The Consumer Attorneys Association of Los Angeles holds its annual convention in Las Vegas every Labor Day weekend. I have attended for the past three years and always enjoy the Sunday morning insurance "red-eye" session. This year, Denise Sze, Ken Kahn, Corey Harris, and Ashley Harris were here with me, talking about our California cases and discussing patterns of claims conduct by insurers with other colleagues.

One of those pre-eminent California colleagues is Bill Shernoff. Bill is very much a gentleman and an extraordinary advocate for policyholders. His legal work has shaped California bad faith law and his instruction has motivated hundreds of attorneys including yours truly.

While he has been involved in may significant cases, I think the most important case impacting the law is Egan v. Mutual of Omaha,1 The court opinion has a significant discussion on many aspects of the relationship between the policyholder and the insurer, but the duty to fully investigate a claim in good faith is clearly set forth:

To protect these interests it is essential that an insurer fully inquire into possible bases that might support the insured’s claim. Although we recognize that distinguishing fraudulent from legitimate claims may occasionally be difficult for insurers, especially…an insurer cannot reasonably and in good faith deny payments to its insured without thoroughly investigating the foundation for its denial.

Bill Shernoff received another award this weekend. He certainly deserved it. But, when I think about Bill’s lasting work, I always remember this decision which he successfully litigated over 35 years ago.

Positive Thought for the Day:

Get going. Move forward. Aim High. Plan a takeoff. Don’t just sit on the runway and hope someone will come along and push the airplane. It simply won’t happen. Change your attitude and gain some altitude. Believe me, you’ll love it up here.
        – Donald Trump

1 Egan v. Mutual of Omaha, 24 Cal.3d 809, 620 P.2d 141, 69 Cal.Rptr. 691 (Cal. 1979).