July 29, 2011

Two unpublished California court of appeal opinions reach different results in writ petitions involving claims for punitive damages

In Newland v. Superior Court, the California Court of Appeal, Third Appellate District, granted plaintiff's writ petition challenging the trial court's grant of summary adjudication on the plaintiff's punitive damages claim. The potentially punitive conduct was an insurance company's denial of a claim for a stolen car based upon the insurance adjuster's opinion that the insured had been responsible for the theft. The Court of Appeal found that the insurance company had not met its burden to show that the conduct could not be punitive given the allegedly inappropriate manner in which the insured was treated.

By contrast, in Old Republic Home Protection Co., Inc. v. Superior Court, the California Court of Appeal, Fourth Appellate District, Division Two, granted defendant's writ petition challenging the trial court's overruling of its demurrer to an insurance bad faith complaint that included a prayer for punitive damages. The lawsuit involved a claim for breach of a home warranty contract. The Court of Appeal held that breach of contract actions should not lightly be turned into tort actions outside the insurance context. Therefore, the bad faith claim, and the attendant claim for punitive damages, should be dismissed with prejudice.