Smith v. State Farm Mutual Automobile Insurance

On November 10, 1986, Janice Smith and Robert Smith, individually and as personal representatives of the estate of their son, Christian Smith (hereafter appellants), filed this action against State Farm Mutual Automobile Insurance Company (hereafter State Farm) alleging breach of its duties under an insurance policy covering Patrick Donnelly (hereafter Donnelly), who killed their son in an automobile accident. The third amended complaint filed May 23, 1990, states three causes of action: first, breach of the implied covenant of good faith and fair dealing based on Donnelly’s assignment to appellants of his claims against State Farm; second, breach of statutory duties under Insurance Code section 790.03, also based on Donnelly’s assignment to appellants; and third, appellants’ own claim against State Farm for breach of the statutory duties under section 790.03. The second cause of action appeared for the first time in the third amended complaint; the other causes of action were stated in the original complaint. Appellants now appeal from a judgment of dismissal entered pursuant to an order sustaining a demurrer to each cause of action.

The third amended complaint alleges…