Continental Insurance Co. v. Superior Court

An insurer which had issued a directors and officers (D & O) liability policy sought a summary judgment in a bad faith action brought by three director insureds who alleged that the insurer had unreasonably failed to defend or indemnify them in a timely manner thus causing them economic loss and emotional distress. The trial court denied the summary judgment and the insurer seeks writ relief.

Continental Insurance Company (Continental) seeks a writ of mandate to compel the trial court to vacate its denial of Continental’s motion for summary judgment in the action filed by the real parties in interest, Dee Bangerter, Lee Bangerter and Ted Nelson (collectively, the plaintiffs) and to issue a new and different order granting said motion. Because we conclude that an issue of material fact does exist as to whether the plaintiffs in fact suffered any economic loss by virtue of Continental’s actions under the policy, we deny the requested writ relief.

Factual and Procedural Background

The plaintiffs are the former directors of a corporation known as Winn Enterprises and a subsidiary corporation, KF Dairies, Inc. During the period October 25, 1983 through October 25, 1987,…