Recent Developments in California Bad Faith Law and Related Trends


On July 29, 2014, I spoke on a panel about recent developments in California bad faith law and related trends.  My co-presenter was Robert K. Scott of The Law Offices of Robert K. Scott, and we gave the presentation at ACI’s 28th National Advanced Forum on Bad Faith Claims & Litigation in San Francisco.  The title of the presentation was “The Positions of the Policyholder’s Bar:  How insurers can avoid bad faith claims and tailoring your litigation strategies to the latest wave of first-party and third-party claims.” Some of the highlights included:  

  • the recent trend of bad faith claims handling conduct by insurers in responding to defense cost submissions by independent counsel under Section 2860, including the hiring of outside auditors to justify reduced insurer payments on defense bills;  
  • the state of the “genuine dispute” doctrine in bad faith claims arising out an insurer’s breach of the duty to defend (i.e., Mt. Hawley v. Lopez, 215 Cal. App. 4th 1385 (2013)); and 
  • 2013 case law on whether insurers have an affirmative duty to proactively seek settlement in excess-of-limits exposure cases (i.e., Reid v. Mercury Ins. Co., 220 Cal. App. 4th 262 (2013) and Travelers Indem. Of Conn. v. Arch Specialty Ins. Co., 2013 WL 6198966 (E.D. Cal. Nov. 26, 2013)).  See John Green’s article about Reid posted on this blog

These are evolving areas of law that are likely to produce further disputes between insurers and insureds.  Early insurance coverage advice can help avoid these disputes, or at least position the insured for a more favorable outcome if litigation becomes necessary.  I’ll be writing in more detail about these on this blog over the next couple months.

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.

© Farella Braun + Martel LLP | Attorney Advertising

Written by:


Farella Braun + Martel LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.