Breach of Duty of Good Faith is Different from Bad Faith in Utah

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tate Farm Fire and Casualty Company (State Farm) moved the USDC to dismiss Genevieve Healy-Petrik’s third cause of action for “bad faith.” Ms. Healy-Petrik, who has an insurance policy from State Farm, claimed that State Farm’s actions and inactions concerning the insurance policy constitute bad faith. However, in Genevieve Healy-Petrik, an individual v. State Farm, Case No. 2:20-cv-611, USDC Utah, Central Division (October 26, 2020) the USDC noted that in Utah does not recognize tort causes of action in a first-party relationship between an insurer and its insured.

ZALMA OPINION

This is a victory in name only. The lawsuit was cleaned up by removing a duplicative cause of action. State Farm must still defend the action for breach of the covenant of good faith. It is important that Utah refuses to accept the tort of bad faith and finds the action for breach of the covenant of good faith and fair dealing is a contract claim. The state is rare in that regard and, if I had my ‘druthers it would be the law everywhere.