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Moradi-Shalal v. Fireman's Fund Ins. Companies

Moradi-Shalal v. Fireman's Fund Ins. Companies

Supreme Court of California

August 18, 1988

L.A. No. 32222

Opinion

 [*292]  [**59]  [***118]    We initially granted review in this case to attempt to resolve some of the widespread confusion that has arisen regarding the application of our opinion in Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880 [153 Cal.Rptr. 842, 592 P.2d 329]. In Royal Globe, the court held that Insurance Code section 790.03, subdivision (h) (a provision of the Unfair Practices Act, Ins. Code, § 790 et seq.), created a private cause of action against insurers  [**60]  who commit the unfair practices enumerated in that provision. (All further statutory references are to the Insurance Code unless otherwise indicated.) CA(1)(1) (See fn. 1.) Among the issues raised [****3]  and argued by counsel and amici curiae, however, is the more basic question whether we should reconsider our holding in Royal Globe. 1

 In light of certain developments occurring subsequent to Royal Globe which call into question its continued validity, we have found it appropriate to reexamine that decision. As will appear, we have concluded that the Royal Globe court incorrectly evaluated the legislative intent underlying the passage of section 790.03, subdivision (h), and that accordingly [****4]  Royal Globe should be overruled. We also have concluded, however, that our holding in that regard should be prospective only, that is, applicable only to cases filed after the date our opinion herein becomes final. As for cases pending prior to that time, including the present case, the Royal Globe rule shall apply, as construed in part VI of this opinion.

I. The Facts

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46 Cal. 3d 287 *; 758 P.2d 58 **; 250 Cal. Rptr. 116 ***; 1988 Cal. LEXIS 165 ****

PARVANEH MORADI-SHALAL, Plaintiff and Appellant, v. FIREMAN'S FUND INSURANCE COMPANIES, Defendant and Respondent

Subsequent History:  [****1]   Appellant's Petition for a Rehearing was Denied October 13, 1988. Mosk, J., and Broussard, J., were of the Opinion that the Petition should be Granted. The Effective Date of this Order and the Date our Decision in this Cause Becomes Final is October 17, 1988.

Prior History: Superior Court of Los Angeles County, No. C517242, Charles E. Jones, Judge.

Disposition: The judgment of the Court of Appeal is reversed, and the cause remanded for further proceedings consistent with this opinion.

CORE TERMS

insurer, settlement, claimant, insured's liability, third party claimant, cases, unfair, settle, practices, courts, underlying claim, cause of action, damages, unfair practice, civil liability, subdivision, italics, private cause of action, underlying action, general business, frequency, liability of the insured, judicial determination, third party, good faith, model act, provisions, overrule, decisions, lawsuit

Governments, Courts, Judicial Precedent, Legislation, Effect & Operation, Retrospective Operation, Insurance Law, Contract Formation, Liability & Performance Standards, Settlements, General Overview, Civil Procedure, Settlement Agreements