which are subject to allocation, was based on genuine issues as to coverage, was not unreasonable, and cannot support plaintiff's bad faith cause of action. Accordingly, defendant's summary judgment motion on plaintiff's cause of action for the breach of the covenant of good faith and fair dealing is granted.
B. California Insurance Code § 790.03 (h)
Safeway's second cause of action in its first amended complaint is for violation of the California insurance code. In particular, Safeway claims that National Union has committed wrongful acts in violation of California Insurance Code § 790.03 (h). National Union denies any wrongdoing and moves for summary judgment on this cause of action.
California Insurance Code § 790.03 provides, in relevant part:
The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance.
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(h) Knowingly committing or performing with such frequency as to indicate a general business practice any of the following unfair claims settlement practices:
(1) Misrepresenting to claimants pertinent facts or insurance policy provisions relating to any coverages at issue.
(2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies.
(3) Failing to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies.
(4) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss requirements have been completed and submitted by the insured.
(5) Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.
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(13) Failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement.
Cal. Ins. Code § 790.03 (West Supp. 1992).
Section 790.03 (h) simply codifies the common law tort of "the implied covenant of good faith and fair dealing as applied to insurance." Kelly v. Farmers Ins. Exch., 194 Cal. App. 3d 1, 6 (1987); see also Richardson v. GAB Business Services, Inc., 161 Cal. App. 519, 524 (1984). For the same reasons that Safeway's bad faith claim fails, Safeway's section 790.03 (h) claim must also fail. Safeway relies on the same facts for both its common law and statutory bad faith claims. Because the common law claim fails, so must the statutory claim. Therefore, defendant's summary judgment motion for the section 790.03 (h) cause of action is also granted.
C. Punitive Damages
Defendant's motion to strike plaintiff's prayer for punitive damages is largely academic. As this Court grants summary judgment on plaintiff's second and third causes of action for breach of the covenant of good faith and fair dealing and violation of California Insurance Code section 790.03 (h), respectively, no prayer for punitive damages survives. Plaintiff requested punitive or exemplary damages in connection with only their second and third causes of action. See Paynter Declaration, Aug. 27, 1992, Ex. H, at 14-15 (Plaintiff's First Amended Complaint). Now that those two claims have been resolved by summary judgment, no prayer for punitive damages remains.
For the foregoing reasons, the Court ORDERS as follows:
1. Defendant's motion for summary judgment on plaintiff's third cause of action for breach of the duty of good faith and fair dealing is GRANTED;
2. Defendant's motion for summary judgment on plaintiff's second cause of action for violation of California Insurance Code § 790.03 (h) is GRANTED;
3. Defendant's motion for summary judgment on the issue that defendant is not liable for any punitive damages is GRANTED.
4. A status conference is hereby scheduled for Wednesday, November 25, 1992 at 8:30 a.m.
IT IS SO ORDERED.
DATED: October 22, 1992.
D. Lowell Jensen
United States District Judge