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Bad Faith Insurance

Bad Faith Insurance Lawyers – California and Arizona cases!

CA AZ insurance litigation and arbitration lawyers bad faith

Introduction

Our law firm helps Clients in both Arizona and California deal with wrongful denial of insurance claims including denial of life insurance death benefits.  These claims can involve a variety of different legal claims and theories and may proceed against multiple defendants including the insurance broker, insurance agents, any intermediaries, and the insurance company.  The causes of action may involve the following legal theories:

  1. Breach of contract
  2. Bad faith
  3. Breach of fiduciary duty
  4. Fraud
  5. Negligent Misrepresentation
  6. Intentional Misrepresentation
  7. Breach of implied covenant of good faith and fair dealing
  8. Financial Elder Abuse
  9. Other

When dealing with insurance companies, you need to know your legal rights and you need to understand how an insurance company functions and what they will consider relevant versus irrelevant when you are making a claim on your insurance. Whether your claim involves a first-party or third-party insurance claim, we can help you.  Whether you are an individual, company, homeowner, or beneficiary under a life insurance policy of insurance or other insurance policy and are being treated unfairly, contact us to discuss your case by calling (877) 276-5084.

California Jury Instructions – Bad Faith Insurance!

Here is what the Plaintiff will need to prove to make their case for bad faith insurance (which could trigger the right to recover PUNITIVE DAMAGES which could blow the case wide open and result in significant monetary damages):

  1. CACI 2332First party bad faith – failure to properly investigate the claim

These instructions are used when you have a “first party” insurance claim (this means the case deals with the Plaintiff, who is the insured, and the Defendant, who is the insurance company).

In a “failure to investigate” bad faith insurance case the jury is instructed:

“[Name of defendant] acted unreasonably or without proper cause if it failed to conduct a full, fair, and thorough investigation of all of the bases of the claim. When investigating [name of plaintiff]’s claim, [name of defendant] had a duty to diligently search for and consider evidence that supported coverage of the claimed loss.”

Duty to investigation explained in a case dealing with Old Republic Ins. Co.:

“The insurance company breached the covenant of good faith and fair dealing because it did not fulfill its obligation to protect the interest of its insured. When investigating a claim, an insurance company has a duty to diligently search for evidence which supports its insured’s claim. If it seeks to discover only the evidence that defeats the claim it holds its own interest above that of its insured.”

See Mariscal v. Old Republic Life Ins. Co., 42 Cal. App. 4th 1617, 1620, 50 Cal. Rptr. 2d 224, 225 (1996), as modified (Mar. 28, 1996), as modified (Mar. 29, 1996).

      2.  Failure to pay / delay of payment cases (first party cases) – CACI 2331

This instruction to the jury is used when the Defendant insurance company fails to pay or wrongfully delays the claim without a valid reason for doing so:

[Name of plaintiff] claims that [name of defendant] breached the obligation of good faith and fair dealing by unreasonably [failing to pay/delaying payment of] insurance benefits. To establish this claim, [name of plaintiff] must prove all of the following:

1. That [name of plaintiff] suffered a loss covered under an insurance policy with [name of defendant];

2. That [name of defendant] was notified of the loss;

3. That [name of defendant] unreasonably [failed to pay/ delayed payment of] policy benefits;

4. That [name of plaintiff] was harmed; and

5. That [name of defendant]’s unreasonable [failure to pay/ delay in payment of] policy benefits was a substantial factor in causing [name of plaintiff]’s harm.

Keep in mind, it is the Plaintiff that bears the “burden of proof” to show the elements above.  The Defendant is entitled to raise and prove their “affirmative defenses” to try to defeat the claim.  Keep in mind, not all denials of benefits will be automatically be deemed to be “bad faith.”  As one court in CA noted:

“It is now clear under California law that an insurer’s erroneous failure to pay benefits under a policy does not necessarily constitute bad faith entitling the insured to recover tort damages. The ultimate test of bad faith liability in the first party cases is whether the refusal to pay policy benefits was unreasonable.”  See Austero v. National Cas. Co. (1978) 84 Cal.App.3d 1, 32, 148 Cal.Rptr. 653, emphasis in original, (overruled on other grounds in Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 824, fn. 7, 169 Cal.Rptr. 691, 620 P.2d 141); see also Gourley v. State Farm Mut. Auto. Ins. Co. (1991) 53 Cal.3d 121, 127, 279 Cal.Rptr. 307, 806 P.2d 1342.) In other words, “before an insurer can be found to have acted tortiously, i.e., in bad faith, in refusing to bestow policy benefits, it must have done so ‘without proper cause.’
See Opsal v. United Servs. Auto. Assn., 2 Cal. App. 4th 1197, 1205, 10 Cal. Rptr. 2d 352, 356-57 (1991).
3.  CACI 2302 – Breach of Contract for Temporary Life Insurance (First Party):
When a payment is made equal to the full first premium at the time an application for life insurance other than group life insurance is signed by the applicant and either:
(1) the applicant received at that time a receipt for said payment on a form prepared by the insurer,
or
(2) in the absence of such a receipt the insurer receives the said payment at its home office, branch office, or the office of one of its general agencies, and in either case the insurer, pursuant to its regular underwriting practices and standards, approves the application for the issuance by it of a policy of life insurance on the plan and for the class of risk and amount of insurance applied for, and the person to be insured dies on or after the date of the application, on or after the date of the medical examination, if any, or on or after any date specially requested in the application for the policy to take effect, whichever is later, but before such policy is issued and delivered, the insurer shall pay such amount as would have been due under the terms of the policy in the same manner and subject to the same rights, conditions and defenses as if such policy had been issued and delivered on the date the application was signed by the applicant.
In these circumstances, if the insurer fails to pay a legal action may be appropriate.  Here are the jury instructions for this legal violation:
Essential Factual Elements [Name of plaintiff] claims that [name of defendant] breached an agreement to pay life insurance benefits.  To establish this claim, [name of plaintiff] must prove all of the following:
1. That [name of defendant] or its authorized agent received [name of decedent]’s application for life insurance;
2. That [name of decedent] paid the first insurance premium;
3. That [name of decedent] died [on/after/before] [insert relevant date];
and
4. The amount of the insurance benefits that [name of defendant] failed to pay.

What is the implied covenant of good faith and fair dealing?

According to one California court:

“In addition to the duties imposed on contracting parties by the express terms of their agreement, the law implies in every contract a covenant of good faith and fair dealing. (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658, 328 P.2d 198; see also Comment, Extending the Insurer’s Duty of Good Faith and Fair Dealing to Third Parties Under Liability Insurance Policies (1978) 25 UCLA L.Rev. 1413, 1418-1424.) The implied promise requires each contracting party to refrain from doing anything to injure the right of the other to receive the benefits of the agreement. (Murphy v. Allstate Ins. Co. (1976) 17 Cal.3d 937, 940, 132 Cal.Rptr. 424, 553 P.2d 1584; Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425, 429, 58 Cal.Rptr. 13, 426 P.2d 173; Comunale v. Traders & General Ins. Co., supra, 50 Cal.2d at p. 658, 328 P.2d 198.) The precise nature and extent of the duty imposed by such an implied promise will depend on the contractual purposes.  This court has previously addressed the extent of the duties imposed by the implied covenant in liability insurance policies. (Johansen v. California State Auto Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9, 123 Cal.Rptr. 288, 538 P.2d 744; Crisci v. Security Ins. Co., supra, 66 Cal.2d 425, 58 Cal.Rptr. 13, 426 P.2d 173; Comunale v. Traders & General Ins. Co., supra, 50 Cal.2d 654, 328 P.2d 198.) We there held that the insurer, when determining whether to settle a claim, must give at least as much consideration to the welfare of its insured as it gives to its own interests.”
See Egan v. Mut. of Omaha Ins. Co., 24 Cal. 3d 809, 818, 620 P.2d 141, 145 (1979).

What damages are available in an insurance bad faith case?

A wide variety of damages are available for a bad faith insurance violation.  The relevant jury instruction on this issue is CACI 2350 which notes:

“Damages for Bad Faith – if you decide that [name of plaintiff] has proved [his/her/its] claim against [name of defendant], you also must decide how much money will reasonably compensate [name of plaintiff] for the harm. This compensation is called “damages.” The amount of damages must include an award for all harm that was caused by [name of defendant], even if the particular harm could not have been anticipated.

[Name of plaintiff] must prove the amount of [his/her/its] damages. However, [name of plaintiff] does not have to prove the exact amount of damages that will provide reasonable compensation for the harm.

You must not speculate or guess in awarding damages.

The following are the specific items of damages claimed by [name of plaintiff]:

1. [Mental suffering/anxiety/humiliation/emotional distress;] [and]

2. [The cost of attorney fees to recover the insurance policy benefits;] [and]

3. [Insert other applicable item of damage.] [No fixed standard exists for deciding the amount of damages for [insert item of mental or emotional distress]. You must use your judgment to decide a reasonable amount based on the evidence and your common sense.]

[To recover for future [insert item of mental or emotional distress], [name of plaintiff] must prove that [he/she] is reasonably certain to suffer that harm.]

[To recover attorney fees [name of plaintiff] must prove that because of [name of defendant]’s breach of the obligation of good faith and fair dealing it was reasonably necessary for [him/her/it] to hire an attorney to recover the policy benefits. [Name of plaintiff] may recover attorney fees [he/she/it] incurred to obtain policy benefits but not attorney fees [he/she/it] incurred for other purposes.

Also note, bad faith insurance cases can potentially take on an attorney fees element if the insured who was denied with an “elder” (over 65 years of age at the relevant time), and their premiums, fees, charges, and other property are taken from them in bad faith.  We discuss more about the California financial elder abuse statutes in other blogs.

Our Insurance litigation & arbitration Services

1.  Bad faith denial of life insurance benefits (arbitration, mediation, litigation, demand letters);

2.  Insurance broker breach of fiduciary duty (ex. failure to advise of two-year contestability clauses and other wrong-doing);

3.  Financial elder abuse (fraud, churning, annuities, double broker commissions, etc.)

4.  Insurance claims disputes (auto, homeowner, disability, life insurance, D &O, cyber insurance policies etc.)

5.  Insurance subrogation cases

6.  Filing insurance complaints with the insurance commissioner [California form | Arizona form]

Contact us at (877) 276-5084 if there are insurance disputes you are facing that are not listed on this page.

Insurance statutes & references

Here are some of the key insurance laws and resources in California & AZ:

1.  California insurance code

2.  Arizona insurance code

3.  California insurance commissioner’s office

4.  Arizona insurance commissioner’s office

5.  CA Bad faith law jury instructions (CACI)

6.  AZ bad faith insurance jury instructions

Publications & blogs

Here are a few helpful blogs we have written

1.  Annuities & bad faith insurance denial of life benefits

2.  Understanding California bad faith insurance law

3.  Do insurance brokers owe a fiduciary duty to their clients?

4.  Should I hire a public adjuster or lawyer?

5.  Sample letter dealing with insurance denials

6.  Insurance companies who try to rescind life insurance contracts

Helpful videos

1.  What is insurance subrogation

2.  Flexible fees for insurance subrogation cases

What cities do you serve?

Our law firm is licensed to practice law in California and Arizona. We serve clients throughout these two states including:

  1.  San Diego area (Carlsbad, LaJolla, Oceanside)
  2. Orange County areas (Newport, Huntington, Orange, Fullerton, Costa Mesa, Laguna, Dana Point, Corona Del Mar)
  3. Los Angeles county
  4. San Francisco / Bay area (including SF, Tiburon, Belvedere, Sausalito, Silicon Valley, Oakland, San Jose and surrounding areas)
  5. Phoenix Arizona (including Maricopa, Pima, Pinal, Coconino, Yavapai, and other counties)

Contact an Insurance Litigation & Arbitration Law Firm

To discuss our insurance law arbitration and litigation services, contact us at (877) 276-5084.  We are licensed to practice law, and handle cases in both California and Arizona bad faith insurance cases.  We look forward to working with you.  We offer free initial consultations and affordable and flexible legal fees which can include taking all or part of your case on a contingency fee basis.