Source: http://www.ehrlichfirm.com/articles-briefs/the-genuine-dispute-doctrine-after-wilson-v-21st-century-ins-co.html
Timestamp: 2019-04-18 20:40:23+00:00

Document:
In early 2007, I wrote an article for the Consumer Attorneys of California’s Forum magazine, in which I compared the growth of the so-called genuine-dispute or genuine-issue doctrine to barnacles attaching themselves to the hull of a ship. I borrowed this metaphor from Professor Arthur Miller, who likened the development of common-law doctrines to a ship becoming weighted down with barnacles. He explained that, from time to time, it became necessary for a high court to haul the ship out of the water and scrape the barnacles away. I wrote that I hoped that the Supreme Court of California would take the opportunity to scrape away the genuine-issue doctrine when it decided Wilson v. 21st Century Insurance Co., which was then pending before it.
The Supreme Court issued its opinion in Wilson in November 2007. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 714 [68 Cal.Rptr.3d 746].) When I first read the decision, I was disappointed because the Court did not completely do away with the doctrine. But on further review of the decision, I came to believe that most of the barnacles had, in fact, been scraped away, and that the genuine-issue doctrine after Wilson was a far more limited, less potent defense for insurers, and that many bad-faith cases that might formerly have been disposed of on summary judgment would now go to a jury.
The doctrine went unmentioned in the California cases for the next eight years, until Filippo Industries, Inc. v. Sun Ins. Co. (1999) 74 Cal.App.4th 1429 [88 Cal.Rptr.2d 881], where the court declined to apply the doctrine to overturn a bad-faith verdict.
The genuine-issue defense became firmly established in California after the decisions in Fraley v. Allstate Ins. Co. (2000) 81 Cal.App.4th 1282 [97 Cal.Rptr.2d 386], Guebara v. Allstate Ins. Co. (9th Cir. 2001) 237 F.3d 987, and Chateau Chamberay Homeowners Association v. Assoc. International Ins. Co (2001) 90 Cal.App.4th 335 [108 Cal.Rptr.2d 776]. As of April 2008, Fraley’s discussion of the genuine-issue doctrine has been cited by 17 California appellate decisions, and in 29 federal decisions. Chateau Chamberay’s discussion of the doctrine has been cited in 24 California appellate decisions and 25 federal decisions.
Chateau Chamberay was the California appellate equivalent to Guebara, also finding that the doctrine was applicable to both factual and legal disputes, and adopting the list of factors that would allow a court not to apply the doctrine in a particular case.
Courts continued to apply the doctrine with increasing frequency and more broadly. In Rappaport-Scott v. Interinsurance Exchange of the Automobile Club (2007) 146 Cal.App.4th 831 [53 Cal.Rptr.3d 245], the court applied the doctrine at the pleading stage, affirming a demurrer to a bad-faith action because the complaint (supposedly) showed that, as a matter of law, there was a genuine dispute.
Relying on this rule, in Starr-Gordon v. Massachusetts Mutual Life Ins. Co. (E.D. Cal. 2006) 2006 WL 3218778, a district court held that the genuine-issue doctrine compelled it to grant summary adjudication against the policyholder on her bad-faith claim, even though the record would support a jury finding that the carrier fraudulently terminated her benefits with knowledge that she was entitled to these benefits.

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