On August 1, 2013, the California Supreme Court ruled in Zhang v. The Superior Court of San Bernardino County, No. S178542 (Cal. Aug. 1, 2013) that insurance practices violating the state’s Unfair Insurance Practices Act (UIPA) may also support a first-party action under California’s Unfair Competition Law (UCL).
The UCL prohibits acts of “unfair competition,” which are defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code§ 17200. By prohibiting “any unlawful” business act or practice, the UCL generally makes violations of other laws independently actionable via first-party claims. Yet in a previous ruling, the California Supreme Court held that the UIPA does not “create a private cause of action against an insurer that commits one of the various acts listed [in the Insurance Code].” Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal.3d 287, 304-05 (1988). The majority’s decision in Zhang partly resolved an ambiguity that arose after the Moradi-Shalal ruling regarding the viability of UCL claims against insurers whose practices allegedly violate the UIPA.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Topics: Fraud, Insurers, Misleading Impressions, Misleading Statements, Unfair Competition, Unfair Insurance Practices Act
Published In: Business Torts Updates, General Business Updates, Communications & Media Updates, Consumer Protection Updates, Insurance Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Sutherland Asbill & Brennan LLP | Attorney Advertising