November 2022 Update
The current update includes changes throughout this publication that reflect recent developments in case law, legislation, court rules, and jury instructions. Summarized below are some of the more important developments included in this update since publication of the 2021 update.
Scope of Duty in Tort. In Vulk v State Farm Gen. Ins. Co. (2021) 69 CA5th 243, the court held that an insurer was entitled to summary judgment on a negligence claim because the operative complaint did not allege any facts showing that the insurer had a special duty of care to provide replacement cost insurance coverage for a home. See §1.33.
Declaratory Relief—Procedure. In Berg v Pulte Home Corp. (2021) 67 CA5th 277, the court held that there is no right to a jury trial in civil actions that are equitable in nature. Only when issues of law are involved does the right to a jury trial attach. See §1.46.
Willfulness Versus Intent to Injure. Insurance Code §533 reflects a fundamental public policy of denying coverage for willful wrongs and discouraging willful torts. Certain Underwriters at Lloyd’s London v ConAgra Grocery Prods. Co. (2022) 77 CA5th 729. See §5.17.
Conflict of Interest. In Simonyan v Nationwide Ins. Co. of Am. (2022) 78 CA5th 889, the court rejected the insured’s claim that retention of panel counsel without any reservation of rights created a conflict of interest because the insured contended he was not responsible for an accident; the insurer had concluded to the contrary and raised his premium; and panel counsel’s representation might be less effective if it adopted the insurer’s position in defending the case. See §9.6.
Independent Counsel. In Simonyan v Nationwide Ins. Co. of Am. (2022) 78 CA5th 889, the court cited James 3 Corp. v Truck Ins. Exch. (2001) 91 CA4th 1093 and held that a speculative, future, potential conflict of interest would not trigger the right to independent counsel under CC §2860. See §10.27.
Types of Bad Faith Actions. Where a special verdict form in an underlying motor vehicle accident case did not ask for a finding on the reasonableness of the insurer’s conduct in failing to accept a settlement offer for the policy limits, and the jury made no finding that the insurer acted unreasonably in any respect, the special verdict was insufficient to support a bad faith judgment against the insurer. Pinto v Farmers Ins. Exch. (2021) 61 CA5th 676. See §§10.11, 10.30.
Compensatory Damages. In Sheen v Wells Fargo Bank, NA (2022) 12 C5th 905, the California Supreme Court analyzed how tort recovery has been allowed in some cases involving insurance policies and contracts, and this is because insurance cases were a major departure from traditional principles of contract law. See §10.32.
Motor Vehicle Leasing and Renting in the Course of Business. An online platform that allowed car owners to rent their cars to other users was not a “rental car company” because it did not own, lease, or rent a fleet of cars for customers to rent and thus was not in the business of renting vehicles to the public. Turo Inc. v Superior Court (2022) 80 CA5th 517. See §11.8.