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:
- benefits due under the policy must have been withheld; and
- the reason for withholding benefits must have been unreasonable or without proper cause.”
Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136, 1144 (1990).
“Generally, outside the insurance context, ‘a tortious breach of contract . . . may be found when (1) the breach is accompanied by a traditional common law tort, such as fraud or conversion; (2) the means used to breach the contract are tortious, involving deceit or undue coercion or; (3) one party intentionally breaches the contract intending or knowing that such a breach will cause severe, unmitigable harm in the form of mental anguish, personal hardship, or substantial consequential damages.’” Erlich v. Menezes, 21 Cal. 4th 543, 553-54 (1999).
“In addition, ‘[g]enerally, no cause of action for the tortious breach of the implied covenant of “fiduciary characteristics.”’” Vegas Diamond Props., LLC v. Wiggins, No. 10cv1205-WQH-BGS, 2012 U.S. Dist. LEXIS 54671, at *24 (S.D. Cal. Apr. 18, 2012).
CALIFORNIA STATE COURTS
Supreme Court of California: Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 989-990 (2004); Erlich v. Menezes, 21 Cal. 4th 543, 553-54 (1999); Freeman & Mills, Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 103 (1995).
California 1st District: Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group, 143 Cal. App. 4th 1036, 1043 (2006); Kruse v. Bank of America, 202 Cal.App.3d 38, 57 (1988).
California 2d District: Benavides v. State Farm General Ins. Co., 136 Cal. App. 4th 1241, 1251-52 (2005).
California 3d District: Tilbury Constructors, Inc. v. State Comp. Ins. Fund, 137 Cal. App. 4th 466, 475 (2006).
California 4th District: Innovative Business Partnerships, Inc. v. Inland Counties Regional Center, Inc., 194 Cal. App. 4th 623, 631-32 (1988), rev. den., 2011 Cal. LEXIS 7359 (Cal. July 13, 2011).
California 5th District: Harris v. Atlantic Richfield Co., 14 Cal. App. 4th 70. 78 (1993).
California 6th District: None.
CALIFORNIA FEDERAL COURTS
United States Court of Appeal for the 9th Circuit: Ajir v. Exxon Corp., Nos. 97-17032 & 97-17134, 1999 U.S. App. LEXIS 11046, at *25-27 (9th Cir. May 26, 1999).
Central District: Aqua Connect v. Code Rebel, LLC, No. CV 11-05764 RSWL (MANx), 2013 U.S. Dist. LEXIS 103080, at *10-11 (C.D. Cal. July 23, 2013).
Eastern District: Valenzuela v. American Home Mortg. Inv. Trust 2005-2, No. CV-F-08-1179 OWW/SMS, 2009 U.S. Dist. LEXIS 31111, at *70-71 (E.D. Cal. Mar. 30, 2009).
Northern District: Wine Bottle Recycling, LLC v. Niagara Sys. LLC, No. 12-1924 SC, 2013 U.S. Dist. LEXIS 138896, at *9-10 (N.D. Cal. Sept. 26, 2013).
Southern District: Vegas Diamond Props., LLC v. Wiggins, No. 10cv1205-WQH-BGS, 2012 U.S. Dist. LEXIS 54671, at *24 (S.D. Cal. Apr. 18, 2012).