Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-07368/USCOURTS-cand-4_06-cv-07368-6/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

STEVEN JACKSON,

Plaintiff, No. C 06-7368 PJH

v. ORDER GRANTING SUMMARY

JUDGMENT IN PART AND

STATE FARM MUTUAL AUTOMOBILE DENYING SUMMARY JUDGMENT

INSURANCE COMPANY, DOES 1 IN PART

through 100, Inclusive,

Defendants.

_______________________________/

Defendant’s motion for summary judgment or in the alternative, for summary

adjudication, came on for hearing before this court on November 14, 2007. Plaintiff Steven

Jackson (“plaintiff”) appeared through his counsel, Thomas J. LemMon. Defendant, State

Farm Mutual Automobile Insurance Co. (“defendant”), appeared through its counsel,

Stephen M. Hayes. Having read the parties’ papers and carefully considered their

arguments and the relevant legal authority, and good cause appearing, the court hereby

DENIES summary judgment in part and GRANTS summary judgment in part, for the

reasons stated at the hearing, and summarized as follows. 

1. Defendant’s motion for summary judgment is GRANTED with respect to

plaintiff’s first and third causes of action alleging breach of contract, since defendant paid

plaintiff the value of its claim under the terms of the policy and as such, satisfied its

obligation under the policy. See, e.g., Paulson v. State Farm Mut. Auto. Ins. Co., 867 F.

Supp. 911, 917 (C.D. Cal. 1994)(finding no breach of contract in similar circumstances).

2. Defendant’s motion for summary judgment as to plaintiff’s second and fourth

causes of action setting forth bad faith claims, is DENIED. Defendant has submitted

Case 4:06-cv-07368-PJH Document 50 Filed 11/15/07 Page 1 of 3
United States District Court

For the Northern District of California

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persuasive evidence that a reasonable dispute existed as to the value of plaintiff’s claim,

and that it furthermore relied on the advice of competent counsel in taking at least some of

the actions complained of by plaintiff. Nonetheless, the evidence, when viewed as a whole,

indicates that material disputes of fact exist as to whether defendant’s actions in

investigating and processing plaintiff’s claim, and the speed with which defendant did so,

were ultimately reasonable. See, e.g., Carlton v. St. Paul Mercury Ins. Co., 30 Cal. App.

4th 1450, 1456 (1994)(ultimate test of bad faith liability in first party cases is whether the

refusal to pay policy benefits, or alleged delay in paying, was unreasonable). Accordingly,

the evidence, and the strength of plaintiff’s claims, must be evaluated by the trier of fact. 

3. To the extent that defendant argues that application of the California litigation

privilege operates to bar plaintiff’s bad faith claims, and that summary judgment of these

claims is also appropriate on this ground, the court DENIES defendant’s motion. 

Defendant has failed to identify qualifying communications upon which plaintiff’s claims

rest, and to establish grounds for an absolute defense based on such particularized

communications. See, e.g., Kimmel v. Goland, 51 Cal. 3d 202, 212 (1990)(litigation

privilege applies to communications, not conduct); Flores v. Emerich & Fike, 416 F. Supp.

2d 885, 905-06 (E.D. Cal. 2006)(distinguishing conduct from communication in applying

litigation privilege).

4. Finally, defendant’s motion for summary adjudication of plaintiff’s claim for

punitive damages is GRANTED, since plaintiff has failed to introduce any clear and

convincing evidence of the type of conduct by defendant that would rise to the level of

despicable or egregious conduct sufficient to support a finding of punitive damages. See,

e.g., Tomaselli v. Transamerica Ins. Co., 25 Cal. App. 4th 1269, 1287 (1994)(despicable

conduct is generally considered to be “conduct which is so vile, base, contemptible,

miserable, wretched or loathsome that it would be looked down upon and despised by

ordinary decent people.”); Mock v. Michigan Millers Mutual Ins. Co., 4 Cal. App. 4th 306,

329 (1992)(“'a consistent and unremedied pattern of egregious insurer practices' [is

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For the Northern District of California

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required] in order for the insurer's 'bad faith' conduct to rise to the level of malicious

disregard of the insured's rights so as to warrant the imposition of punitive damages.”).

In sum, the only claims that remain for trial are plaintiffs’ bad faith claims, as set forth

in the second and fourth causes of action to plaintiff’s complaint. 

IT IS SO ORDERED.

Dated: November 15, 2007 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:06-cv-07368-PJH Document 50 Filed 11/15/07 Page 3 of 3