{"id":1222,"date":"2021-10-25T03:50:34","date_gmt":"2021-10-25T03:50:34","guid":{"rendered":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/?page_id=1222"},"modified":"2022-05-05T16:38:46","modified_gmt":"2022-05-05T16:38:46","slug":"caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements","status":"publish","type":"page","link":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/","title":{"rendered":"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kum8du43-b1f6c5b7f7d47ec85acc9e54c07607e3\">\n#top .av-special-heading.av-kum8du43-b1f6c5b7f7d47ec85acc9e54c07607e3{\npadding-bottom:10px;\n}\nbody .av-special-heading.av-kum8du43-b1f6c5b7f7d47ec85acc9e54c07607e3 .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n.av-special-heading.av-kum8du43-b1f6c5b7f7d47ec85acc9e54c07607e3 .av-subheading{\nfont-size:15px;\n}\n<\/style>\n<div  class='av-special-heading av-kum8du43-b1f6c5b7f7d47ec85acc9e54c07607e3 av-special-heading-h1 blockquote modern-quote  avia-builder-el-0  el_before_av_hr  avia-builder-el-first '><h1 class='av-special-heading-tag '  itemprop=\"headline\"  >CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements<\/h1><div class='av-subheading av-subheading_below'><p>California Civil Jury Instructions CACI<\/p>\n<\/div><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div>\n<div  class='hr av-av_hr-91d7ccd583a503147498e120fee2ff9b hr-default  avia-builder-el-1  el_after_av_heading  el_before_avia_sc_search '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7\">\n#top .avia_search_element.av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7 .av_searchform_wrapper{\nborder-radius:0px 0px 0px 0px;\nborder-color:#edae44;\nbackground-color:#edae44;\n}\n#top .avia_search_element.av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7 #s.av-input-field{\nborder-radius:0px 0px 0px 0px;\n}\n#top .avia_search_element.av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7 #searchsubmit{\nborder-radius:0px 0px 0px 0px;\n}\n#top .avia_search_element.av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7 .av_searchsubmit_wrapper{\nborder-radius:0px 0px 0px 0px;\n}\n.ajax_search_response.av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7{\npadding:0px 0px 0px 0px;\nmargin:0px 0px 0px 0px;\n}\n<\/style>\n<div  class='avia_search_element av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7  avia-builder-el-2  el_after_av_hr  el_before_av_textblock '><search><form action='https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/' id='searchform_element' method='get' class='' data-element_id='av-avia_sc_search-f7f83518637509acfac1c9900b84c1e7' ><div class='av_searchform_wrapper'><input type='search' value='' id='s' name='s' placeholder='Search CACI' aria-label='Search CACI' class='av-input-field ' required \/><div class='av_searchsubmit_wrapper '><input type='submit' value='Find' id='searchsubmit' class='button ' title='View results on search page' aria-label='View results on search page' \/><\/div><input type='hidden' name='numberposts' value='8' \/><input type='hidden' name='post_type' value='page' \/><input type='hidden' name='results_hide_fields' value='post_titles,meta,image' \/><\/div><\/form><\/search><\/div>\n<section  class='av_textblock_section av-av_textblock-e878f05c31dff72941bf1e49a00d9ff5 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><ul>\n<li><a href=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/\">CACI Jury Instructions Index<\/a><\/li>\n<li><a href=\"https:\/\/caci-fillable-forms.crowdsourcelawyers.com\/\">App: CACI Jury Instructions Fillable Forms Word Format<\/a><\/li>\n<\/ul>\n<\/div><\/section>\n<div  class='hr av-av_hr-91d7ccd583a503147498e120fee2ff9b hr-default  avia-builder-el-4  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kum8fa70-659db7ad2241695f2ff388fa430e96eb\">\n#top .av_textblock_section.av-kum8fa70-659db7ad2241695f2ff388fa430e96eb .avia_textblock{\nfont-size:20px;\n}\n<\/style>\n<section  class='av_textblock_section av-kum8fa70-659db7ad2241695f2ff388fa430e96eb '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><h2 class=\"SS_Banner\">2336\u00a0Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements<\/h2>\n<hr \/>\n<p><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">[<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] claims [he\/she\/<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">nonbinary pronoun<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">\/it] was harmed by [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">]\u2019s breach of the obligation of good faith and fair dealing because [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] failed to defend [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] in a lawsuit that was brought against [him\/her\/<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">nonbinary pronoun<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">\/it]. To establish this claim, [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] must prove all of the following:<\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">1.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] was insured under an insurance policy with [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">];<\/span><\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">2.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That a lawsuit was brought against [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">];<\/span><\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">3.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] gave [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] timely notice that [he\/she\/<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">nonbinary pronoun<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">\/it] had been sued;<\/span><\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">4.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">], unreasonably, that is, without proper cause, failed to defend [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] against the lawsuit;<\/span><\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">5.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">] was harmed; and<\/span><\/span><\/p>\n<p><span class=\"SS_ListLabel\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">6.<\/span><\/span><span class=\"SS_ListItemContent\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">That [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of defendant<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">]\u2019s conduct was a substantial factor in causing [<\/span><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">name of plaintiff<\/span><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\">]\u2019s harm. <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/span><\/p>\n<hr \/>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\"><\/h2>\n<div id=\"TRNotes_n_1\">\n<p><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">New October 2004; Revised December 2007, December 2014, December 2015 <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<p><a href=\"https:\/\/crowdsourcelawyers.com\/\">Crowdsource Lawyers<\/a><\/p>\n<p><a href=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\">https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci<\/a><span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\"><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\">Directions for Use<\/h2>\n<div id=\"TRNotes_n_2\">\n<p>The instructions in this series assume that the plaintiff is an insured and the defendant is the insurer. The party designations may be changed if appropriate to the facts of the case.<\/p>\n<p>The court will decide the issue of whether the claim was potentially covered by the policy. (See\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">California Shoppers, Inc. v. Royal Globe Ins. Co.<\/span>\u00a0(1985) 175 Cal.App.3d 1, 52 [221 Cal.Rptr. 171].) If coverage depends on an unresolved dispute over a factual question, the very existence of that dispute establishes a possibility of coverage and thus a duty to defend. (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">North Counties Engineering, Inc. v. State Farm General Ins. Co.<\/span>\u00a0(2014) 224 Cal.App.4th 902, 922 [169 Cal.Rptr.3d 726].) Therefore, the jury does not resolve factual disputes that determine coverage.<\/p>\n<p>For instructions regarding general breach of contract issues, refer to the Contracts series (CACI No.\u2002300\u00a0et seq.). <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<div class=\"SS_Note\">\n<h2 class=\"SS_HideShowSection SS_Expandable\">Sources and Authority<\/h2>\n<div id=\"TRNotes_n_3\">\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cA breach of the duty to defend in itself constitutes only a breach of contract, but it may also violate the covenant of good faith and fair dealing where it involves unreasonable conduct or an action taken without proper cause. On the other hand, \u2018[i]f the insurer\u2019s refusal to defend is reasonable, no liability will result.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Shade Foods, Inc. v. Innovative Products Sales &amp; Marketing, Inc.<\/span>\u00a078 Cal.App.4th 847, 881 [93 Cal.Rptr.2d 364], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cTo prevail in an action seeking declaratory relief on the question of the duty to defend, \u2018the insured must prove the existence of a\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">potential for coverage<\/span>, while the insurer must establish\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">the absence of any such potential<\/span>. In other words, the insured need only show that the underlying claim\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">may<\/span>\u00a0fall within policy coverage; the insurer must prove it\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">cannot<\/span>.\u2019 The duty to defend exists if the insurer \u2018becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Delgado v. Interinsurance Exchange of Automobile Club of Southern California<\/span>\u00a0(2009) 47 Cal.4th 302, 308 [97 Cal.Rptr.3d 298, 211 P.3d 1083], original italics, internal citation omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c\u2009\u2018[A]n insurer has a duty to defend an insured if it becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement.\u2009\u2026 This duty \u2026 is separate from and broader than the insurer\u2019s duty to indemnify.\u2009\u2026\u2019 \u2018\u2009\u201c[F]or an insurer, the existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts known by the insurer at the inception of a third party lawsuit.\u2009\u2026 Hence, the duty \u2018may exist even where coverage is in doubt and ultimately does not develop.\u2019 \u2026\u201d \u2026\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">State Farm Fire &amp; Casualty Co. v. Superior Court<\/span>\u00a0(2008) 164 Cal.App.4th 317, 323 [78 Cal.Rptr.3d 828], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cIf any facts stated or fairly inferable in the complaint, or otherwise known or discovered by the insurer, suggest a claim potentially covered by the policy, the insurer\u2019s duty to defend arises and is not extinguished until the insurer negates all facts suggesting potential coverage. On the other hand, if, as a matter of law, neither the complaint nor the known extrinsic facts indicate any basis for potential coverage, the duty to defend does not arise in the first instance.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">GGIS Ins. Services, Inc. v. Superior Court<\/span>\u00a0(2008) 168 Cal.App.4th 1493, 1506 [86 Cal.Rptr.3d 515].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c\u2009\u2018The proper focus is on the facts alleged in the complaint, rather than the alleged theories for recovery.\u2009\u2026 \u201cThe ultimate question is whether the facts alleged \u2018fairly apprise\u2019 the insurer that the suit is upon a covered claim.\u201d\u2009\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Albert v. Truck Ins. Exchange<\/span>\u00a0(2018) 23 Cal. App. 5th 367, 378 [232 Cal.Rptr.3d 774].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cThe duty to defend was not a question of fact for the jury; the trial court was compelled to determine as a matter of law that [indemnitee]\u2019s claim was embraced by the indemnity agreement.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Centex Homes v. R-Help Construction Co., Inc<\/span>. (2019) 32 Cal.App.5th 1230, 1236 [244 Cal.Rptr.3d 574].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cA duty to defend can be extinguished only prospectively and not retrospectively.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Navigators Specialty Ins. Co. v. Moorefield Construction, Inc.<\/span>\u00a0(2016) 6 Cal.App.5th 1258, 1284 [212 Cal.Rptr.3d 231].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[F]acts known to the insurer and extrinsic to the third party complaint can generate a duty to defend, even though the face of the complaint does not reflect a potential for liability under the policy. [Citation.] This is so because current pleading rules liberally allow amendment; the third party plaintiff cannot be the arbiter of coverage.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Tidwell Enterprises, Inc. v. Financial Pacific Ins. Co., Inc.<\/span>\u00a0(2016) 6 Cal.App.5th 100, 106 [210 Cal.Rptr.3d 634].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cAn insurer does not have a continuing duty to investigate the potential for coverage if it has made an informed decision on coverage at the time of tender. However, where the information available at the time of tender shows no coverage, but information available later shows otherwise, a duty to defend may then arise.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">American States Ins. Co. v. Progressive Casualty Ins. Co.<\/span>\u00a0(2009) 180 Cal.App.4th 18, 26 [102 Cal.Rptr.3d 591], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cThe duty does not depend on the labels given to the causes of action in the underlying claims against the insured; \u2018instead it rests on whether the\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">alleged facts or known extrinsic facts<\/span>\u00a0reveal a\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">possibility<\/span>\u00a0that the claim may be covered by the policy.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Travelers Property Casualty Co. of America v. Charlotte Russe Holding, Inc.<\/span>\u00a0(2012) 207 Cal.App.4th 969, 976 [144 Cal.Rptr.3d 12], original italics, disapproved on other grounds in\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Hartford Casualty Ins. Co. v. Swift Distribution, Inc.<\/span>\u00a0(2014) 59 Cal.4th 277, 295 [172 Cal.Rptr.3d 653, 326 P.3d 253].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cThe obligation of the insurer to defend is of vital importance to the insured. \u2018In purchasing his insurance the insured would reasonably expect that he would stand a better chance of vindication if supported by the resources and expertise of his insurer than if compelled to handle and finance the presentation of his case. He would, moreover, expect to be able to avoid the time, uncertainty and capital outlay in finding and retaining an attorney of his own.\u2019 \u2018The insured\u2019s desire to secure the right to call on the insurer\u2019s superior resources for the defense of third party claims is, in all likelihood, typically as significant a motive for the purchase of insurance as is the wish to obtain indemnity for possible liability.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Amato v. Mercury Casualty Co. (Amato II)<\/span>\u00a0(1997) 53 Cal.App.4th 825, 831\u2013832 [61 Cal.Rptr.2d 909], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cAn anomalous situation would be created if, on the one hand, an insured can sue for the tort of breach of the implied covenant if the insurer accepts the defense and later refuses a reasonable settlement offer, but, on the other hand, an insured is denied tort recovery if the insurer simply refuses to defend.\u2009\u2026 This dichotomy could have the effect of encouraging an insurer to stonewall the insured at the outset by simply refusing to defend.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Campbell v. Superior Court<\/span>\u00a0(1996) 44 Cal.App.4th 1308, 1319\u20131320 [52 Cal.Rptr.2d 385].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c[T]he mere existence of a legal dispute does not create a potential for coverage: \u2018However, we have made clear that where the third party suit never presented any potential for policy coverage, the duty to defend does not arise in the first instance, and the insurer may properly deny a defense.\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Moreover, the law governing the insurer\u2019s duty to defend need not be settled at the time the insurer makes its decision<\/span>.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Griffin Dewatering Corp. v. Northern Ins. Co. of New York<\/span>\u00a0(2009) 176 Cal.App.4th 172, 209 [97 Cal.Rptr.3d 568], original italics.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cThe trial court erroneously thought that because the case law was \u2018unsettled\u2019 when the insurer first turned down the claim, that unsettledness created a potential for a covered claim.\u2009\u2026 [I]f an insurance company\u2019s denial of coverage is reasonable, as shown by substantial case law in favor of its position, there can be no bad faith even though the insurance company\u2019s position is\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">later<\/span>\u00a0rejected by our state Supreme Court.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Griffin Dewatering Corp., supra<\/span>, 176 Cal.App.4th at p. 179, original italics.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cUnresolved factual disputes impacting insurance coverage do not absolve the insurer of its duty to defend. \u2018If coverage depends on an unresolved dispute over a factual question, the very existence of that dispute would establish a possibility of coverage and thus a duty to defend.\u2019\u2009\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Howard v. American National Fire Insurance Company<\/span>\u00a0(2010) 187 Cal.App.4th 498, 520 [115 Cal.Rptr.3d 42].)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201c\u2009\u2018If the insurer is obliged to take up the defense of its insured, it must do so as soon as possible, both to protect the interests of the insured, and to limit its own exposure to loss.\u2009\u2026 [T]he duty to defend must be assessed at the outset of the case.\u2019 It follows that a belated offer to pay the costs of defense may mitigate damages but will not cure the initial breach of duty.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Shade Foods, Inc., supra,<\/span>\u00a078 Cal.App.4th at p. 881, internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cWhen a complaint states multiple claims, some of which are potentially covered by the insurance policy and some of which are not, it is a mixed action. In these cases, \u2018the insurer has a duty to defend as to the claims that are at least potentially covered, having been paid premiums by the insured therefor, but does not have a duty to defend as to those that are not, not having been paid therefor.\u2019 However, in a \u2018\u2009\u201cmixed\u201d action, the insurer has a duty to defend the action in its entirety.\u2019 Thereafter, the insurance company is entitled to seek reimbursement for the cost of defending the claims that are not potentially covered by the policy.\u201d (<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Gonzalez v. Fire Ins. Exchange<\/span>\u00a0(2015) 234 Cal.App.4th 1220, 1231 [184 Cal.Rptr.3d 394], internal citations omitted.)<\/span><\/p>\n<p><span class=\"SS_ListLabel\">\u2022<\/span><span class=\"SS_ListItemContent\">\u201cNo tender of defense is required if the insurer has already denied coverage of the claim. In such cases, notice of suit and tender of the defense are excused because other insurer has already expressed its unwillingness to undertake the defense.\u201d (Croskey et al., California Practice Guide: Insurance Litigation, Ch. 12D-G,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Insurer\u2019s Reliance on Advice of Counsel<\/span>\u00a0\u00b6\u20097:614 (The Rutter Group).) <br class=\"avia-permanent-lb\" \/><br class=\"avia-permanent-lb\" \/><\/span><\/p>\n<hr \/>\n<\/div>\n<\/div>\n<h2 class=\"SS_Heading\"><span class=\"SS_bf\" data-housestyle=\"EMPHASIS_bf\"><span class=\"SS_ib\" data-housestyle=\"EMPHASIS_ib\">Secondary Sources<\/span><\/span><\/h2>\n<div>2 Witkin, Summary of California Law (11th ed. 2017) Insurance, \u00a7\u00a7\u2009427, 428<\/div>\n<div>Croskey et al., California Practice Guide: Insurance Litigation, Ch. 12B-D,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Third Party Cases\u2014Refusal To Defend Cases<\/span>, \u00b6\u00b6\u200912:598\u201312:650.5 (The Rutter Group)<\/div>\n<div>2 California Liability Insurance Practice: Claims and Litigation (Cont.Ed.Bar) Actions for Failure to Defend, \u00a7\u00a7\u200925.1\u201326.38<\/div>\n<div>2\u00a0California Insurance Law and Practice, Ch. 13,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Claims Handling and the Duty of Good Faith<\/span>, \u00a7\u200913.08\u00a0(Matthew Bender)<\/div>\n<div>6 Levy et al.,\u00a0California Torts, Ch. 82,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Claims and Disputes Under Insurance Policies<\/span>, \u00a7\u00a7\u200982.10\u201382.16\u00a0(Matthew Bender)<\/div>\n<div>26\u00a0California Forms of Pleading and Practice, Ch. 308,\u00a0<span class=\"SS_it\" data-housestyle=\"EMPHASIS_it\">Insurance<\/span>, \u00a7\u2009308.24\u00a0(Matthew Bender)<\/div>\n<div class=\"SS_Note\">\n<div id=\"TRNotes_n_3\"><\/div>\n<\/div>\n<\/div><\/section>\n<div  class='hr av-6vwa3a-a67c9a4cae7ed496ae4cf39855064942 hr-default  avia-builder-el-6  el_after_av_textblock  el_before_av_textblock '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-5c33ue-0f2ce3378143c9514202f389133c1a95\">\n#top .av_textblock_section.av-5c33ue-0f2ce3378143c9514202f389133c1a95 .avia_textblock{\nfont-size:22px;\n}\n<\/style>\n<section  class='av_textblock_section av-5c33ue-0f2ce3378143c9514202f389133c1a95 '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/CreativeWork\" ><div class='avia_textblock'  itemprop=\"text\" ><p><a href=\"https:\/\/crowdsourcelawyers.com\/\">CrowdSourceLawyers.com<\/a><\/p>\n<\/div><\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":3,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1222","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI\" \/>\n<meta property=\"og:url\" content=\"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/\" \/>\n<meta property=\"og:site_name\" content=\"Judicial Council California Civil Jury Instructions CACI\" \/>\n<meta property=\"article:modified_time\" content=\"2022-05-05T16:38:46+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\\\/\",\"url\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\\\/\",\"name\":\"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#website\"},\"datePublished\":\"2021-10-25T03:50:34+00:00\",\"dateModified\":\"2022-05-05T16:38:46+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/home\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#website\",\"url\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/\",\"name\":\"Judicial Council California Civil Jury Instructions CACI\",\"description\":\"California Civil Jury Instructions CACI site\",\"publisher\":{\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#organization\",\"name\":\"CrowdSource Lawyers\",\"url\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2021\\\/09\\\/CrowdSource-Logo.png\",\"contentUrl\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2021\\\/09\\\/CrowdSource-Logo.png\",\"width\":453,\"height\":208,\"caption\":\"CrowdSource Lawyers\"},\"image\":{\"@id\":\"https:\\\/\\\/crowdsourcelawyers.com\\\/judicial-council-california-civil-jury-instructions-caci\\\/#\\\/schema\\\/logo\\\/image\\\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/","og_locale":"en_US","og_type":"article","og_title":"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI","og_url":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/","og_site_name":"Judicial Council California Civil Jury Instructions CACI","article_modified_time":"2022-05-05T16:38:46+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"10 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/","url":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/","name":"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements - Judicial Council California Civil Jury Instructions CACI","isPartOf":{"@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#website"},"datePublished":"2021-10-25T03:50:34+00:00","dateModified":"2022-05-05T16:38:46+00:00","breadcrumb":{"@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/caci-2336-bad-faith-third-party-unreasonable-failure-to-defend-essential-factual-elements\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/home\/"},{"@type":"ListItem","position":2,"name":"CACI 2336 Bad Faith (Third Party)\u2014Unreasonable Failure to Defend\u2014Essential Factual Elements"}]},{"@type":"WebSite","@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#website","url":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/","name":"Judicial Council California Civil Jury Instructions CACI","description":"California Civil Jury Instructions CACI site","publisher":{"@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#organization","name":"CrowdSource Lawyers","url":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#\/schema\/logo\/image\/","url":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-content\/uploads\/sites\/2\/2021\/09\/CrowdSource-Logo.png","contentUrl":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-content\/uploads\/sites\/2\/2021\/09\/CrowdSource-Logo.png","width":453,"height":208,"caption":"CrowdSource Lawyers"},"image":{"@id":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/pages\/1222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/comments?post=1222"}],"version-history":[{"count":2,"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/pages\/1222\/revisions"}],"predecessor-version":[{"id":3710,"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/pages\/1222\/revisions\/3710"}],"wp:attachment":[{"href":"https:\/\/crowdsourcelawyers.com\/judicial-council-california-civil-jury-instructions-caci\/wp-json\/wp\/v2\/media?parent=1222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}