant and Respondent., Katten Muchin Rosenman, Stuart M. Richter and David M. Newman, Los Angeles, for National Association of Mutual Insurance Companies as Amicus Curiae on behalf of Defendant and Respondent., Dewey & LeBoeuf, Dean Hansell and Sharon C. Corda, Los Angeles, for National Conference of Insurance Legislators as Amicus Curiae on behalf of Defendant and Respondent., Horvitz & Levy, Barry R. Levy, Jeremy B. Rosen and S. Thomas Todd, Encino, for Personal Insurance Federation of California as Amicus Curiae on behalf of Defendant and Respondent., Lisa Madigan, Attorney General of the State of Illinois;  and Robert E. Wagner for Illinois Division of Insurance as Amicus Curiae on behalf of Defendant and Respondent., Greenberg Traurig, Carol Livingston and J. Adam White for Freedom Works as Amicus Curiae on gehalf of Defendant and Respondent.