Skip to Content
  • 2014

    With facts shockingly reminiscent of egregious conduct criticized thirty years ago in Betts v. Allstate Ins. Co. (1984) 154 Cal.App.3d 688, a court in Massachusetts recently excoriated AIG Claims Services, Inc. for its bad faith handling of a personal injury lawsuit by finding that AIG hired defense counsel to fabricate a version of the accident that did not happen, improperly coached witnesses to support that version, suppressed recorded statements from the same witnesses which contradicted the version offered at trial, and then filed a meritless appeal. See, Odin Anderson v. American International Group, Inc., Superior Court Civil Action No. 2003-01212-B. After a subsequent trial under Massachusetts statutes providing remedies for unfair and deceptive claims settlement practices, the court applied the maximum sanction of double damages. 

    Of particular interest to counsel having been exposed to a rather common negotiation tactic of AIG, footnote 17 of the Odin decision notes that AIG’s representative at settlement conferences claimed that AIG “internal protocols” required that any cash settlement payment be delayed “by at least 90 days.” Put on the stand, AIG’s executive vice president admitted that AIG had no such internal protocol.

    Unlike the Massachusetts statute, the California “Unfair Insurance Practices Act” set forth in Insurance Code § 790 et seq. does not provide for a direct action against an insurer after the decision in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287. However, in Yanting Zhang v. Superior Court (2013) 57 Cal.4th 364 the Supreme Court held that Moradi-Shalal does not preclude first party UCL actions (“Unfair Competition Law,” Bus. & Prof. Code § 17200 et. seq.) that are based on grounds independent from section 790.03 of the Unfair Insurance Practices Act, even when the insurer’s conduct also violates Insurance Code 790.03.

    Download or Print pdf.
    For more information about this topic please contact:

    Michael B. Geibel, Esq.
    Gibbs Giden Locher Turner Senet & Wittbrodt LLP
    1880 Century Park East, 12th Floor
    Los Angeles, California 90067
    Phone: (310) 552-3400

    The content contained herein is published online by Gibbs Giden Locher Turner Senet & Wittbrodt LLP (“Gibbs Giden”) for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. For specific questions about any of the content discussed herein or any of the content posted to this website please contact the article attorney author or send an email to The transmission of information on this, the Gibbs Giden website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this website please see the Legal Disclaimer section at This publication may not be reproduced or used in whole or in part without written consent of the firm.

    Copyright 2014 Gibbs Giden Locher Turner Senet & Wittbrodt LLP