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Chateau Chamberay Homeowners Assn. v. Associated Internat. Ins. Co.

Court of Appeal of California, Second Appellate District, Division Three

June 29, 2001, Decided

No. B137320.

Opinion

 [*339]  [**778]   CROSKEY, J. 

This appeal tests the validity of an order of the trial court summarily adjudicating, in favor of the insurer, the claim that the insurer was liable for its bad faith adjustment of the insured's claim of loss. Following the Northridge earthquake on January 17, 1994, the appellant, Chateau Chamberay Homeowners Association (HOA), submitted a claim of loss to its insurer, the respondent, Associated International Insurance Company (AIIC). When it was finally calculated, HOA's claim totaled $ 5,771,522.

During the investigation process, AIIC paid to HOA several interim payments, which [***2]  together represented the total amount AIIC believed was due; that amount totaled $ 1,949,161. A subsequent stipulated arbitration determined that AIIC had underpaid the total amount of HOA's covered loss and ordered that AIIC pay an additional $ 610,753, plus interest; thus, HOA's total covered loss was determined to be $ 2,559,914, or approximately 45 percent of its claimed total loss.

While the amount of HOA's covered loss was resolved by arbitration, its claim for bad faith conduct on the part of AIIC went forward in the trial court. Concluding from the evidence presented that AIIC and HOA had a "genuine dispute" as to what was covered under AIIC's policy and the proper amount of HOA's loss, the trial court determined that AIIC could not be found liable in bad faith for its adjustment activities and the resulting delayed payment of HOA's claim. Based on that determination, it granted AIIC's motion for the summary adjudication of HOA's cause of action for bad faith. As all other issues have now been resolved and a final judgment entered, that ruling may now be reviewed.

The record before us reflects that AIIC and HOA did have a genuine dispute as to (1) just what portion [***3]  of HOA's claimed loss was actually covered under the policy and (2) the proper amount of HOA's covered loss.  [*340]  In addition, we can find no factual support for the conclusion that AIIC acted unreasonably or without proper cause in its adjustment of HOA's claim. We thus are able to determine, as a matter of law, that AIIC cannot be found liable in bad faith. As a result, we conclude that the trial court did not err in summarily adjudicating  [**779]  HOA's bad faith claim. We therefore will affirm the judgment.

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90 Cal. App. 4th 335 *; 108 Cal. Rptr. 2d 776 **; 2001 Cal. App. LEXIS 507 ***; 2001 Cal. Daily Op. Service 5573; 2001 Daily Journal DAR 6809

CHATEAU CHAMBERAY HOMEOWNERS ASSOCIATION, Plaintiff and Appellant, v. ASSOCIATED INTERNATIONAL INSURANCE COMPANY, Defendant and Respondent.

Subsequent History:  [***1]  As Modified on Denial of Rehearing July 30, 2001, Reported at: 2001 Cal. App. LEXIS 587. There is no change in the judgment.

Prior History: APPEAL from a judgment of the Superior Court of Los Angeles County. Super. Ct. No. SC043443. Hugh C. Gardner, III, Judge.

Disposition: Affirmed.

CORE TERMS

insurer, repair, bad faith, earthquake, estimate, genuine dispute, arbitration, adjuster, coverage, triable, covered loss, trial court, parties, matter of law, good faith, declaration, bad faith claim, cause of action, proper cause, installation, inspections, preexisting, percent, individual unit, policy benefits, underlying fact, circumstances, vibration, covenant, handling

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Materiality of Facts, General Overview, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Supporting Materials, Opposing Materials, Burdens of Proof, Evidence, Burdens of Production, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Contracts Law, Contract Interpretation, Good Faith & Fair Dealing, Defenses, Ambiguities & Mistakes, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, Payments, Breach, Bad Faith & Extracontractual Liability, Torts, Business Torts, Bad Faith Breach of Contract, Payment Delays & Denials, Claim, Contract & Practice Issues, Fiduciary Responsibilities, Industry Practices, Unfair Business Practices, Claims Investigations & Practices, Disclosure Obligations by Insureds, Fraudulent Intent, Trials, Jury Trials, Province of Court & Jury