Defendant insurer sought review of the decision of the Superior Court of Contra Costa County (California), which found in favor of plaintiff insured in plaintiff’s actions for bad faith and violation of defendant’s statutory duties pursuant to Cal. Ins. Code §§ 790.02 and 790.03.
Overview: litigation lawyer California
Plaintiff insured lost part of his backyard. Defendant insurer denied the claim under the policy provision as not being a covered loss. Plaintiff spent money to prevent further damage to occur. Plaintiff filed an action and alleged bad faith and violation of duties pursuant to Cal. Ins. Code §§ 790.02 and 790.03. Judgment was entered in favor of plaintiff. The court reversed and held that the case on which defendant relied on in his appeal was a judicial decision, not a new rule of law, and thus, it operated retrospectively. The issue on appeal was whether the jury instructions accurately stated the law as subsequently interpreted in the case defendant relied on. The court concluded that the jury’s task was one of identifying the most important cause of the loss and attributing the loss to that cause. However, the trial court’s instructions misstated the law and resulted in a miscarriage of justice because the jury instructions set the jury on the task of identifying all the proximate causes and determining whether any of them was a covered peril. The court remanded because the trial court should have the opportunity to decide the validity of defendant’s claims.
Outcome
The court reversed the decision in favor of plaintiff insured and against defendant insurer because the court misstated the rule of law as subsequently interpreted in another case. Jurors were instructed to identify all proximate causes and determine whether any were covered perils; jurors should have been told to identify the most important cause of the loss and attribute the loss to that cause. The court remanded for further proceedings.