Procedural Posture

Defendant insurer appealed a judgment from the Superior Court of Los Angeles County (California), which, in a jury trial, found in favor of plaintiff insured in a bad faith action arising from denial of a vehicle theft claim.

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The insured reported the theft of his vehicle. When recovered, the vehicle had been burned and was a total loss. Investigators for the insurer found the circumstances of the loss suspicious. The insurer denied the claim nine months after it received the insured’s affidavit of theft. The trial court instructed the jury on the issue of reasonableness pursuant to CACI 2331, 2332, with the agreement of both parties. The trial court refused to give the insurer’s proposed instructions on the genuine dispute doctrine, finding that the genuine dispute doctrine was subsumed within the concept of reasonable and unreasonable as set forth in CACI 2331. The court found no error, concluding that the trial court properly instructed the jury on the issue of reasonableness and that no further instruction in this regard was necessary. The genuine dispute rule, which provided that an insurer did not act in bad faith by advancing its side of a genuine dispute as to its liability, did not relieve an insurer from its obligation to thoroughly and fairly investigate an insured’s claim. A genuine dispute existed only where the insurer’s position was maintained in good faith and on reasonable grounds.


The court affirmed the trial court’s judgment.