The following published decisions may be of interest to attorneys practicing insurance law:
CALIFORNIA COURT OF APPEAL
Trial court discovery orders in uninsured-motorist arbitration proceedings are reviewable solely by writ of mandamus. State Farm Mutual Automobile Insurance v. Robinson (2022) __ Cal. App. 5th __.
State Farm’s insured submitted an uninsured motorist claim, which ended up in arbitration. State Farm propounded requests for admission which the insured failed to answer timely. Pursuant to Insurance Code section 11580.2, subdivision (f), which provides that discovery disputes in uninsured motorist proceedings are resolved by the trial court and not the arbitrator, State Farm moved in the trial court to have the requests deemed admitted. The trial court refused to excuse the insured’s failure to timely answer the requests and granted State Farm’s motion. With the admissions in hand, State Farm readily prevailed in the arbitration. The trial court confirmed the arbitration award. The insured then appealed from the judgment, asserting that the trial court erred in granting State Farm’s discovery motion.
The Court of Appeal (First Dist., Div. One) affirmed the judgment. Code of Civil Procedure section 1286.2’s strict limitations on appellate review of arbitration awards apply to uninsured motorist arbitrations under Insurance Code section 11580.2. Arguments that the trial court erred in ruling on discovery matters, and that the arbitrator erred in accepting the trial court’s rulings, are based on asserted legal error and are not reviewable in connection with a challenge to the arbitration award. The only way to obtain appellate review of an erroneous trial court discovery order in uninsured motorist proceedings is to seek writ relief. The court noted that even though writ relief is discretionary, the possibility of such relief provides greater protection for the parties than exists in ordinary arbitration proceedings, in which such errors are entirely unreviewable absent the grounds identified in Code of Civil Procedure section 1286.2.
The Insurance Frauds Prevention Act targets deceptive conduct towards insurers, not by them.
People ex rel. Ellinger v. Magill (2022) __ Cal. App. 5th __.
The plaintiff was injured at work and reported the injury to his supervisor. His employer’s workers’ compensation carrier denied the claim, asserting that the plaintiff’s supervisor said that the plaintiff had never reported the workplace injury. In fact, the supervisor had sent the workers’ compensation carrier the report of the claim. The plaintiff brought this qui tam action asserting that the workers’ compensation carrier and its agents acted fraudulently in violation of Insurance Code section 1871.1, which is part of the Insurance Frauds Prevention Act (IFPA) and provides that any interested person may bring a qui tam action to recover penalties, damages, and other relief for certain deceptive acts directed at insurers. The trial court dismissed the action, reasoning that under existing precedent, the IFPA does not extend to allowing qui tam actions against insurers and their agents for improper claim handling practices.
The Court of Appeal (Fourth Dist., Div. Two) affirmed. Legislative history and existing precedent confirms that the purpose of the IFPA is to prevent fraud against insurers, which in turn harms policyholders. The IFPA is not intended to regulate insurance company conduct and therefore cannot be used as a basis to bring claims against insurers for improper claim handling practices.
This e-Bulletin was prepared by Emily V. Cuatto, Certified Appellate Specialist and Partner of Horvitz & Levy LLP. Ms. Cuatto is a member of the Insurance Law Standing Committee of the Business Law Section of the California Lawyers Association.