Zubillaga v. Allstate Indemnity Co.

Summary judgment for insurer on bad faith claim is reversed due to a triable issue as to whether insurer’s dispute about the claim amount was genuine since the insurer had not updated its medical expert’s opinion based on new evidence of the extent of the insured’s injuries.  Allstate was not entitled to summary judgment on the insured’s bad faith claim under the genuine dispute doctrine.  The insured submitted a claim for underinsured motorist benefits after an accident in which the other driver was at fault.  Allstate offered only a sum that was significantly lower than the ultimate arbitration award.  Under the genuine dispute doctrine, an insurer cannot be sued for bad faith if it denies or delays benefits due to a genuine dispute as to coverage or amount of insured loss. But the dispute is genuine only if the insurer has thoroughly and fairly investigated, processed and evaluated the insured’s claim.  And while the insured may be able to show a genuine dispute if it relies on the opinions of outside experts, here there was at least a triable issue of fact as to the reasonableness of Allstate’s reliance on an expert’s opinion as to the amount of plaintiff’s damages since the expert rendered his report before new evidence arose concerning very expensive treatments recommended for plaintiff’s lower back injury.  Allstate owed a duty to investigate that new evidence rather than simply rely on the outdated expert’s report.

California Court of Appeal, Fourth District, Division 3 (Thompson, J.); June 19, 2017; 2017 WL 2627997

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