Court Opinion

ID: 9797326
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:18:23.259562+00
Date Added: 2024-06-11T08:54:27.083329
License: Public Domain

GEORGE, C. J., Concurring and Dissenting.
—Although I agree with the result reached by the majority—upholding the determination of the trial court and the Court of Appeal that in this case plaintiff insured’s damage award should not be reduced under either a comparative bad faith or comparative negligence theory—I do not agree with the majority’s proposal to reject the comparative bad faith doctrine in its entirety and to disapprove California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274 [218 Cal.Rptr. 817] (California Casualty), the seminal California decision that has been the controlling California authority on this issue for the past 15 years. Instead, I believe the court should rest its decision in this case solely upon the narrower, and fully dispositive, ground that the insured’s conduct here at issue—negligently providing incorrect answers to a discovery request—does not represent a breach of the implied covenant of good faith and fair dealing and does not constitute the type of misconduct that properly may reduce an insurer’s liability for damages resulting from its failure to accept a reasonable settlement offer.
In reaching the conclusion that California should adopt a rule precluding the application of a comparative bad faith doctrine under any circumstance, the majority relies upon the rationale that although an insurer’s bad faith conduct may support a tort action and tort damages, an insured’s bad faith conduct constitutes only a breach of contract and may not properly be used to reduce an insurer’s tort liability. Even if an insurer may not itself bring a tort action against an insured for breach of the covenant of good faith and fair dealing and may seek only contract damages for any loss the insurer sustains as a result of the insured’s bad faith conduct, however, it does not follow that when an insured seeks to recover tort damages against an insurer for breach of the covenant of good faith and fair dealing, the insured’s tort recovery may not be reduced to the extent that the insured’s own bad faith conduct has contributed to the injury or loss of the insured for which tort damages are sought.
In the past, this court has taken a broad view of the type of “comparative fault” of a plaintiff that may reduce damages in a tort action, permitting the *415comparative fault doctrine to be applied in strict liability cases (see, e.g., Daly v. General Motors Corp. (1978) 20 Cal.3d 725, 734-742 [144 Cal.Rptr. 380, 575 P.2d 1162]; Safeway Stores, Inc. v. Nest-Kart (1978) 21 Cal.3d 322, 328-332 [146 Cal.Rptr. 550, 579 P.2d 441]) and even in cases in which a plaintiff voluntarily chooses to engage in an unusually risky sport, whether or not the choice to do so is unreasonable. (Knight v. Jewett (1992) 3 Cal.4th 296, 314 [11 Cal.Rptr.2d 2, 834 P.2d 696].) As this court explained in Knight: “Past California cases have made it clear that the ‘comparative fault’ doctrine is a flexible, commonsense concept, under which a jury properly may consider and evaluate the relative responsibility of various parties for an injury (whether their responsibility for the injury rests on negligence, strict liability, or other theories of responsibility), in order to arrive at an ‘equitable apportionment or allocation of loss.’ [Citations.]” (Knight, supra, 3 Cal.4th at pp. 313-314, italics added.) In my view, it is neither fair nor compatible with our past comparative fault precedent to permit an insured to obtain tort damages when an insurer’s breach of the covenant of good faith and fair dealing is a proximate cause of an injury or loss incurred by the insured, but to refuse to permit a proportionate reduction in such tort damages when the insured’s own bad faith conduct also is a concurrent cause of the insured’s injury or loss.
Contrary to the reasoning of the majority, the circumstances in which a plaintiff’s conduct will support a reduction of recovery under the comparative fault or comparative responsibility doctrine are not limited to instances in which the plaintiff breaches a tort duty or may otherwise be held liable in tort. Indeed, the classic instance in which the comparative fault doctrine comes into play—that is, when a plaintiff’s injury is caused in part by the plaintiff’s failure to exercise due care with regard to his or her own safety— clearly demonstrates this point, because a plaintiff, of course, is not entitled to sue himself or herself in tort for a self-inflicted injury (and thus may not, for example, obtain recovery from his or her liability insurer for such an injury). Accordingly, rejection of the comparative bad faith doctrine cannot properly be defended on the theory that the insured owes no tort duty to the insurer or that the insured may be liable only in contract for any damage inflicted upon the insurer by the insured’s bad faith conduct.1
It is true, as the majority points out, that in some circumstances a comparative bad faith doctrine may not be necessary to protect the interests *416of the insurer. Thus, there will be instances in which an insurer may be able to establish that in light of the insured’s bad faith conduct (for example, the withholding of crucial information), the insurer’s own conduct (for example, a delay in paying a first party claim or the refusal to accept a settlement offer) did not constitute a breach of the covenant of good faith and fair dealing at all. And there may be other instances in which the harm caused by the insurer’s bad faith conduct is sufficiently distinct from the harm caused by the insured’s bad faith conduct that—even without a comparative bad faith doctrine—the insurer’s tort liability will reflect only the harm caused by the insurer, and the insurer may bring a contract claim (or, in appropriate circumstances, a fraud claim) to recover for a separate injury that the insured’s misconduct has inflicted upon the insurer.
But the existence of these circumstances in which a comparative bad faith doctrine is not necessary to ensure fair treatment of an insurer does not establish, as the majority implies, that a comparative bad faith doctrine is unnecessary in any circumstance. The comparative bad faith doctrine properly comes into play only in those circumstances in which both the insurer’s bad faith conduct and the insured’s own bad faith conduct are concurrent proximate causes of an indivisible harm or loss to the insured, such as emotional distress, for which the insured is seeking recovery in tort. It is precisely such circumstances that the alternative remedies relied upon by the majority do not reach. Thus, by rejecting the application of a comparative bad faith doctrine in all circumstances, the majority renders the insurer solely responsible for a loss or harm for which both the insurer and the insured are responsible—the very unfairness and inequity that the comparative fault doctrine is designed to alleviate.
Accordingly, in a case like California Casualty, supra, 173 Cal.App.3d 274, in which an insured seeks to obtain tort damages for an insurer’s alleged bad faith delay in failing to pay benefits due under a first party *417insurance policy, but in which the insured’s own bad faith conduct in failing to provide information to the insurer allegedly played some part in causing the resulting harm to the insured, I believe it would be appropriate for the insurer to obtain a reduction in the tort damages it must pay, based upon the comparative fault or relative responsibility of the insured for its own harm. Experience over the past 15 years since California Casualty was decided demonstrates the feasibility of applying comparative fault principles in such circumstances, and I see no reason to abandon completely the comparative bad faith doctrine at this point. Thus, I disagree with the majority insofar as it disapproves California Casualty and rejects the comparative bad faith doctrine in its entirety.
On the facts of the case now before us, however, I agree with the majority’s determination that plaintiff’s damages should not be reduced on either a comparative bad faith or comparative negligence theory. As the majority explains, the conduct of the insured here at issue—in negligently failing to provide a correct answer to a discovery request—does not constitute a breach of the insured’s duty of good faith and fair dealing to its insurer, nor the type of fault that should reduce the insurer’s liability. Furthermore the insured’s erroneous discovery response may not properly be characterized as a “legal cause” of the excess-damage award for which the insured is seeking to recover in its bad faith action against the insurer.
Accordingly, I concur in the affirmance of the judgment of the Court of Appeal.

Indeed, upon close analysis, it becomes clear that the majority’s conclusion is not supported by the circumstance that an insurer may seek only contract (and not tort) damages from an insured for an injury to the insurer resulting from the insured’s breach of the covenant of good faith and fair dealing. As noted above, when the comparative bad faith doctrine is invoked to reduce an insured’s tort recovery, the reduction is justified by the circumstance that the insured’s bad faith conduct has been found by the trier of fact to constitute one of the proximate causes of the loss or injury to the insured for which the insured is seeking tort *416recovery, and not because of some independent harm that the insured’s bad faith conduct has inflicted upon the insurer. When the harm imposed upon the insurer by an insured’s bad faith conduct lies simply in the circumstance that the insured’s bad faith conduct has contributed to a loss to the insured for which the insurer may be liable in tort, application of the comparative bad faith doctrine to determine what proportion of the loss should be allocated to the insurer on the one hand, and to the insured on the other, is the only appropriate means to measure the economic harm that the insured’s bad faith conduct has inflicted upon the insurer. Thus, even if it were appropriate to focus upon the circumstance that the insurer is limited to recovering contract damages from an insured for the insured’s breach of the covenant of good faith and fair dealing, in this setting the insurer’s contract damages logically would be measured by the insured’s proportionate responsibility for the tort damages, which is the same amount that would be deducted from the insured’s gross tort damages under the comparative bad faith doctrine.