Blue Shield of California Life & Health Insurance v. Superior Court

Blue Shield of California Life & Health Insurance Company (Blue Shield) seeks a peremptory writ of mandate directing the trial court to reverse its order denying Blue Shield’s motion for summary adjudication of plaintiff and real party in interest Myma Yumiko Kawakita’s tort cause of action for bad faith breach of a health insurance policy she obtained from Blue Shield. Blue Shield contends the cause of action is barred by the two-year limitations period for such claims, and was not extended to three *730 years by the policy’s statutorily mandated limitations provision. Assuming that Blue Shield’s interpretation of the statutorily mandated limitation provision is correct, we hold that Blue Shield, as permitted by law, drafted a more favorable provision that gave Kawakita three years to sue for a tortious breach of the implied covenant of good faith and fair dealing. Accordingly, we deny the petition.

FACTS AND PROCEDURAL HISTORY

In July 2009, Myma Kawakita sued Blue Shield, stating causes of action for breach of contract and tortious breach of the duty of good faith and fair dealing based on Blue Shield’s August 2006 decision to rescind Kawakita’s health insurance…