Richardson v. Allstate Insurance

Plaintiff Penny Ranae Richardson appeals from a judgment of dismissal after the sustaining of a demurrer without leave to amend. The main issue on appeal is what limitation period applies to an action against an insurer for breach of an implied covenant of good faith and fair dealing.

The facts are set forth according to the rule that the allegations of a complaint are deemed true for the purpose of testing an order sustaining a demurrer. (Molien v. Kaiser Foundation Hospital (1980) 27 Cal.3d 916, 919 [ 167 Cal.Rptr. 831 , 616 P.2d 813 ].)

On July 3, 1972, plaintiff, who was then 15 years old, was a passenger in an automobile involved in a collision in a supermarket parking lot. Defendant Allstate Insurance Company (Allstate) had issued a policy of insurance to the father of the vehicle’s driver, containing medical expense coverage with a maximum limit of $5,000 per person per accident. Claims were submitted on behalf of plaintiff to Allstate reflecting medical expenses in excess of $5,000, which included expenses for surgery to plaintiff’s left knee.

Allstate’s claim examiner informed plaintiff that it would be necessary for plaintiff to be examined by a physician…