Moradi-Shalal Does Not Preclude Unfair Competition Law (UCL) Claims.

The California Supreme Court clarified one of the perceived limitations resulting from its holding in Moradi-Shalal v. Fireman’s Fund (1988) 46 Cal.3d 287, [758 P.2d 58, 250 Cal.Rptr. 116]. The case addresses whether insurance practices that violate the Unfair Insurance Practices Act [UIPA; Insurance Code section 790 et seq.] can support an Unfair Competition Law [UCL; Business & Professions Code section 17200 et seq.] action. The plaintiff alleges causes of action for false advertising and insurance bad faith, and the Supreme Court held:  “We hold that Moradi-Shalal does not preclude first party UCL actions based on grounds independent from section 790.03, even when the insurer’s conduct also violates section 790.03.2 We have made it clear that while a plaintiff may not use the UCL to “plead around” an absolute bar to relief, the UIPA does not immunize insurers from UCL liability for conduct that violates other laws in addition to the UIPA.” Zhang v. Sup. Ct. (California Capital Insurance Company) (Sup. Ct.; August 1, 2013) 57 Cal.4th 364, [304 P.3d 163, 159 Cal.Rptr.3d 672].