California Court of Appeals, Fourth District, Third Division
from a judgment of the Superior Court of Orange County No.
30-2013-00695292, John C. Gastelum, Judge. Reversed.
Office of Kyle J. Scott and Kyle J. Scott for Plaintiff and
Sheppard, Mullin, Richter & Hampton, Peter H. Klee, Karin
Dougan Vogel and Joseph E. Foss, for Defendant and
first party insurance bad faith action, the question is
whether the court properly granted summary judgment for the
insurer, based on the “genuine dispute” doctrine.
(See Wilson v. 21st Century Ins. Co. (2007) 42
Cal.4th 713, 723 (Wilson).)
Carmen Zubillaga was injured in an automobile accident. The
other driver was at fault. Her insurer, defendant Allstate
Indemnity Company (Allstate), rejected her demand for $35,
000, the full amount of her remaining underinsured motorist
(UIM) coverage, although it made her a series of offers
increasing to $15, 584 instead.
an arbitrator awarded plaintiff $35, 000, the amount of her
demand, she sued Allstate for breach of the implied covenant
of good faith and fair dealing.
conclude plaintiff demonstrated triable issues of material
fact regarding whether Allstate's decision she did not
need expensive epidural steroid injections, was made without
a good faith investigation and without a reasonable basis for
a genuine dispute. Therefore, summary judgment was improper
and we reverse.
AND PROCEDURAL BACKGROUND
this case comes before us after the trial court granted a
motion for summary judgment, we take the facts from the
record that was before the trial court when it ruled on that
motion. [Citation.] ‘“We review the trial
court's decision de novo, considering all the evidence
set forth in the moving and opposing papers except that to
which objections were made and sustained.”'
[Citation.] We liberally construe the evidence in support of
the party opposing summary judgment and resolve doubts
concerning the evidence in favor of that party.
[Citation.]” (Yanowitz v. L'Oreal USA,
Inc. (2005) 36 Cal.4th 1028, 1037.)
summary judgment record reflects the following undisputed
had an automobile policy with Allstate that included UIM
coverage with a $50, 000 per person limit, and with that
limit to be reduced by any amounts paid by the owner or
operator of the underinsured car. The policy also provided
for voluntary binding arbitration of claim disputes.
was in a serious car accident on March 25, 2011. The other
driver ran a red light and struck her car. The police
determined the other driver was at fault. Plaintiff reported
the accident to Allstate the next day and she retained an
attorney two days later.
to the police report, plaintiff reported pain to her chest
and left arm immediately after the accident. She walked from
her car to a gurney, and was then transported by ambulance to
hospital records state plaintiff complained of pain to her
face and arm, and said the pain “does not
radiate.” She reported no back injury or back pain,
exhibited no spinal tenderness, and had a full range of
motion in her back. She was instructed to follow up with her
own medical doctor.
did not follow up with her own medical doctor. Instead she
saw Leonard Valentine, D.C., a chiropractor. Over the next
four months she saw Valentine 39 times. Plaintiff first told
Valentine she had lower back pain on May 3. She stopped
seeing Dr. Valentine in July 2011. At that time she reported
lower back pain at a level of three on a scale of zero to 10.
22, plaintiff saw Arlen Green, D.O., an osteopath. Green
recommended plaintiff get magnetic resonance imaging (MRI) of
her spine, continue her chiropractic treatment, and take
over-the-counter pain medications as necessary.
later, Green noted, “An MRI of the cervical spine
report was reviewed indicating multiple disc protrusions. An
MRI of the lumbar spine was reviewed indicating a disc
protrusion at the L5-S1 level measuring 3 mm with
neuroforaminal narrowing.” Green further noted,
“Due to the fact that there is significant disc
protrusion seen in both the cervical and lumbar spines, this
patient will most probably require... future medical
treatment. This could include more therapy, medications for
pain, and cervical/lumbar epidural steroid injections.”
November 10, plaintiff's attorney sent Allstate a demand
for $35, 000, based on medical bills totaling $17, 645.44 and
his claim that plaintiff would have lower back pain for the
remaining 52 years of her life expectancy. Plaintiff had
settled with the other driver for $15, 000, so the $35, 000
demand represented the full amount of her remaining UIM
after receiving the November 10 demand letter, Allstate
responded in writing, introduced the claims representative
assigned to handle plaintiff's claim, and described the
process Allstate would follow.
November 29, Allstate wrote to plaintiff's attorney again
and stated “although the claim's value is in
dispute, we are willing to settle the matter for $9,
367.00.” Allstate arrived at that figure by determining
what it felt was the reasonable and customary amount of
plaintiff's medical bills ($14, 367), then adding $10,
000 in general damages, and finally subtracting the $15, 000
settlement from the other driver.
November 30, plaintiff served a formal offer to compromise
(Code Civ. Proc., § 998) for $35, 000. However,
plaintiff's counsel did not otherwise respond to
Allstate's $9, 367 settlement offer for more than four
months, even though Allstate wrote five follow-up letters
requesting such a response.
April 4, 2012, plaintiff's counsel formally rejected
Allstate's $9, 367 offer and again demanded $35, 000. He
provided January and March 2012 evaluations of plaintiff by