501 EAST 51ST STREET, LONG-BEACH-10 LLC, Plaintiff and Appellant v. KOOKMIN BEST INSURANCE CO., LTD., et al., Defendants and Respondents. Filed 4/2/20; Certified for Publication 4/16/20 IN THE COURT OF APPEAL OF THE STATE OF CA SECOND APPELLATE DISTRICT Excerpts/Concepts by Junfola 4/17/20

KEY CONCEPTS

  • Breach of covenant of good faith and fair dealing, aka bad faith
  • Efficient proximate cause
  • Genuine dispute doctrine

WHAT IS THIS CASE ABOUT?

  • Defendants denied plaintiff’s claim for damages to its apartment complex caused by a ruptured underground water main.
  • Experts hired by plaintiff and defendants provided conflicting reports on the cause of the damage.
  • Plaintiff sued for bad faith, breach of contract, etc.
  • Defendants argued: “genuine dispute doctrine” provided a complete defense to a finding of bad faith. Denial was based on expert opinions that the damage was caused by long-term settlement and earth movement, which was not a covered loss.
  • Plaintiff appeals judgment following summary adjudication of plaintiff’s claim for breach of the covenant of good faith and fair dealing in favor of defendants.
  • Ruling: there is no material dispute whether defendants denied the claim in good faith based on an expert report concluding the damage was not caused by the broken water main, and affirm the judgment.  

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