NO BAD FAITH WHERE EXCLUSION APPLIES AND NO COVERAGE DUE (Western District)
Plaintiff loaned her car to her boyfriend. Unknown to her, the boyfriend’s license was suspended. He got into an accident, and the carrier denied coverage based on an exclusion for drivers with suspended licenses. Plaintiff sued for bad faith and breach of contract. The parties filed cross motions for summary judgment. The court granted the insurer’s motion.
The dispute centered on the policy exclusion. The court analyzed the exclusion in detail based on the policy language and facts of the case, finding the exclusion applied. The court rejected the insured’s piecemeal policy reading as contrary to governing standards requiring the policy to be viewed “in its entirety, giving effect to all of its provisions,” with the policy’s words “construed in their natural, plain, and ordinary sense”.
Thus, the insured’s “attempts to read ambiguity into [policy] sections where none exist  cannot demonstrate bad faith or breach of contract as a matter of law.”