The genuine-dispute doctrine after Wilson v. 21st Century Ins. Co.
The impact of Wilson
Wilson’s principal impact is felt in two ways. First, the Court’s powerful statement and reliance on the insured’s duty to conduct a fair, thorough investigation is significant. While technically, the Court merely restated the law on this point, it did so in a way that not only reaffirmed the insurer’s obligation to investigate fully before denying a claim, it strengthened it.
Second, the Court refocused the inquiry in summary-judgment proceedings. Before Wilson, many courts would determine that there was a genuine dispute if the insurer relied on experts, or if there simply was a difference of opinion between the carrier and the policyholder. In the absence of affirmative proof that the carrier’s position was held in bad faith, the courts would find that the existence of the dispute was sufficient to trigger application of the doctrine. This was why the genuine-issue defense had become so powerful and so frequently asserted. Carriers and claimants seldom are in complete agreement about all aspects of a claim. The genuine-dispute doctrine allowed carriers to avoid bad-faith liability simply by disagreeing with the insured in some fashion.
This no longer works after Wilson, because the issue is now whether a jury could find that plaintiff’s view of the claim was correct. The mere existence of a dispute is no longer sufficient; to obtain summary judgment, the record must be sufficient to allow the trial court to find that no reasonable jury could accept the view of the plaintiff or the plaintiff’s experts.
Finally, Wilson makes clear that the question of whether there is a genuine dispute is a legal question for the trial court to resolve on summary judgment, not a factual issue to be decided by the jury. In essence, Wilson confirms that the genuine-issue doctrine was, and is, no more than a shorthand way for a court to conclude that the insurer’s conduct was reasonable as a matter of law. Once the court decides that there is a triable issue of fact about whether the insurer acted reasonably, the issue of the insurer’s conduct must be put to the jury to decide. The jury does not, however, decide whether or not a dispute was genuine; it decides whether the insurer’s conduct was reasonable.