The UCL's "unlawful" prong receives a little boost in Zhang v. Superior Court

The least loved may be the greedy insurance companies.  In Zhang v. Superior Court (California Capital Insurance Company) (October 29, 2009), the Court of Appeal (Fourth Appellate District, Division Two) was called upon to determine whether the alleged failure of an insurance company to adequately pay a loss claim was actionable in light of Insurance Code section 790.03 et seq., Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal.3d 287 (1988) and Textron Financial Corp. v. National Union Fire Ins. Co., 118 Cal.App.4th 1061 (2004):

This case presents the question of whether fraudulent conduct by an insurer, which is connected with conduct that would violate Insurance Code section 790.03 et seq.—sometimes referred to as the “Unfair Insurance Practices Act”—can also give rise to a private civil cause of action under the Unfair Competition Law (UCL), Business and Professions Code section 17200 et seq. The trial court ruled that it does not and, therefore, sustained defendant and real party in interest California Capital Insurance Company's demurrer to a cause of action under the UCL. We disagree and will direct the trial court to reinstate the cause of action.

Slip op., at 2.  After a thorough analysis of Moradi-Shalal in particular, the Court concluded that, because the plaintiff had also alleged false advertising, a prohibition on a private claim arising under the Unfair Insurance Practices Act was not at issue:

We take from Manufacturers Life that there is no reason to treat insurers differently from other businesses when it comes to actions under the UCL except as required by Moradi-Shalal. We understand that if a plaintiff relies on conduct that violates the Unfair Insurance Practices Act but is not otherwise prohibited, Moradi-Shalal requires that a civil action under the UCL be considered barred. Thus, if the plaintiff in this case had attempted to sue California Casualty under the UCL because the latter had “[n]ot attempt[ed] in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear” (Ins. Code, § 790.03, subd. (h)(5)) or “failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment [was] made” (Ins. Code, § 790.03, subd. (h)(9)), a somewhat closer question would be presented. (But see fn. 1, ante.) But that is not this case.

Slip op., at 8-9.

The UCL Practitioner, with the focus on all things UCL, has much more on this decision and cross-referenced material about Textron.  By the way, I asked The UCL Practitioner if her blog was the UCL Practitioner or The UCL Practitioner (the URL giving me pause as to which was right), and the definitive blog name is The UCL Practitioner.  I obviously burn a lot of calories wondering about fringe issues.