PART ONE.
In a helpful opinion, a California District Court of Appeal laid out the origins and described the recent extensions of California's "genuine dispute" or "genuine issue" rule:
As noted, an insurer's denial of or delay in paying benefits gives rise to tort damages only if the insured shows the denial or delay was unreasonable. “[A]n insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with its insured as to the existence of coverage liability or the amount of the insured's coverage claim is not liable in bad faith even though it might be liable for breach of contract.” (Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co.(2001) 90 Cal.App.4th 335, 347, 108 Cal.Rptr.2d 776 (Chateau Chamberay ). [Subscription required to access this hyperlink.] “This ‘genuine dispute’ or ‘genuine issue’ rule was originally invoked in cases involving disputes over policy interpretation, but in recent years courts have applied it to factual disputes as well. [Citations.]” (Wilson, supra, 42 Cal.4th at p. 723, 68 Cal.Rptr.3d 746, 171 P.3d 1082.)
Zubillaga v. Allstate Indem. Co., 12 Cal. App. 5th 1017, 1027, 219 Cal. Rptr. 3d 620, 628 (Cal. 4th DCA, Div. 3, 2017) (emphasis added).
Part Two follows. To be continued ....
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