CACI 2337 Factors to Consider in Evaluating Insurer’s Conduct

California Civil Jury Instructions CACI

2337 Factors to Consider in Evaluating Insurer’s Conduct

In determining whether [name of defendant] acted unreasonably, that is, without proper cause, you may consider whether the defendant did any of the following:

[(a) Misrepresented to [name of plaintiff] relevant facts or insurance policy provisions relating to any coverage at issue.]

[(b) Failed to acknowledge and act reasonably promptly after receiving communications about [name of plaintiff]’s claim arising under the insurance policy.]

[(c) Failed to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under its insurance policies.]

[(d) Failed to accept or deny coverage of claims within a reasonable time after [name of plaintiff] completed and submitted proof-of-loss requirements.]

[(e) Did not attempt in good faith to reach a prompt, fair, and equitable settlement of [name of plaintiff]’s claim after liability had become reasonably clear.]

[(f) Required [name of plaintiff] to file a lawsuit to recover amounts due under the policy by offering substantially less than the amount that [he/she/nonbinary pronoun/it] ultimately recovered in the lawsuit, even though [name of plaintiff] had made a claim for an amount reasonably close to the amount ultimately recovered.]

[(g) Attempted to settle [name of plaintiff]’s claim for less than the amount to which a reasonable person would have believed [name of plaintiff] was entitled by referring to written or printed advertising material accompanying or made part of the application.]

[(h) Attempted to settle the claim on the basis of an application that was altered without notice to, or knowledge or consent of, [name of plaintiff], [his/her/nonbinary pronoun/its] representative, agent, or broker.]

[(i) Failed, after payment of a claim, to inform [name of plaintiff] at [his/her/nonbinary pronoun/its] request, of the coverage under which payment was made.]

[(j) Informed [name of plaintiff] of its practice of appealing from arbitration awards in favor of insureds or claimants for the purpose of forcing them to accept settlements or compromises less than the amount awarded in arbitration.]

[(k) Delayed the investigation or payment of the claim by requiring [name of plaintiff], [or [his/her/nonbinary pronoun] physician], to submit a preliminary claim report, and then also required the submission of formal proof-of-loss forms, both of which contained substantially the same information.]

[(l) Failed to settle a claim against [name of plaintiff] promptly once [his/her/nonbinary pronoun/its] liability had become apparent, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.]

[(m) Failed to promptly provide a reasonable explanation of its reasons for denying the claim or offering a compromise settlement, based on the provisions of the insurance policy in relation to the facts or applicable law.]

[(n) Directly advised [name of plaintiff] not to hire an attorney.]

[(o) Misled [name of plaintiff] as to the applicable statute of limitations, that is, the date by which an action against [name of defendant] on the claim had to be filed.]

[(p) Delayed the payment or provision of hospital, medical, or surgical benefits for services provided with respect to acquired immune deficiency syndrome (AIDS) or AIDS-related complex for more than 60 days after it had received [name of plaintiff]’s claim for those benefits, doing so in order to investigate whether [name of plaintiff] had the condition before obtaining the insurance coverage. However, the 60-day period does not include any time during which [name of defendant] was waiting for a response for relevant medical information from a healthcare provider.]

The presence or absence of any of these factors alone is not enough to determine whether [name of defendant]’s conduct was or was not unreasonable, that is, without proper cause. You must consider [name of defendant]’s conduct as a whole in making this determination.

Directions for Use

Although there is no private cause of action under Insurance Code section 790.03(h) (see Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 304–305 [250 Cal.Rptr. 116, 758 P.2d 58]), this instruction may be given in an insurance bad-faith action to assist the jury in determining whether the insurer’s conduct was unreasonable or without proper cause. (See Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1078 [56 Cal.Rptr.3d 312], internal citations omitted.)

Include only the factors that are relevant to the case.

Sources and Authority

Bad-Faith Insurance Practices. Insurance Code section 790.03.

“[Plaintiff] was not seeking to recover on a claim based on a violation of Insurance Code section 790.03, subdivision (h). Rather, her claim was based on a claim of common law bad faith arising from [defendant]’s breach of the implied covenant of good faith and fair dealing which she is entitled to pursue. [Plaintiff]’s reliance upon the [expert’s] declaration was for the purpose of providing evidence supporting her contention that [defendant] had breached the implied covenant by its actions. This is a proper use of evidence of an insurer’s violations of the statute and the corresponding regulations.” (Jordan, supra, 148 Cal.App.4th at p. 1078, original italics, internal citations omitted.)

Secondary Sources

2 Witkin, Summary of California Law (11th ed. 2017) Insurance §§ 360, 361, 365, 461
Croskey et al., California Practice Guide: Insurance Litigation, Ch. 14-A, Statutory and Administrative Regulation—The California Regulator, ¶ 14:109 et seq. (The Rutter Group)
1 California Liability Insurance Practice: Claims and Litigation, Ch. 24, General Principles of Contract and Bad Faith (Cont.Ed.Bar) § 24.30 et seq.
26 California Forms of Pleading and Practice, Ch. 308, Insurance, § 308.25 (Matthew Bender)
1 Rushing et al., Matthew Bender Practice Guide: California Unfair Competition and Business Torts, Ch. 2, Unfair Competition, 2.11 (Matthew Bender)