Appellant insured challenged the decision of the court of appeal (California), which reversed the trial court’s judgment granting respondent insurance company’s motion for judgment on the pleadings based on the defense that respondent had no duty to pay uninsured motorist benefits during the pendency of appellant’s workers’ compensation proceedings.
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Respondent insurance company initially refused to pay appellant insured uninsured motorist benefits because under the terms of the coverage, it did not owe appellant those benefits until her workers’ compensation claim had been resolved. The arbitration association ordered that arbitration be held in abeyance while appellant’s workers’ compensation proceeding was pending. Appellant filed a complaint for tortious breach of the insurance contract, and pled that respondent had breached its duty of good faith and fair dealing. The court concluded that respondent was not obligated to pay uninsured motorist benefits during the pendency of the workers’ compensation claim, and therefore, it had not breach its duty of good faith and fair dealing by delaying payment pending the outcome of that claim. The court also held that respondent had not engaged in unfair claims settlement practices in violation of Cal. Ins. Code § 790.03(h). Accordingly, the court held that the court of appeal erred when it held that appellant’s complaint stated a cause of action against respondent for breach of the covenant of good faith and fair dealing and for violation of its statutory duties.
The judgment of the court of appeal was reversed because the court concluded that respondent insurance company was not obligated to pay appellant insured uninsured motorist benefits during the pendency of her workers’ compensation claim, and therefore respondent had not breach its duty of good faith and fair dealing by delaying payment pending the outcome of the workers’ compensation proceeding.