The California court's opinion in this recent insurance bad faith case, Verniero v. Allstate Insurance Company, 2nd Appellate Dist., 7th Div. 2013, is interesting in an unusual way.
The appellate court affirmed the trial court's dismissal of the bad faith claim, but only because the policy-holders, or rather, their attorneys, failed to inform the trial court that under precisely the same policy in previous case, involving the same denial of coverage by Allstate for water damage, and involving the same attorneys for Allstate, that the denial was unreasonable gien the ambiguity in the policy!
The policy-holders argued that Allstate's conduct, if in bad faith, is a factual issue for the jury. The court stated: "We can see how a trier of fact could find Allstate's denial of [the] claim unreasonable." The court then stated: in a "case involving the exact same policy language and the same attorneys for Allstate, this court rejected Allstate's position that the language of [the exclusion] and its exception [are] unambiguous."
"Thus, Allstate (and its attorneys)[!] took a position in this case that they knew this court had rejected." In other words, "rather than interpreting the ambiguity in favor of its insureds, Allstate (1) denied the existence of the ambiguity even though a court had already determined the same policy language was ambiguous, (2) argued that the language unambiguously meant something different than Allstate had argued the language unambiguously meant in [in the prior case] and (3) interpreted the ambiguous policy language against its insured to deny coverage."
Under those "somewhat unusual circumstances, a jury could find that Allstate's 'decisions and actions . . . evaluated as of the time that they were made' were unreasonable." Unfortunately, the problem is that the [prior] decision was not properly before the trial court on Allstate's motion for summary judgment." The policy-holders (their attorneys) "have waived these issues."
Because the policy-holders "did not present evidence of the [prior] decision in their opposition to Allstate's motion . . . we cannot find that the trial court erred in granting Allstate's motion for summary adjudication on the second cause of action for breach of the implied covenant of good faith and fair dealing."
words to wise. . .