29th Oct 2020
An insurer is often accused in coverage litigation of retaining an expert for “bad faith” reasons. A claimant refers to such a retention as a retention to “rubber stamp the insurer’s decision not to pay benefits”. [Fadeeff v. State Farm (2020) 50 Cal. App. 5th 94, 23 Cal. Rptr. 3d 453, 464] See § E55 EXPERT TESTIMONY [§ E55:19].
An insurer’s “bad faith” retention of an expert can relate to
First party property losses
1. Scope of loss determination.
See § S58 SCOPE OF LOSS; Amerigraphics v. Mercury Cas. (2010) 12 Cal. App. 4th 1538, 1559-1560; Fadeeff v. State Farm (2020) 50 Cal. App. 5th 94, 263 Cal. Rptr. 3d 453, 464 (first party loss to home; insurer allegedly retained experts in bad faith).
2. Claims handling and tactics
See § C32.03 CLAIMS HANDLING AND TACTICS [§ C32.03:5.1 Intentionally dishonest claims adjusting]
a. Bad faith tactics used by insurer
1. Use of expert opinion to deny benefits based upon an incomplete investigation. [Fadeeff v. State Farm (2020) 50 Cal. App. 5th 94, 263 Cal. Rptr. 3d 453, 464 (expert investigation was “limited in scope”). See § I81 INVESTIGATE: DUTY OF INSURER – FIRST PARTY POLICY [§ I81:2 Thorough investigation: defined].
2. Use of expert testimony to contend an absence of bad faith on behalf of insurer based upon the “genuine-issue” doctrine.
An expert’s testimony will not automatically insulate an insurer from a bad faith claim based on a biased investigation. [Fadeeff v. State Farm (2020) 50 Cal. App. 5th 94, 263 Cal. Rptr. 3d 453, 464] See § G11 GENUINE ISSUE DOCTRINE [§ G11:1]; § E55 EXPERT TESTIMONY [§ E55:19]
References in bold are to Mr. Cornblum’s text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, 2020 Edition, published by ThomsonReuters (1-800-344-5008) to order 3-Volume text). This text is also available to search on Westlaw.
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