Genuine Dispute Doctrine Precludes Bad Faith Claim Reaffirmed by District Court

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Barger & Wolen LLP Secures Summary Judgment On Behalf of Client

District Court Reaffirms “Genuine Dispute Doctrine,” Precludes Bad Faith Claim

LOS ANGELES –On November 29, 2013, United States District Court Judge Margaret M. Morrow granted summary judgment to Barger & Wolen LLP client Mitsui Sumitomo Insurance Company of America in Lucky Leather Inc. v. Mitsui Sumitomo (Case No. CV12-09510-MMM).  Lead attorneys Stephen Klein and Peter Sindhuphak were successful in convincing the Court that the insured had failed to raise a triable issue that benefits under the Mitsui Sumitomo policy were owed. 

The Court found that not only did plaintiff fail to produce evidence that the claimed loss of leather goods from water damage was covered, but that the insurer’s reasonableness in the claims-handling process was indisputable,” says Klein, a partner in the firm’s Los Angeles office. “Under the “genuine dispute” doctrine, absent any evidence that the insurer’s coverage determination was unreasonable, the insurer was not in violation of the covenant of good faith and fair dealing.”

Judge Morrow’s decision relies upon both state and federal California cases allowing a trial court to conclude, as a matter of law that an insurer’s denial of a claim is not unreasonable, so long as there existed a genuine issue as to the insurer’s liability at the time the claim decision was made. 

The Genuine Dispute Doctrine is designed for cases like this where there was clear evidence that the insurer’s coverage determination was based on a thorough investigation of the claim and its actions in concluding that there was no coverage were indisputably reasonable given the facts and the policy language,” said Stephen Klein.