... Regardless of Other Insurers With the Same Duties, California Court Holds.
In Howard v. American National Fire Insurance Co., Download Howard v. American National Fire Insurance Co. (Cal.1st DCA Case No. A123187, Opinion Filed August 11, 2010) PUBLIC ACCESS also published as 2010 WL 316851 (Cal. 1st DCA August 11, 2010)(Westlaw subscription required to access Westlaw), California's First District Court of Appeal has provided a unanimous decision in which the Court's Opinion addresses more issues than Carter has pills, as they say. Here are some of them.
1. Mediation Communications in Evidence.
Like so many Courts, this Court pointed to Communications in Evidence from a Mediation without any discussion of whether any party objected to an apparent breach of Mediation Privilege. Further, in this case, the particular Mediation Communications evidenced the apparent Bad Faith settlement conduct of a Defendant Liability Insurance Company. See Howard v. American National Fire Insurance Co., 2010 WL 31526851 at *2.
Mediations and the question of Mediation Privileges in Bad Faith Cases are addressed in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" §§ 8:19 (Third-Party Cases) and 12:19 (First-Party Cases) (Shepard's/McGraw-Hill First Edition; West Publishing Company Second Edition and 2010 Supplement).
2. Duty to Defend Regardless of Other Insurers.
In cases where the Defendant Insureds are exposed to liability beyond their Liability Policy Limits, this Court concluded that California Insurance Law clearly allows such Insureds to pursue causes of action for Damages "'apart from defense costs'" for the Liability Insurers' Wrongful Refusals to Defend. This is true even where such Insureds are defended in the underlying case by other insurers. Id. at *12.
Consequential Damages issues in Wrongful Refusal to Defend Cases and in all other kinds of "insurer Bad Faith" Case are analyzed in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 13:9 (Shepard's/McGraw-Hill First Edition; West Publishing Co. Second Edition and 2010 Supplement).
3. Duty of Good Faith and Fair Dealing Also Notwithstanding The Presence of Other Liability Insurers, Each of Which Has The Same Good Faith Duty.
Duties of Good Faith and Fair Dealing are most often addressed by the Courts in the context of an alleged Wrongful Failure to Settle. It becomes confusing, sometimes, when there are many Liability Insurance Companies, each with its own positions on its Insurance Coverages, and often each with its own evaluations of their respective Insureds' exposure to liability and to damages. Even though in some cases there will be many Liability Insurance Companies which all provide Coverage of one kind or another to the same Insured, the Court in this case held that under California Law, "when one of multiple insurance policies provides coverage, each insurer's obligation is to cover the full extent of the insured's liability up to policy limits." Id. at *17.
Particular situations involving Primary and Excess Liability Insurance Companies with a common Insured, and how those situations affect their respective Good Faith Duties, are discussed in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 5:22, "Excess Carrier's Defenses: Bad Faith of the Primary Insurer" (Shepard's/McGraw-Hill First Edition; West Publishing Co. Second Edition and 2010 Supplement).
To be continued.........
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