Breach: 06. Breach Implied Covenant of Good Faith & Fair Dealing, Tortious

The California Supreme Court has found “a general rule precluding tort recovery for noninsurance contract breach, at least in the absence of violation of ‘an independent duty arising from principles of tort law’ other than the bad faith denial of the existence of, or liability under, the breached contract.” Freeman & Mills, Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 103 (1995).

“A cause of action for tortious breach of the covenant of good faith and fair dealing requires the existence and breach of an enforceable contract as well as an independent tort.” Innovative Business Partnerships, Inc. v. Inland Counties Regional Center, Inc., 194 Cal. App. 4th 623, 631-32 (1988).

“[T]here are at least two separate requirements to establish [tortious] breach of the implied covenant [in the insurance context:

1. benefits due under the policy must have been withheld; and
2. the reason for withholding benefits must have been unreasonable or without proper cause.”

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