California Court of Appeal

Dismissal of plaintiff-insured's complaint alleging that defendant-insurer breached the implied covenant of good faith and fair dealing by forcing plaintiff-insured to arbitrate his uninsured motorist claim without fairly investigating, evaluating and attempting to resolve it is reversed and remanded, where: 1) the complaint adequately stated a claim for bad faith when it alleged that defendant-insurer, presented with evidence of a valid claim, failed to investigate or evaluate the claim, insisting instead that its insured proceed to arbitration; 2) the insurer's right to resolve a disputed claim through arbitration does not relieve it of its statutory and common law duties to fairly investigate, evaluate and process the claim; 2) the insurer may not escape liability for bad faith simply because the amount ultimately awarded in arbitration was less than the policy limits or the insured's initial demand; and 3) the complaint adequately alleged causation where, as pled, the conduct of defendant-insurer made arbitration inevitable and settlement impossible.

Appellate Information

• Decided 06/27/2014
• Published 06/27/2014

Judges

• MANELLA

Court

• California Court of Appeal

Counsel