Paulfrey

Defendants and Appellants Aetna Life Insurance Company (Aetna) and Blue Chip Stamps (Blue Chip) appeal from a judgment awarding plaintiff and respondent Annette Paulfrey (Paulfrey) compensatory and punitive damages for bad faith breach of an insurance contract.

The trial court improperly granted Paulfrey’s motion for a directed verdict; we therefore reverse the judgment and remand the case for further proceedings.

Factual and Procedural Background

The crucial three causes of action on which this case went to trial alleged bad faith breach of an insurance contract. The first cause alleged that Paulfrey filed a claim on Aetna’s form through Blue Chip within 90 days after the accident and that representations were made that her bills would be paid. In March 1976, Aetna advised her for the first time that her claim was denied because she failed to file written proof of loss.

The second cause incorporated the first, and added an alternative that even if Paulfrey did not comply with certain requirements of the Aetna policy, those requirements were waived.

The third cause alleged that Paulfrey had properly filed her claim with Aetna through Blue Chip and that Blue Chip…