CACI No. 2337. Factors to Consider in Evaluating Insurer’s Conduct

Judicial Council of California Civil Jury Instructions (2020 edition)

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2337.Factors to Consider in Evaluating Insurer’s Conduct
In determining whether [name of defendant] acted unreasonably, that is,
without proper cause, you may consider whether the defendant did any
of the following:
[(a) Misrepresented to [name of plaintiff] relevant facts or
insurance policy provisions relating to any coverage at issue.]
[(b) Failed to acknowledge and act reasonably promptly after
receiving communications about [name of plaintiff]’s claim arising
under the insurance policy.]
[(c) Failed to adopt and implement reasonable standards for the
prompt investigation and processing of claims arising under its
insurance policies.]
[(d) Failed to accept or deny coverage of claims within a
reasonable time after [name of plaintiff] completed and submitted
proof-of-loss requirements.]
[(e) Did not attempt in good faith to reach a prompt, fair, and
equitable settlement of [name of plaintiff]’s claim after liability
had become reasonably clear.]
[(f) Required [name of plaintiff] to file a lawsuit to recover
amounts due under the policy by offering substantially less than
the amount that [he/she/nonbinary pronoun/it] ultimately recovered
in the lawsuit, even though [name of plaintiff] had made a claim
for an amount reasonably close to the amount ultimately
recovered.]
[(g) Attempted to settle [name of plaintiff]’s claim for less than the
amount to which a reasonable person would have believed [name
of plaintiff] was entitled by referring to written or printed
advertising material accompanying or made part of the
application.]
[(h) Attempted to settle the claim on the basis of an application
that was altered without notice to, or knowledge or consent of,
[name of plaintiff], [his/her/nonbinary pronoun/its] representative,
agent, or broker.]
[(i) Failed, after payment of a claim, to inform [name of plaintiff]
at [his/her/nonbinary pronoun/its] request, of the coverage under
which payment was made.]
[(j) Informed [name of plaintiff] of its practice of appealing from
arbitration awards in favor of insureds or claimants for the
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purpose of forcing them to accept settlements or compromises less
than the amount awarded in arbitration.]
[(k) Delayed the investigation or payment of the claim by
requiring [name of plaintiff], [or [his/her/nonbinary pronoun]
physician], to submit a preliminary claim report, and then also
required the submission of formal proof-of-loss forms, both of
which contained substantially the same information.]
[(l) Failed to settle a claim against [name of plaintiff] promptly
once [his/her/nonbinary pronoun/its] liability had become apparent,
under one portion of the insurance policy coverage in order to
influence settlements under other portions of the insurance policy
coverage.]
[(m) Failed to promptly provide a reasonable explanation of its
reasons for denying the claim or offering a compromise
settlement, based on the provisions of the insurance policy in
relation to the facts or applicable law.]
[(n) Directly advised [name of plaintiff] not to hire an attorney.]
[(o) Misled [name of plaintiff] as to the applicable statute of
limitations, that is, the date by which an action against [name of
defendant] on the claim had to be filed.]
[(p) Delayed the payment or provision of hospital, medical, or
surgical benefits for services provided with respect to acquired
immune deficiency syndrome (AIDS) or AIDS-related complex for
more than 60 days after it had received [name of plaintiff]’s claim
for those benefits, doing so in order to investigate whether [name
of plaintiff] had the condition before obtaining the insurance
coverage. However, the 60-day period does not include any time
during which [name of defendant] was waiting for a response for
relevant medical information from a healthcare provider.]
The presence or absence of any of these factors alone is not enough to
determine whether [name of defendant]’s conduct was or was not
unreasonable, that is, without proper cause. You must consider [name of
defendant]’s conduct as a whole in making this determination.
New April 2008; Revised December 2015, May 2020
Directions for Use
Although there is no private cause of action under Insurance Code section 790.03(h)
(see Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287,
304-305 [250 Cal.Rptr. 116, 758 P.2d 58]), this instruction may be given in an
insurance bad-faith action to assist the jury in determining whether the insurer’s
CACI No. 2337 INSURANCE LITIGATION
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conduct was unreasonable or without proper cause. (See Jordan v. Allstate Ins. Co.
(2007) 148 Cal.App.4th 1062, 1078 [56 Cal.Rptr.3d 312], internal citations omitted.)
Include only the factors that are relevant to the case.
Sources and Authority
• Bad-Faith Insurance Practices. Insurance Code section 790.03.
• “[Plaintiff] was not seeking to recover on a claim based on a violation of
Insurance Code section 790.03, subdivision (h). Rather, her claim was based on
a claim of common law bad faith arising from [defendant]’s breach of the
implied covenant of good faith and fair dealing which she is entitled to pursue.
[Plaintiff]’s reliance upon the [expert’s] declaration was for the purpose of
providing evidence supporting her contention that [defendant] had breached the
implied covenant by its actions. This is a proper use of evidence of an insurer’s
violations of the statute and the corresponding regulations.” (Jordan, supra, 148
Cal.App.4th at p. 1078, original italics, internal citations omitted.)
Secondary Sources
2 Witkin, Summary of California Law (11th ed. 2017) Insurance §§ 360, 361, 365,
461
Croskey et al., California Practice Guide: Insurance Litigation, Ch. 14-A, Statutory
and Administrative Regulation - The California Regulator, ¶ 14:109 et seq. (The
Rutter Group)
1 California Liability Insurance Practice: Claims and Litigation, Ch. 24, General
Principles of Contract and Bad Faith (Cont.Ed.Bar) § 24.30 et seq.
26 California Forms of Pleading and Practice, Ch. 308, Insurance, § 308.25
(Matthew Bender)
1 Rushing et al., Matthew Bender Practice Guide: California Unfair Competition
and Business Torts, Ch. 2, Unfair Competition, 2.11 (Matthew Bender)
2338-2349. Reserved for Future Use
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