UCL class action decision
Last Friday, the Court of Appeal ordered publication of Newell v. State Farm General Ins. Co., ___ Cal.App.4th ___ (April 26, 2004). The case alleged that the defendant insurance companies mishandled various homeowners' insurance claims stemming from the Northridge earthquake, and claimed breach of contract, insurance bad faith, and UCL violations. The trial court sustained the defendants' demurrer to the complaint's class action allegations, holding that common questions did not predominate, and the Court of Appeal affirmed. Respecting the UCL claim, the court observed: "The unfair business practices cause of action is premised on the improper denial of policy benefits; and plaintiffs ultimately seek restitution for the amount of benefits State Farm and Farmers failed to pay. Thus, the individualized assessments necessary for the breach of contract and bad faith causes of action also are necessary to establish liability for unfair competition."

That conclusion is highly fact-specific, in my view. Caselaw makes clear that UCL claims are legally distict from other claims, with unique elements and remedies, so they will rarely track other causes of action so closely as they apparently did in this case. A complaint-drafting lesson can be learned here: find a way to differentiate your UCL claim from your other causes of action, and be sure the complaint makes the distinction plain.
- posted by Kim Kralowec @ 7:32 AM