Pick Your Lane

Click the card that matches your situation to see viable theories, common traps, and evidence that matters.

⚠ Critical Distinction

If your theory is "the insurer handled my claim unfairly," you may hit the Moradi-Shalal wall. If your theory is "the insurer made post-settlement representations and I relied to my detriment," you may have viable contract and fraud theories.

California Settlement Fallout Analyzer

Answer these questions to identify viable theories, dead ends, and evidence priorities.

1. What is your relationship to the insurance policy?
2. What is the settlement status?
3. What went wrong?
4. What harm resulted?

Preliminary Analysis

Based on your inputs, here are the likely viable theories and key considerations.

Case Law & Statutory Authorities

The controlling authorities for California insurance settlement disputes, organized by issue.

📖 How to Use This Table

Each authority is tagged by category. The "Use For" column explains when to cite each case.

Authority Key Holding / Relevance Use For Category
Moradi-Shalal v. Fireman's Fund
(1988) 46 Cal.3d 287
 Overruled Royal Globe; generally no private right of action for violations of Insurance Code § 790.03(h) (unfair claims settlement practices). Third parties typically cannot sue insurers directly for UIPA violations as framed. Defending against "bad faith" claims; explaining third-party limits Third-Party Limits
Zhang v. Superior Court
(2013) 57 Cal.4th 364
 UCL claims against insurers can proceed in appropriate first-party contexts; does not resurrect Royal Globe but shows Moradi-Shalal has limits. First-party UCL theories; explaining what survives Moradi-Shalal Third-Party Limits
CCP § 664.6
Cal. Code Civ. Proc.
 Allows enforcement of settlements by motion where parties sign or orally agree before the court. Court retains jurisdiction to enforce. Strict signature/consent rules apply. Enforcing court-supervised settlements; procedural strategy Settlement
Levy v. Superior Court
(1995) 10 Cal.4th 578
 Established strict signature requirements for 664.6 enforcement. All parties to be bound must personally sign (agent signature insufficient unless statutory authority). Challenging/defending 664.6 enforcement; signature traps Settlement
Wackeen v. Malis
(2002) 97 Cal.App.4th 429
 Court must retain jurisdiction before dismissal to later enforce under 664.6. Dismissal without retention = lose 664.6 path. Procedural trap warnings; alternative enforcement paths Settlement
Mesa RHF Partners v. City of Los Angeles
(2019) 33 Cal.App.5th 913
 Reinforces strict compliance with 664.6 requirements. Failure to properly retain jurisdiction or obtain required signatures defeats enforcement. Defending against improper 664.6 motions; procedural requirements Settlement
Critzer v. Enos
(2010) 187 Cal.App.4th 1242
 Key guidance on 664.6 three requirements: (1) litigation pending, (2) parties themselves agree (not just counsel), (3) signed writing or oral before court. Sharpens "retained jurisdiction" analysis. 664.6 procedural traps; retained jurisdiction requirements Settlement
CalFarm Ins. Co. v. Krusiewicz
(2005) 131 Cal.App.4th 273
 Promissory estoppel enforced against insurer. Key for "post-settlement promise + reliance" scenarios. Also discusses punitive damages limitations. Post-settlement representations; promissory estoppel vs. fraud election Settlement
Lazar v. Superior Court
(1996) 12 Cal.4th 631
 Defines elements of fraud/deceit and heightened pleading requirements. Reliance must be justifiable; misrepresentation must be material. Pleading fraud claims; post-settlement misrepresentation theories Fraud/Reliance
Robinson Helicopter v. Dana Corp.
(2004) 34 Cal.4th 979
 Fraud exception to economic loss rule: where fraud is independent of contract breach, tort damages are recoverable even for purely economic loss. Overcoming economic loss rule; fraud as independent tort Fraud/Reliance
Rattagan v. Uber Technologies, Inc.
(2024) 17 Cal.5th 1
 Modern guidance on fraudulent concealment and economic loss boundaries. Clarifies when concealment-based fraud claims survive. Concealment theories; modern economic loss analysis Fraud/Reliance
Bily v. Arthur Young & Co.
(1992) 3 Cal.4th 370
 Key authority on negligent misrepresentation elements and duty limitations. Justifiable reliance is central. Negligent misrep theories; duty and reliance analysis Fraud/Reliance
Comunale v. Traders & General Ins.
(1958) 50 Cal.2d 654
 Foundational duty to settle case. Insurer must accept reasonable settlement within limits; failure exposes insurer to excess judgment. Excess exposure claims; duty to settle fundamentals Duty to Settle
Johansen v. Cal. State Auto. Assn.
(1975) 15 Cal.3d 9
 Duty to settle exists even when coverage disputed. Reasonableness of settlement evaluated objectively. Coverage dispute + settlement scenarios; objective standard Duty to Settle
Crisci v. Security Ins. Co.
(1967) 66 Cal.2d 425
 Bad faith settlement refusal damages include excess judgment, emotional distress. Insurer's evaluation was unreasonable. Bad faith damages; emotional distress in insurance cases Duty to Settle
Murphy v. Allstate Ins. Co.
(1976) 17 Cal.3d 937
 Third-party/judgment creditor standing issues in duty-to-settle claims. Assignment may be necessary for certain theories. Third-party standing; assignment requirements Duty to Settle
Hamilton v. Maryland Casualty
(2002) 27 Cal.4th 718
 Limits on stipulated judgment / assignment "setups." Insurer not bound by unreasonable stipulated judgment; assignment has boundaries. Evaluating assignment viability; stipulated judgment risks Duty to Settle
Ins. Code § 11580(b)(2)
Cal. Insurance Code
 After obtaining judgment against insured, judgment creditor may bring direct action on the policy against insurer (up to policy limits). Post-judgment collection; direct action procedure Direct Action
Wright v. Fireman's Fund Ins.
(1992) 11 Cal.App.4th 998
 Frames 11580 direct action as contractual (on the policy), not tort. Limited to policy terms/limits. Understanding direct action scope; managing expectations Direct Action
Civil Code § 1542
Cal. Civil Code
 Default rule: release does not extend to unknown claims. But can be expressly waived. Waiver language is heavily litigated. Release interpretation; unknown claims preservation Release/1542
Winet v. Price
(1992) 4 Cal.App.4th 1159
 Release ambiguity allows parol evidence to determine intent. If language unclear, extrinsic evidence admissible. Attacking/defending release scope; parol evidence strategy Release/1542
Skrbina v. Fleming Cos.
(1996) 45 Cal.App.4th 1353
 Release can be attacked if procured by fraud or misrepresentation. Knowing falsity + intent to deceive required. Fraud in the inducement; release rescission Release/1542
Lewis Jorge Construction v. Pomona USD
(2004) 34 Cal.4th 960
 Consequential damages in contract: must be foreseeable and within contemplation at contracting. "Foreseeability wall" for speculative damages. Damages analysis; limiting/expanding consequential recovery Damages
Alliance Mortgage v. Rothwell
(1995) 10 Cal.4th 1226
 Foreclosure-related reliance and fraud analysis. Fraud claims can survive "full credit bid" issues in appropriate circumstances. Foreclosure causation; fraud survival post-foreclosure Damages
Raedeke v. Gibraltar Sav. & Loan
(1974) 10 Cal.3d 665
 Wrongful foreclosure anchor case. Establishes framework for foreclosure injury analysis. Foreclosure causation framing; wrongful foreclosure elements Damages
Egan v. Mutual of Omaha Ins. Co.
(1979) 24 Cal.3d 809
 Establishes tort remedy for bad faith breach of insurance contract. Insurer must act reasonably and in good faith. Unreasonable conduct = tort damages. First-party bad faith elements; tort vs. contract damages First-Party Bad Faith
Gruenberg v. Aetna Ins. Co.
(1973) 9 Cal.3d 566
 Foundational bad faith case. Implied covenant of good faith in insurance contracts gives rise to tort action when breached. Historical foundation; implied covenant theory First-Party Bad Faith
Chateau Chamberay Homeowners v. Associated Int'l Ins.
(2001) 90 Cal.App.4th 335
 Genuine dispute doctrine: insurer not in bad faith if there was genuine dispute about coverage or claim validity, even if insurer later loses. Defending insurers; understanding bad faith limits First-Party Bad Faith
Careau & Co. v. Security Pacific Business Credit
(1990) 222 Cal.App.3d 1371
 Standard for breach of implied covenant in commercial context. Bad faith requires more than mere breach; must show conscious disregard of counterparty's interests. Contract breach analysis; implied covenant standards Contract Breach
Riverisland Cold Storage v. Fresno-Madera
(2013) 55 Cal.4th 1169
 Parol evidence rule does not bar fraud claims. Even integrated contracts can be attacked by evidence of fraudulent misrepresentations. Overcoming integration clauses; fraud exceptions Fraud/Reliance
Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Dev. Corp.
(1995) 32 Cal.App.4th 985
 Addresses no-reliance clauses in contracts. Courts split on enforceability; strong public policy against permitting fraud. No-reliance clause analysis; fraud despite contractual disclaimers Release/1542
Lona v. Citibank, N.A.
(2011) 202 Cal.App.4th 89
 Tender exceptions in wrongful foreclosure. Tender not required where sale is void, or where requiring tender would be inequitable given the circumstances. Foreclosure set-aside without full tender; equity-based exceptions Wrongful Foreclosure
Dimock v. Emerald Properties LLC
(2000) 81 Cal.App.4th 868
 Void vs. voidable sales. Where sale is void (e.g., wrong trustee conducted sale after substitution), tender is not required to set aside. Authority defects; trustee substitution issues; void sale doctrine Wrongful Foreclosure
Civ. Code § 2924m
Cal. Civil Code (SB 1079)
 SB 1079 sale finality. Establishes 15-day and 45-day finality windows for trustee sales. Owner-occupant affidavit can accelerate finality. Title remains with trustor until sale deemed final. Post-sale challenges; false affidavit leverage; finality timing for TRO posture Wrongful Foreclosure
✅ Pro Tip

When pitching to a litigation firm, lead with the Hamilton and Moradi-Shalal analysis to show you understand the landmines. Then pivot to the contract/fraud theories that survive.

Evidence & Timeline Builder

The documents and timeline that make or break these cases.

Settlement & Insurer Documents

Settlement agreement / term sheet
All versions, drafts, and final executed copy
Release document (if any)
Check for 1542 waiver language, integration clause, no-reliance clause
All insurer communications post-settlement
Emails, letters, adjuster notes, voicemails about payment timing/amount
Payment records
Wire confirmations, check copies, payment ledger, discrepancy documentation
Claim file (if obtainable)
Internal adjuster notes, reserve history, approval chain

Reliance & Causation Documents

Contemporaneous notes / diary entries
What you decided NOT to do based on insurer's representations
Communications warning of consequences
Emails/letters to insurer explaining urgency, foreclosure timeline, etc.
Alternative options evidence
Refinance pre-approvals, sale offers, forbearance options you declined
Timeline of decisions
When you learned X, when you decided Y, when deadline Z passed
Lender communications showing they were waiting on insurer funds
Emails/texts between you and lender discussing expected settlement payment; establishes "triangular reliance"
Partial payments made to postpone sale
Payment records + lender acknowledgment; shows mitigation efforts and lender's awareness of incoming funds

Foreclosure / Damages Documents

Lender correspondence
NOD, NTS, acceleration letters, payoff demands
Loan payment history
Payment ledger showing when default began, arrears accumulation
Fee/penalty documentation
Late fees, default interest, trustee fees, attorney fees
Property value evidence
Appraisals, comps, sale price vs. market value analysis
Credit reports
Before/after credit scores, negative entries, remediation costs
Mitigation documentation
What steps you took to minimize harm (or explain why you couldn't)
Trustee's deed / recording confirmation
When deed was recorded matters for SB 1079 finality analysis; obtain from county recorder
Owner-occupant affidavit (if filed by buyer)
Request from trustee; if buyer is marketing as investment property, preserve contradicting evidence (auction listings, "bank owned" marketing)
⚠ Causation is Everything

Litigation firms will scrutinize the "but for" chain: Would the foreclosure have happened anyway? Was there an intervening cause? Did you have realistic alternatives? Build your timeline to answer these questions before they're asked.

Litigation Firm Pitch Memo Guide

What contingency firms want to see when evaluating these cases.

What Firms Look For

Insurance settlement / foreclosure cases are evaluated on six criteria:

  1. Clear standing — Are you the right plaintiff with the right theory?
  2. Written trail — Do you have documented misrepresentations, not just "he said"?
  3. Big, provable damages — Foreclosure-level harm with clear causation
  4. Theory that avoids Moradi-Shalal problems — Contract/fraud, not disguised UIPA
  5. Solvent defendant + coverage — Can you actually collect?
  6. Two-track viability — Do parallel claims against insurer + lender strengthen or complicate the case?

Pitch Memo Structure

Keep it to 2-4 pages. Firms get hundreds of inquiries. Yours needs to be scannable in 60 seconds.

1. Issues Presented (one paragraph)

State the core question: "Whether [Insurer] is liable for [damages type] caused by [specific conduct] after [settlement event]."

2. Key Facts (bullet timeline)

  • Settlement date and terms
  • Post-settlement representations (with dates and sources)
  • Reliance actions/forbearances (what claimant did or didn't do)
  • Foreclosure/harm timeline
  • Damages quantum

3. Claim Viability Analysis (the core)

For each theory:

  • Elements (cited)
  • How facts satisfy elements
  • Key evidence
  • Anticipated defenses + responses

4. Dead Ends Acknowledged

Show you understand what doesn't work. "This is not a third-party UIPA claim under Moradi-Shalal because..."

5. Damages Model

Break down:

  • Settlement proceeds owed
  • Consequential damages (fees, penalties, foreclosure costs)
  • Equity loss (with methodology)
  • Credit remediation costs
  • Potential for punitive damages (fraud cases only, with caveats)

6. Procedural Options

  • 664.6 enforcement (if applicable)
  • New contract/tort action
  • 11580 direct action (if judgment exists)

7. Recommended Next Steps

What documents to subpoena, depositions to take, experts to retain.

⚠ Red Flags That Kill Cases
  • Purely oral representations with no corroboration
  • Release with airtight 1542 waiver + integration + no-reliance clause
  • Speculative equity loss without comps/appraisals
  • Obvious intervening causes (borrower was already in default)
  • Moral outrage about claims handling but no post-settlement misconduct