Evidence — continued from Page 36
conduct. Although the Court of Appeal discussed Ford’s policies in addressing reprehensibility – noting “it is reprehensi- ble for a regulated manufacturer to implement a scheme that intentionally undermines the protections granted con- sumers by state law” – the court gave no express weight, in its assessment of the “constitutional maximum” permitted by the State Farm case, to the profitability of that scheme to Ford or the scale at which Ford pursued it. According to the Supreme Court,
although State Farm requires reasonably proportionality between punitive damages and actual or potential harm to the plain- tiff, what is a reasonable ratio necessarily depends on the reprehensibility of the conduct, “the most important indicium of the reasonableness award,” which, in turn, is influenced by the frequency and
profitability of the defendant’s prior or contemporaneous similar conduct.
Conducting pattern-and-practice discovery Plaintiffs in bad-faith cases should con-
duct extensive discovery into an insurers’ business practices to understand how a plaintiff’s claim fits into the larger context of an insurer’s pattern and practice of unfair claims handling. Developing evi- dence of a pattern and practice of unfair claims handling will help establish that what happened to the plaintiff was not an isolat- ed “mistake” or problem, but rather the direct result of the insurer’s intentional malice, oppression or deceit. In order to bolster the relevance of
similar instances of misconduct during dis- covery, plaintiffs often assert causes of action for unfair business practices alleging
that the insurer is engaging in a pattern and practice of improper conduct. Policyholders can still state a cause of action against insurers for unfair, unlawful or fraudulent conduct in handling claims under California Business and Professions Code section 17200. (State Farm Fire & Casualty Co. v. Superior Court (Allegro) (1996) 45 Cal.App.4th 1093 [53 Cal.Rptr.2d 229], but see, Textron Financial Corp. v. National Union Fire Ins. Co. of Pittsburgh (2004) 118 Cal.App.4th 1061, 1072 [13 Cal.Rptr.3d 586], which suggests (erroneously in the author’s view) that Allegro is no longer good law in light of Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163 [83 Cal.Rptr.2d 548].) Plaintiffs should seek discovery regard-
ing similar claims from policyholders, com- plaints to the insurer about similar issues, and other litigation against the company.
www.adrservices or
www.adrservices..org
Insurance Mediators Century City 310.201.0010 Downtown LA 213.683.1600 Orange County 949.863.9800 San Diego 619.233.1323
Linda Bulmash, Esq.
Hon. Hon. Hon. Hon. Joe Hilberman Dober David Horowitz Hon. Hon. Robert Letteau
Leonard Levy,y, Esq.
Denise Madigan, Esq.
Hon. Hon. Michael Marcus Hon. Hon. Gregory O’Brien Hon. Hon. Enrique Romero 38— The Advocate Magazine JUNE 2011 Hon. ober Hon. Robert Thomas Hon. Hon. homas AlexanderAlexander Wililliamsliams Ralph
Ralph Wililliamsliams, Esq.
, Hon. Hon. Eric Younger Younger Hon. Hon. John Zebrowski
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