Cases

The plaintiff, a designer and merchant of bridal gowns and accessories, sued its insurer, GMSR’s client, for breach of contract and insurance bad faith, after the insurer refused to pay a substantial water-damage claim resulting from a broken fire sprinkler. The insurer obtained summary adjudication dismissing the bad faith claim, but the insured prevailed in a bench trial of its breach of contract claim for the insurance proceeds.

In the insured’s appeal from the dismissal of the bad faith claim, the Court of Appeal confirmed the trial court’s determination that a reasonable insurer could genuinely dispute the claim’s validity under the undisputed facts. The insurer therefore was entitled to deny the claim without incurring potential liability for insurance bad faith, even though the claim itself was later held to be valid.

Case Briefs

• California Court of Appeal Opinion - View Document