(a) Any person who reports to, or causes a complaint to be filed with, the Contractors State License Board that a person licensed by that entity has engaged in professional misconduct, knowing the report or complaint to be false, is guilty of an infraction punishable by a fine not to exceed one thousand dollars ($1,000).
(b) The board may notify the appropriate district attorney or city attorney that a person has made or filed what the entity believes to be a false report or complaint against a licensee.
Building contractors in California risk having their license suspended or revoked for committing an offense "substantially related" to contracting activities. This typically includes crimes of fraud, theft, or violence.
If you suffer a criminal conviction, your freedom is at stake. But so is the contracting career you worked so hard to develop.
Our California Criminal Defense Lawyers might be able to help.1 We are former cops and prosecutors who now represent people accused of crimes. We also help California professionals (including contractors) resolve license discipline issues.
FROM STIMMEL LAW:
https://www.stimmel-law.com/en/articles/insurance-bad-faithfailure-properly-investigate-claim
332.Bad Faith (First Party)—Failure to Properly Investigate
Claim—Essential Factual Elements
[Name of plaintiff] claims that [name of defendant] acted unreasonably, that is, without proper cause, by failing to conduct a proper investigation of [his/her/its] claim. To establish this claim, [name of plaintiff] must prove all of the following:
1. That [name of plaintiff] suffered a loss covered under an insurance policy issued by [name of defendant];
2. That [name of plaintiff] properly presented a claim to [name of defendant] to be compensated for the loss;
3. That [name of defendant], failed to conduct a full, fair, prompt, and thorough investigation of all of the bases of [name of plaintiff]’s claim;
4. That [name of plaintiff] was harmed; and
5. That [name of defendant]’s failure to properly investigate the claim was a substantial factor in causing [name of plaintiff]’s harm.
When investigating [name of plaintiff]’s claim, [name of defendant] had a duty to diligently search for and consider evidence that supported coverage of the claimed loss.
New September 2003; Revised December 2005, December 2007, April 2008,
December 2015, June 2016
Directions for Use
This instruction sets forth a claim for breach of the implied covenant of good faith
and fair dealing based on the insurer’s failure or refusal to conduct a proper
investigation of the plaintiff’s claim. The claim alleges that the insurer acted
unreasonably, that is, without proper cause, by failing to properly investigate the
claim. (See Rappaport-Scott v. Interinsurance Exch. of the Auto. Club (2007) 146
Cal.App.4th 831, 837 [53 Cal.Rptr.3d 245].)
The instructions in this series assume that the plaintiff is the insured and the
defendant is the insurer. The party designations may be changed if appropriate to
the facts of the case.
Sources and Authority
• “[A]n insurer may breach the covenant of good faith and fair dealing when it
fails to properly investigate its insured’s claim.” (Egan v. Mutual of Omaha
Insurance Co. (1979) 24 Cal.3d 809, 817 [169 Cal.Rptr. 691, 620 P.2d 141].)
• “To fulfill its implied obligation, an insurer must give at least as much
consideration to the interests of the insured as it gives to its own interests.
When the insurer unreasonably and in bad faith withholds payment of the claim
of its insured, it is subject to liability in tort. And an insurer cannot reasonably
and in good faith deny payments to its insured without fully investigating the
grounds for its denial.” (From moethelydo v. Fire Insurance Exchange (1986) 42
Cal.3d 208, 214–215 [228 Cal.Rptr. 160, 721 P.2d 41], internal citation
omitted.)
• “To protect [an insured’s] interests it is essential that an insurer fully inquire
into possible bases that might support the insured’s claim. Although we
recognize that distinguishing fraudulent from legitimate claims may occasionally
be difficult for insurers, . . . an insurer cannot reasonably and in good faith
deny payments to its insured without thoroughly investigating the foundation for
its denial.” (Egan, supra, 24 Cal.3d at p. 819.)
• “When investigating a claim, an insurance company has a duty to diligently
search for evidence which supports its insured’s claim. If it seeks to discover
only the evidence that defeats the claim it holds its own interest above that of
the insured.” (Mariscal v. Old Republic Life Ins. Co. (1996) 42 Cal.App.4th
1617, 1620 [50 Cal.Rptr.2d 224].)
• “While we agree with the trial court . . . that the insurer’s interpretation of the
language of its policy which led to its original denial of [the insured]’s claim
was reasonable, it does not follow that [the insurer]’s resulting claim denial can
be justified in the absence of a full, fair and thorough investigation of all of the
bases of the claim that was presented.” (Jordan v. Allstate Ins. Co. (2007) 148
Cal.App.4th 1062, 1066 [56 Cal.Rptr.3d 312], original italics.)
• “An unreasonable failure to investigate amounting to . . . unfair dealing may
be found when an insurer fails to consider, or seek to discover, evidence
relevant to the issues of liability and damages. . . . [¶] The insurer’s willingness
to reconsider its denial of coverage and to continue an investigation into a claim
has been held to weigh in favor of its good faith.” (Shade Foods, Inc. v.
Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 880
[93 Cal.Rptr.2d 364], internal citation omitted.)
• “[The insurer], of course, was not obliged to accept [the doctor]’s opinion
without scrutiny or investigation. To the extent it had good faith doubts, the
insurer would have been within its rights to investigate the basis for [plaintiff]’s
claim by asking [the doctor] to reexamine or further explain his findings, having
a physician review all the submitted medical records and offer an opinion, or, if
necessary, having its insured examined by other physicians (as it later did).
What it could not do, consistent with the implied covenant of good faith and
fair dealing, was ignore [the doctor]’s conclusions without any attempt at
adequate investigation, and reach contrary conclusions lacking any discernable
medical foundation.” (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713,
722 [68 Cal.Rptr.3d 746, 171 P.3d 1082], original italics.)
• “[W]hether an insurer breached its duty to investigate [is] a question of fact to
be determined by the particular circumstances of each case.” (Paulfrey v. Blue
Chip Stamps (1983) 150 Cal.App.3d 187, 196 [197 Cal.Rptr. 501].)
• “[L]iability in tort arises only if the conduct was unreasonable, that is, without
proper cause.” (Rappaport-Scott, supra, 146 Cal.App.4th at p. 837.)
• “[W]ithout actual presentation of a claim by the insured in compliance with
claims procedures contained in the policy, there is no duty imposed on the
insurer to investigate the claim.” (California Shoppers, Inc. v. Royal Globe
Insurance Co. (1985) 175 Cal.App.3d 1, 57 [221 Cal.Rptr. 171].)
• “It would seem reasonable that any responsibility to investigate on an insurer’s
part would not arise unless and until the threshold issue as to whether a claim
was filed, or a good faith effort to comply with claims procedure was made, has
been determined. In no event could an insured fail to keep his/her part of the
bargain in the first instance, and thereafter seek recovery for breach of a duty to
pay seeking punitive damages based on an insurer’s failure to investigate a
nonclaim.” (Paulfrey, supra, 150 Cal.App.3d at pp. 199–200.)
Conclusion:
Delay in resolution alone or lack of courtesy does not constitute bad faith. It requires an intent on the part of the insurance company to evade responsibility. Insurance companies do not make money by paying out claims: they make money by selling insurance. In such a situation it is not surprising that some insurance companies begin to slant their investigation and actions to minimize the chance of paying out on claims. Even if not explicitly stated, employees of an insurance company are going to understand that monies spent to compensate policy holders are not monies retained by the employer.
It is because of this implicit economic interest that bad faith law was developed so that the insurance companies face greater exposure than that available in a simple breach of contract action. After a few sizable judgments, the cost benefit analysis radically alters for the insurance companies and the number of instances of bad faith can be expected to decline.
But they still exist and the wise policy holder will keep that in mind as he or she interacts with the insurance company to develop appropriate payout for a claim.
COMPOUNDING CRIME OFFENSE
https://law.jrank.org/pages/5494/Compounding-Offense.html
BAD FAITH INSURANCE
332.Bad Faith (First Party)—Failure to Properly Investigate
Claim—Essential Factual Elements
[Name of plaintiff] claims that [name of defendant] acted unreasonably, that is, without proper cause, by failing to conduct a proper investigation of [his/her/its] claim. To establish this claim, [name of plaintiff] must prove all of the following:
1. That [name of plaintiff] suffered a loss covered under an insurance policy issued by [name of defendant];
2. That [name of plaintiff] properly presented a claim to [name of defendant] to be compensated for the loss;
3. That [name of defendant], failed to conduct a full, fair, prompt, and thorough investigation of all of the bases of [name of plaintiff]’s claim;
4. That [name of plaintiff] was harmed; and
5. That [name of defendant]’s failure to properly investigate the claim was a substantial factor in causing [name of plaintiff]’s harm.
• “When investigating a claim, an insurance company has a duty to diligently
search for evidence which supports its insured’s claim. If it seeks to discover
only the evidence that defeats the claim it holds its own interest above that of
the insured.” (Mariscal v. Old Republic Life Ins. Co. (1996) 42 Cal.App.4th
1617, 1620 [50 Cal.Rptr.2d 224].)
• “To protect [an insured’s] interests it is essential that an insurer fully inquire
into possible bases that might support the insured’s claim. Although we
recognize that distinguishing fraudulent from legitimate claims may occasionally
be difficult for insurers, . . . an insurer cannot reasonably and in good faith
deny payments to its insured without thoroughly investigating the foundation for
its denial.” (Egan, supra, 24 Cal.3d at p. 819.)
• “To fulfill its implied obligation, an insurer must give at least as much
consideration to the interests of the insured as it gives to its own interests.
When the insurer unreasonably and in bad faith withholds payment of the claim
of its insured, it is subject to liability in tort. And an insurer cannot reasonably
and in good faith deny payments to its insured without fully investigating the
grounds for its denial.” (Frommoethelydo v. Fire Insurance Exchange (1986) 42
Cal.3d 208, 214–215 [228 Cal.Rptr. 160, 721 P.2d 41], internal citation
omitted.)
• “[A]n insurer may breach the covenant of good faith and fair dealing when it
fails to properly investigate its insured’s claim.” (Egan v. Mutual of Omaha
Insurance Co. (1979) 24 Cal.3d 809, 817 [169 Cal.Rptr. 691, 620 P.2d 141].)
What You Should Know about the Implied Duty of Good Faith and Fair Dealing
Be aware of what you're getting into before signing a large-chain franchise contract.
By Catherine Pastrikos Kelly
https://www.americanbar.org/groups/litigation/committees/business-torts-unfair-competition/practice/2016/duty-of-good-faith-fair-dealing/
