Court Opinion

ID: 9548410
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:03:01.79248+00
Date Added: 2024-06-11T15:18:54.221256
License: Public Domain

*221GRODIN, J., Concurring and Dissenting.
I concur in the majority’s conclusion that the evidence in the record is insufficient to demonstrate that the insurer acted with malice in making its report to the Bureau of Fraudulent Claims (Bureau). As the majority notes, the receipt which plaintiff submitted to the insurer in support of his claimed loss contained, on its face, an indication that the relevant date may have been altered, and the insurer’s investigation confirmed that the receipt had in fact been backdated. There is no evidence to suggest that the insurer realized when it reported the matter to the Bureau that the insured’s claim was actually valid or that it made the report simply to avoid its contractual obligations. On these facts, I agree that Insurance Code section 12993 precludes the insurer from being held liable for any damage plaintiff may have suffered as a result of either the insurer’s report to the Bureau or the subsequent criminal proceedings. Since, as the majority points out, the substantial damages awarded by the jury in this case were attributable, at least in large part, to the filing of the report and the manner in which the criminal proceeding against defendant was handled, the bulk of the damage award must be reversed.
Where I part company with the majority, however, is in its conclusion that—despite the above error—the jury’is imposition of liability on the insurer for breach of the covenant of good faith and fair dealing should nonetheless be affirmed. (Ante, p. 220.) In reaching this conclusion, the majority states that “the evidence shows that after the dismissal of the criminal charges the insurer breached its duty to investigate.” (Ante, p. 220.) The jury, however, was never asked to determine whether the insurer’s “post-dismissal”—or, perhaps more precisely, nonprivileged1—conduct, considered alone, constituted a breach of the covenant of good faith and fair dealing. As noted, much of the evidence presented at trial related to the events surrounding the insurer’s filing of the reports with the Bureau and the resulting criminal proceeding, and the jury was not instructed that, in determining whether the insurer had violated its duty of good faith and fair dealing, it could not consider the insurer’s privileged conduct or the consequences that flowed from such conduct.
Nor do I think that we can properly find on this record that the insurer’s nonprivileged conduct constituted a tortious breach of the covenant of good faith and fair dealing as a matter of law. Contrary to the majority’s intimation, Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809 [169 Cal.Rptr. 691, 620 P.2d 141] neither holds nor suggests that an insurer, *222which discovers, after considerable investigation, that its insured has filed a false proof-of-loss statement, invariably breaches the covenant of good faith and fair dealing simply by failing to undertake further investigation of new evidence belatedly presented by the insured. Although under some circumstances an insurer’s failure to pursue additional investigation of an insured’s claim might be found to constitute bad faith conduct, it surely would be appropriate in making that determination for the trier of fact to take into account the earlier investigatory efforts of the insurer and the relative culpability of the insured. It is not proper to foreclose or to prejudge that inquiry here.
Thus, I conclude that the judgment should be reversed in its entirety.2 If plaintiff chooses to pursue the matter, the case should be retried and submitted to the jury under proper legal principles.
Lucas, J., concurred.
Respondent’s petition for a rehearing was denied September 25, 1986.

Although the majority opinion refers to conduct of the insurer which occurred “after the dismissal of the criminal charges,” it would appear that the jury—in passing on the breach-of-the-covenant-of-good-faith question—could properly consider both pre and postdismissal conduct of the insurer that was not a part of the activity to which section 12993’s privilege attaches.

Contrary to the majority’s suggestion, I do not think we can properly affirm the judgment “insofar as it awards plaintiff $8,771.” (Ante, p. 220.) As the majority’s statement of facts indicates (ante, p. 214), at the beginning of trial plaintiff dismissed his breach of contract claim; as a consequence, the jury was not instructed on breach of contract—as contrasted with breach of the covenant of good faith and fair dealing—principles. Thus, if the $8,771 award is to be sustained, it can only be upheld as a proper portion of the damages obtainable for the insurer’s breach of the covenant. Because the jury has not yet determined whether the insurer’s nonprivileged conduct amounted to a breach of the covenant, however, we cannot affirm any damages that were predicated on such a breach.