John Avila v. The Travelers Insurance Companies, a Corporation

Avila appeals from a published MEMORANDUM OF DECISION & ORDER, Avila v. Travelers Ins. Companies, 481 F.Supp. 431 (C.D.Cal.1979), dismissing by summary judgment his suit alleging that travelers committed unfair settlement practices in violation of California Insurance Code § 790.03(h)(3) and (h)(5). The suit is based upon and seeks to apply retroactively the recent holding of Royal Globe Insurance Company v. Superior Court, 23 Cal.3d 880 , 153 Cal.Rptr. 842 , 592 P.2d 329 (1979), which held that third party claimants can bring a cause of action against an insured’s insurance company for statutory violations of Cal.Ins. Code § 790.03(h)(5) and (h)(14). The conduct complained of here occurred prior to the Royal Globe decision. The underlying lawsuit was settled for $50,000 in April 1979, approximately three years after commencement of the wrongful death suit and two years after Avila contends liability became reasonably clear. The facts pertaining to the chronology of presettlement negotiations are set forth in the District Court opinion. 481 F.Supp. at 433-34 .

The District Court granted summary judgment on the following grounds: (1) third party claimants do not have standing to…