Wilson v. All Service Insurance Corporation

91 Cal. App. 3d 793 (1979

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Nature of the Case

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Facts

D is a licensed insurance broker who on July 23, 1974, agreed to obtain a policy of automobile insurance for Ps. From D's efforts, Transnational Insurance Company issued an automobile insurance policy that included uninsured motorist coverage. While the Transnational policy was in effect, Ps sustained bodily injuries through the negligence of an uninsured motorist. Ps suffered severe emotional distress and physical injuries. Ps presented a claim to Transnational, pursuant to the uninsured motorist coverage afforded by the policy, of 15,000 on behalf of their minor child and a claim of $15,000 on behalf of the parents on emotional distress. While the claims were pending, Transnational was declared insolvent and placed in liquidation by the Insurance Commissioner. Ps settled their claims against Transnational for a total of $ 10,000. Ps placed Transnational on notice that it was acting in bad faith in connection with their claims under the policy; as a result of Transnational's bad faith, each P was entitled to punitive damages in excess of $50,000. Ps claimed that as a 'direct and proximate' result of D's negligence in failing to select a solvent insurance carrier, they were denied (1) a major portion of the benefits to which they were entitled under the policy's uninsured motorist coverage, namely: $15,000 for the child and $15,000 for parents, less the $10,000 received from Transnational, or a net total of $20,000; and (2) damages in the sum of at least $50,000 for each plaintiff arising out of the bad faith conduct of Transnational. Ps claimed that as a 'direct and proximate' result of D's negligence in failing to select a solvent insurance carrier, they were denied (1) a major portion of the benefits to which they were entitled under the policy's uninsured motorist coverage, namely: $15,000 for the child and $15,000 for parents, less the $10,000 received from Transnational, or a net total of $20,000; and (2) damages in the sum of at least $50,000 for each plaintiff arising out of the bad faith conduct of Transnational. D moved for summary judgment. The motion was granted. Ps appealed.