Allstate Insurance Company v. Richard Thacher
520 F. App'x 511
9th Cir.2013Background
- Thachers and Trujillo sued Allstate in federal court under diversity jurisdiction.
- District court granted summary judgment to Allstate on breach of contract, bad faith, and punitive-damages counterclaims.
- Jury verdict and district court judgment found in favor of Thachers and Trujillo on underlying claims and arbitration award.
- Allstate cross-appealed the jury verdict related to notice of non-renewal, denial of umbrella coverage, and the arbitration award.
- Thachers and Trujillo counterclaims included breach of contract, bad faith, and punitive damages; Allstate sought declaratory relief.
- Appellate court affirmance of both the jury verdict and the summary-judgment order
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is substantial evidence for the jury on three elements | Thachers and Trujillo contend evidence supports non-renewal notice, Umbrella denial, and arbitration validity | Allstate contends evidence insufficient or precluded | Yes; substantial evidence supports the jury findings |
| Whether Allstate breached its defense/indemnity duties before declaratory relief | Thachers rely on duty to defend/indemnify under Umbrella policy | Allstate reserved rights and filed declaratory action after arbitration | No breach; summary judgment proper |
| Whether bad-faith counterclaim is barred by the genuine-dispute doctrine | Thachers claim bad faith in withholding benefits | There was a legitimate dispute over Umbrella liability | Yes; no bad faith |
| Whether punitive-damages counterclaim was properly dismissed | Thachers seek punitive damages for unreasonable insurer positions | No unreasonable conduct shown as a matter of law | Yes; properly dismissed |
Key Cases Cited
- George v. City of Long Beach, 973 F.2d 706 (9th Cir. 1992) (substantial evidence standard for jury verdicts)
- Century Sur. Co. v. Polisso, 43 Cal.Rptr.3d 468 (Cal. Ct. App. 2006) (genuine dispute doctrine; reasonable dispute bars bad-faith finding)
- Comunale v. Traders & Gen. Ins. Co., 328 P.2d 198 (Cal. 1958) (implied covenant of good faith and fair dealing)
- Chateau Chamberay Homeowners Ass’n. v. Associated Int’l Ins. Co., 90 Cal.App.4th 347 (Cal. App. 4th 2000s) (reasonableness of insurer decisions evaluated at time made)
- Beck v. State Farm Mut. Auto. Ins. Co., 54 Cal.App.3d 347 (Cal. Ct. App. 1976) (punitive-damages standard for insurer behavior)
- Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 F.3d 1132 (9th Cir. 2009) (de novo review of summary-judgment order on claims)