Ganci Law Update: EP19 Understanding Court Decisions on Bad Faith Claims and Insurance Coverage Disputes

In this episode, Attorney Eric Ganci discusses several key legal cases and their implications, providing insight into the application of California law.

Molinar v. 21st Century Insurance Co. (2024)

Background: In this case, the parents and their daughter, all insured through 21st Century, faced a situation where the daughter caused a car crash. 21st Century denied coverage, arguing that the policy had been canceled before the accident. While they had sent the cancellation notice to the parents, they did not send it to the daughter.

Key Issue: Whether the daughter, who was not directly notified, was entitled to the cancellation notice under California law.

The Court found that, because the daughter was listed as an insured on the policy, 21st Century was required to notify her of the cancellation. The absence of notice rendered the cancellation invalid, allowing the daughter to maintain coverage.

Zavala v. Hyundai Motor America (2024)

Background: In this case, Plaintiff Zavala filed a warranty claim against Hyundai for failing to honor its warranty. Hyundai made a CCP 998 offer to settle, presenting Zavala with two options.

Key Issue: Whether the presence of two options in a CCP 998 offer automatically invalidates the offer.

The Court ruled that, while one of the options was too vague to be valid, the other $65,000 option was sufficiently clear. The Court held that each option in a CCP 998 offer could be evaluated separately, validating the offer as a whole. 

Carmichael v. Café Sevilla of Riverside, Inc. (2025)

Background: The plaintiffs allege that a violent incident at a rap concert at Café Sevilla was due to the club's failure to ensure safety, claiming that the venue’s violation of its conditional use permit resulted in negligence per see.

Key Issue: Whether the violation of the permit can lead to a negligence per se claim and if the rap concert was an ultrahazardous activity.

The Court found that the permit's purpose was not to protect concertgoers from violence but to prevent public nuisances. Additionally, the Court held that holding a rap concert was not an ultrahazardous activity. Therefore, the plaintiffs’ claims were dismissed. 

Medina v. St. George Auto Sales, Inc. (2024)

Background: In this case, the plaintiff purchased a used car that was misrepresented by the seller, alleging that the engine was improperly functioning and that extensive repairs had been concealed.

Key Issue: Whether the discovery rule applies to claims under the Consumer Legal Remedies Act (CLRA).

The Court ruled that the discovery rule applies to CLRA claims, meaning the statute of limitations begins when the plaintiff reasonably suspects that the injury was caused by wrongful conduct, not when the transaction occurred.

 

Molinar v. 21st Century Ins Co. (2024) 99 Cal.App.5th 1228.

Zavala v. Hyundai Motor America (2024) 328 Cal.Rptr.3d 147

McGranahan v. GEICO Indemnity Company, et al. (2024) 714 F.Supp.3d 1187

Carmichael, et al. v. Café Sevilla of Riverside, Inc., et al. (2025) 2025 WL 299642

Medina v. St. George Auto Sales, Inc. (2024) 103 Cal.App.5th 119

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