Research Questions

For the following questions, answer each question directly ("yes" or "no," for example, if the question can be answered "yes" or "no"), provide a quotation from the appropriate source, and provide a citation to your answer in the style of the California Style Manual within parentheses (and including the parentheses) unless otherwise specified.

Assume the following hypothetical:

Phyllis Dietrichson purchased an automobile liability insurance policy from the Pacific All Risk Insurance Company (Pacific) with a $100,000 policy limit. Dietrichson was in an automobile accident with Walter Neff, who sued her for negligence. Dietrichson tendered defense of the lawsuit against her to Pacific, which hired a lawyer and vigorously contested Neff's claim despite clear evidence that Dietrichson was completely at fault and that Neff's damages exceeded the policy limits. Shortly before trial, Pacific settled the lawsuit with Neff for the $100,000 policy limits. Neff now wants to sue Pacific for bad faith claims handling under California Insurance Code section 790.03, subdivision (h).

1. If all of the events in this hypothetical occurred in 1980, according to a 1979 decision of the California Supreme Court, could Neff sue for bad faith settlement practices? (Answer yes or no, provide a supporting quotation, and cite the case. )
2. The case that is the answer to question 1 was overruled in 1988. What case overruled the case that is the answer to question 1?
3. What is the latest published California appellate case to cite the case that is the answer to question 1?
4. The case that is the answer to question 1 appears in the Rutter Group publication on insurance litigation. Where is it cited?