If the case is not settled, some bad law may potentially be established. Bad case law has almost always resulted from cases that should have been settled but were not because someone was stubborn or unthinking. One example is the Supreme Court of California decision in White v. Western Title, 40 Cal. 3d 870, 221 Cal. Rptr. 509 (1985). A dispute over a $20,000 claim resulted in a bad faith suit after litigation between the insurer and the insured had begun by a declaratory relief action. The insurer thought it was improper to admit evidence of its conduct after it was forced into an Adversary position with the insured. The insurer lost at trial and appealed the $20,000 judgment to the Supreme Court of California. As a result, in California, records of settlement negotiations cannot be placed in evidence in any case except if that case is against an insurer and the evidence is used to prove the bad faith of the insurer.
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