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Case — continued from Previous Page their conditions for years before finally admitting they are disabled. But by then, their “own occ” policies are no longer insuring their previous demanding occupations.


“The Disingenuous dispute” Another issue that frequently arises


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in individual disability-insurance bad-faith cases is the applicability of the genuine dispute doctrine. This doctrine was articu- lated in Chateau Chamberay Homeowners Association. v. Assoc. International Ins. Co. (2001) 90 Cal.App.4th 335, 347, where the court held that “an insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with its insured as to the existence of cov- erage liability or the amount of the insured’s coverage claim is not liable in bad faith even though it might be liable for breach of contract.” The California Supreme Court clarified in Wilson v. 21st Century Insurance Co. (2007) 42 Cal.4th 713, 723 that “[t]he genuine dispute rule does not relieve an insurer from its obli- gation to thoroughly and fairly investi- gate, process and evaluate the insured’s claim. A genuine dispute exists only where the insurer’s position is maintained in good faith and on reasonable grounds.” (Ibid., emphasis in original.) In Amadeo v. Principal Mutual Life


Insurance Co. (9th Cir. 2002) 290 F.3d 1152, the Ninth Circuit explained how the genuine issue doctrine works in the con- text of a motion for summary judgment: The genuine issue rule ... allows a dis-


72— The Advocate Magazine JUNE 2011 www.aldavlaw.com


trict court to grant summary judgment when it is undisputed or indisputable that the basis for the insurer’s denial of benefits was reasonable – for example, where even under the plaintiff’s version of the facts there is a genuine issue as to the insurer’s liability under California law.... On the other hand, an insurer is not entitled to summary judg- ment as a matter of law where, viewing the facts in the light most favorable to the plaintiff, a jury could conclude that the insurer acted unreasonably. (Amadeo, 290 F.3d at 1161-1162.)


See Case, Page 74


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