Willis v. Swain, 304 P.3d 619

Accident occurred February 10, 1999 involving an uninsured vehicle; Petitioner had a DHS-issued JUP certificate policy (no UM) and assignment of her JUP claim was made to Respondent.
JUP assigns claims to servicing carriers who then have rights and obligations as if they issued a motor vehicle policy under HRS § 431:10C-403.
Respondent denied coverage December 28, 1999 on the ground Petitioner’s certificate policy lacked UM coverage.
Willis I (2006) and Willis II (2006) involved prior rulings on benefits and fees under the assigned claims program; later decisions remanded for benefits.
The circuit court granted summary judgment on bad faith claims, relying on Simmons and treating no contract as fatal to bad faith; ICA affirmed, focusing on lack of underlying contract.
The Supreme Court vacated and remanded, holding that the assigned-claims relationship implicates a duty of good faith under the JUP and that bad faith is a question of fact, with the case remanded for further proceedings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the assignee owes a duty of good faith under JUP §431:10C-403	Willis argues the assignee has good-faith duties like an insurer	First argues no such duty absent contract/open question of law	Yes, duty of good faith applies to assigned claims
Whether bad faith claims require a contract	Petitioner can sue for bad faith despite no contract	Simmons requires contract for bad faith against third parties	Bad faith claim is viable without an underlying contract under the JUP statutory scheme
Whether statutory framework equates assigned claims with policies for bad-faith purposes	Statute treats assignee as if it issued a policy	Statutes distinguish assigned claims from certificate policies	Statutory language supports treating assigned claims as subject to good-faith duties and potential bad-faith liability
Whether the issue is a policy question for the legislature	Court should recognize bad faith for assigned claims now	Policy questions should be left to legislature	Court notes implications but proceeds with statutory interpretation; remands for factual development on bad faith
Scope of evidence needed to prove bad faith on remand	Petitioner’s expert evidence shows bad faith	Open questions of law; limited by prior findings	Factual questions remain for trier of fact; summary judgment inappropriate

Best Place, Inc. v. Penn America Insurance Co., 82 Hawai'i 120 (Haw. 1996) (implied good faith duty independent of contract; bad faith is a separate tort)
Simmons v. Puu, 105 Hawai'i 112 (Haw. 2004) (assignment of insured's rights required for third-party bad faith claim)
Enoka v. AIG Hawaii Insurance Co., Inc., 109 Hawai'i 537 (Haw. 2006) (bad faith claim allowed without coverage under policy; conduct of insurer controls)
Christiansen v. First Insurance Co. of Hawai'i, Ltd., 88 Hawai'i 442 (App. 1998) (bad faith origins not solely contract-based; analyzed in context of policy)
Willis v. Swain, 112 Hawai'i 184 (Haw. 2006) (Willis I—initial assignment-benefits issues; Willis II—fees; Willis III—appeal scope)
Willis v. Swain, 113 Hawai'i 246 (Haw. 2006) (Willis II—no attorneys' fees; costs awarded; scope of assigned claims)
Willis v. Swain, 126 Hawai'i 312 (App. 2012) (Willis III—ICA decision on bad faith and assigned claims)