Procedural Posture

Appellant insurer challenged the judgment entered by the Superior Court of Contra Costa County (California), which awarded appellee insured compensatory and punitive damages in an action for bad faith in the handling of an insurance claim under Cal. Ins. Code § 790.03(h).

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After appellant insurer failed to promptly handle appellee insured’s claim for weather damage to his roof, appellee attempted to repair the damage himself and was injured. Appellee filed an action for bad faith and breach of duty under Cal. Ins. Code § 790.03(h) and was awarded a judgment of compensatory and punitive damages. The court reversed and remanded the action for a new trial, holding that the lower court committed reversible error in not allowing appellant to raise in the jury instructions the issue of appellee’s comparative fault. The court reasoned that comparative fault should have application beyond negligence cases where, as in this case, appellee’s negligence combined with appellant’s breach of good faith to cause appellee’s injury. Further, appellee was not entitled to punitive damages because appellant’s inept handling of the claim did not rise to the level of malicious, fraudulent or oppressive conduct.


The court reversed and remanded the action, holding that the trial court erred in not instructing the jury regarding the comparative fault of appellee insured and further, that appellant insurer’s inept handling of the claim did not rise to the level of malicious disregard of the appellee’s rights such as would entitle him to an award of punitive damages.