I wrote a previous article this week about a helpful opinion from a California DCA concerning California's "genuine dispute" or "genuine issue" rule: Zubillaga v. Allstate Indem. Co., 12 Cal. App. 5th 1017, 219 Cal. Rptr. 3d 620 (Cal. 4th DCA, Div. 3, 2017). The opinion reads like a law review article on the topic.
The genuine dispute rule applies in bad faith cases. It depends on good faith. "'A genuine dispute exists only where the insurer's position is maintained in good faith and on reasonable grounds.'" Zubillaga v. Allstate Indem. Co., 12 Cal. App. 5th 1017, 1027, 219 Cal. Rptr. 3d 620, 628 (Cal. 4th DCA, Div. 3, 2017) (citation omitted; emphasis in original).
Perfection is not required from the insurance carrier, even in California. If the dispute is genuine, it does not seem to matter if the insurance company was wrong in disputing coverage or liability. The essence of the determination required by the rule in whether "'a reasonable and legitimate dispute actually existed[.]'" Zubillaga v. Allstate Indem. Co., 12 Cal. App. 5th 1017, 1028, 219 Cal. Rptr. 3d 620, 628 (Cal. 4th DCA, Div. 3, 2017) (citation omitted).
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