Moradi-Shalal v. Fireman’s Fund Insurance Companies
California Supreme Court
758 P.2d 58 (1988)
After Fireman's Fund (defendant) ignored Parvaneh Moradi-Shalal's (plaintiff) repeated settlement requests following a car accident caused by its insured, she sued and settled with the insured, then sued Fireman's Fund itself under Royal Globe Ins. Co. v. Superior Court, which had recognized a private cause of action for unfair insurance settlement practices; the trial court dismissed, reasoning Royal Globe required a final judgment in the first action, and the Court of Appeal reversed. Fireman's Fund petitioned for review, and 17 other states, scholarly critics, and legislative history had by then all criticized or rejected Royal Globe's private-right-of-action holding.
Whether the doctrine of stare decisis permits the reexamination of precedent when subsequent developments indicate an earlier decision was unsound or ripe for reconsideration.