*1 possession had gun of Tann’s is not facing many years evi- of incarceration if con- dence of a bad act or crime. it is victed of the robbery two charges then clear that a Getz not limiting Little, pending against instruction him. if anything, required would have been even if Hainey gained would have been if jury also Second, requested assuming had it. juvenile heard that Tann had record. limiting instruction giv- should have been Conclusion en, jury because the could infer that the police investigating were another crime Based on the foregoing, judgments Hainey committed, might have we Superior Court are affirmed. find that the failure to give such an in-
struction did not jeopardize the fairness of
Harney's testimony trial. There was
Hainey used gun to murder Mercer. possibility that Hainey might have another, unidentified,
committed crime was prejudicial not so require as to reversal. DUNLAP, Dunlap, Anne Deborah Finally, Hainey contends that Dunlap, and James Plaintiffs trial court abused its discretion exclud Below, Appellants, ing juvenile evidence of burglary Tann’s Hainey points conviction. out that Tann’s
testimony case, was critical to the State’s STATE FARM FIRE AND CASUALTY argues that he should have been al COMPANY, Below, Defendant to impeach lowed credibility Tann’s Appellee.
evidence of his criminal record. The trial 288,2004. No. agreed court credibility that Tann’s “key,” and admitted evidence of two adult Supreme Court Delaware. felony in Virginia convictions as well as Submitted: Dec. evidence that Tann was facing two sets of July Decided: robbery charges in Delaware. After not juvenile July Corrected: ing that criminal generally records inadmissible, are the trial court decided juvenile
that evidence of Tann’s record was necessary “for a fair determination of
[Hainey’s] guilt or innocence.”7 that the trial court acted .conclude
well within its discretion in excluding juvenile
Tann’s important record. The
facts, impeachment purposes, were that
Tann history had a of committing crimes dishonesty, strong and that he had a testify way pleased
incentive to in a
the State because of pending charges. jury heard evidence of Tann’s adult record,
criminal and knew that he was 609(d).
7. D.R.E. *3 Woods, Jr.,
James J. Esq., of Sullivan Woods, LLC, Wilmington, Delaware, Appellants. Folt, Background (argued), Gary Factual and Procedural Esq. Daniel V. LLP, Lipkin, Esq., Duane W. Morris 7, 1998, Dunlap Anne was a August On Delaware, Wilmington, for Appellee. when in Mark Cardillo’s car he passenger made turn in front of Delaware a left STEELE, Justice, Before Chief (DART) bus. The Corporation Transit HOLLAND, BERGER, JACOBS, and car, striking the pas- with the bus collided RIDGELY, Justices, constituting the court senger severe and door. Anne suffered en banc. injuries partially left her permanent hundreds of She incurred paralyzed. BERGER, Justice. expenses. thousands of dollars medical *4 whether, In appeal, we consider parents In Anne and her August poli- respect with automobile insurance DART, Cardillo, against filed and suit cies, faith and Wood, Monte The Dun- the bus driver. encompasses dealing fair claims other than laps a with State Farm that had in denying delaying pay- for “bad faith” coverage. in The provided million UIM $1 Dunlap, ment of Anne the in- benefits. single had a policy covering car Cardillo’s sured, in catastrophic injuries suffered a $500,000, DART a liability limit of had car She Farm accident. asked State Fire $300,000. single liability limit of Cardillo’s Casualty her Company, underinsured Dunlaps and the other paid (UIM) insurer, agree motorist that it injured limits its parties the deny coverage would if not she settled with light in the serious- immediately almost potential a tortfeasor whose injuries proba- and its ness of the insured’s refused, questionable. Farm State there- liability, liability. DART but ble contested litigate causing Dunlap to her nevertheless, August 2001 following nego- against (unsuccessfully) the tortfeasor tiations, Dunlaps offered to settle with $175,000. lose than Dunlap more sued $175,000. Farm, alleging that it acted bad Superior faith. The Court dismissed her Dunlaps, jeopardizing about worried complaint, prejudice. agree with coverage, their wrote to State Farm UIM allege complaint does not a bad faith they that if settled for seeking assurance insurance, delay claim for or denial of limits, without less than the DART charge since it Farm with does bodily injury “all bonds and exhausting investigate, failure process, available,” they policies would insurance justification. claim without reasonable benefits: not be denied underinsurance however, complaint, allege does facts my opinion, the Cardillo vehicle In Farm suggesting that State breached the vehicle,” an motor as de- “underinsured law], regardless of [by Delaware fined by depriving Dunlap of third DART any with ex- settlement whether recovery any justification party without $300,000 I limit. would DART’s hausts any expo- financial potential and without agreement Farm’s like to have State Accordingly, with in- sure. we remand DART may settle with that the dismissing an structions to enter order $300,000 prejudic- than without less giving Dunlap right prejudice, without course, Of ing UIM claim. can, Dunlaps’ if she replead, accordance DART bus I will not assert discussed this decision. principles attorneys’ “underinsured motor vehicle” forced to incur unless fees and other $800,000 expenses. trial-related we coverage.1 exhaust the State Farm moved dismiss the com- The Dunlaps wrote similar letters the fol- plaint for failure to state a claim. The month, lowing noting that Anne was hemi- motion, judge granted trial holding: plegic already and had incurred more than It was responsibility not [State Farm’s] $500,000 in expenses.2 medical In Decem- negotiations, to sanction the nor was it a ber agree refused to requirement administer advice or the Dunlaps’ proposal. Citing the Dun- with regard exercise influence to [the laps’ obligation applicable to exhaust all Dunlaps’] accept decision the settle- policies tortfeasor before pursuing a UIM litigate. Dunlaps] ment or to [The have claim, responded that it was attempted to shift the onus of an unsuc- any “not authority aware in this [of] state action, cessfully course of construed proposition you’ve for the asked State Farm], strategy, trial onto [State and/or Farm to accept.”3 statutory obligation yet whose had not triggered been at the time of settlement The Dunlaps proceeded against to trial negotiations.4 DART, Wood, and Cardillo. The jury The trial judge statutory reasoned that the *5 solely found liable Cardillo and exonerated exhaustion as requirement, well as the thereafter, DART Shortly and Wood. State terms, identical policy provided a reason- paid Farm Dunlaps the million UIM $1 justification able Farm’s conduct coverage limit. The Dunlaps then filed and that State Farm had neither unrea- Farm, against suit asserting sonably delayed payment nor refused of its had breached “bad Therefore, UIM coverage limits. the Dun- faith” when it refused consent to their laps alleged had not “bad faith” claim in request to settle with DART for less than complaint.5 Dunlaps’ ap- their This is the the DART limits. al- peal. leged that State Farm’s refusal forced them to DART Discussion against despite trial im- probable liability despite and overwhelm- judgments The Court reviews on ing damages unquestionably resulting a motion to dismiss de novo.6 In this result, from the accident. As a the Dun- context, we whether determine the trial $175,000 laps lost DART had been judge erred of law in as matter formulat willing trial, ing precepts.7 to avoid and or applying legal were Dismissal Woods, Jr., Shalk, Esq., Esq., Letter from James J. 3. Letter from Colin M. to James Jr., 18, 18, (Dec. 2001), 2001), Esq. Appellants’ J. Woods (Sept. citing Maude I. Niedzielski Appendix, 3902(b)(2) A-000008-9. removed), (emphasis § 18 Del. C. Appellants' Appendix, A-000002. Co., Dunlap Fire & Cas. 2004 1427001, *6, Del.Super. WL at LEXIS Woods, Jr., Esq., See Letter from James J. 188, at *24. 22, (Oct. 2001) (ending: Maude I. Niedzielski *8-9, 188, sincerely hope Del.Super. "I that State Farm will 'take Id. at LEXIS at high proposed not obstruct *32-33. road’ and settlements.”), DART-Dunlap Appellants’ Ap- See, e.g., VLIWTech. LLCv. Hewlett-Packard A-000003-4; pendix, Letter from James J. Woods, Jr., Shalk, Esq., Esq. to Colin M. (Nov. 13, 2001), Appellants’ Appendix, A- Parker, (Del. 7. Gadow v. A.2d 000005-6. 2005). effect, coverage in but injury liability rea- only appears if “it is warranted liability cov- bodily injury certainty” asserted the limits sonable that the claims all bonds and insurance plaintiff erage to relief under under would not entitle time of the any provable policies applicable set of facts.8 But we need allegations, pro- than limits “blindly accept as true all total less accident nor must draw all inferences motorist cov- [we] vided the uninsured they favor are [plaintiffs] them unless .... erage reasonable inferences.”9 (3)The obligat- insurer shall not under this any payment make ed to
Before we consider after limits liabil- until dealing, address fair we bodily injury bonds and ity under all two the trial issues that controlled in- policies to the meaning statu- insurance available court’s decision—the of the accident have tory the ele- sured at time requirement, exhaustion payment of insurance exhausted settle- ments of a so-called bad faith been or judgments.... claim. ments § overriding purpose of 3902 is Requirement A. The Exhaustion compensate innocent drivers.”11 “fully This has considered the correct Court construing ambiguous portions when application construction Delaware’s statute, adopted in this Court has (UIM) motorist uninsured/undei'insured terpretations the accident that maximize statute, § many 18 Del. C. times.10 compensat opportunity fully to be victim’s provides, part: The statute in relevant full Notwithstanding goal com ed. (b) Every insurer shall offer has in limited the pensation, Court option purchase insured the additional *6 recovery in circumstances where sured’s injury coverage personal up for or death statutory language clearly mandated $100,000 per to a limit of person and Thus, for an insured example, that result. $300,000 per .... accident Such addi- policies to wheth may not stack determine tional insurance shall underin- include meets er tortfeasor’s vehicle bodily injury liability coverage. sured 3902(b)(2) § definition of an underinsured (1) Acceptance of such additional motor vehicle. coverage operate shall to amend the policy’s pay uninsured applied rules The trial court settled injury bodily damage that the insured statutory properly of con construction ... legally entitled recover from [is] provision, exhaustion cluded the driver an underinsured motor 3902(b)(3), unambiguous. § is clear and vehicle. plain provision is that meaning
(2)
obligated
pay
not
An
vehicle UIM carriers are
underinsured motor
until after the insureds ex-
bodily
their insureds
may
is one for which there
Beran,
See,
(Del. 1997);
Sutch
688
McMullin v.
e.g.,
765 A.2d
A.2d 1374
Co.,
(Del.2000).
(Del.
Mut. Auto. Ins.
916
A.2d 17
Farm
672
Ins.
1996);
Hurst v. Nationwide Mut.
Panic,
(Del.
9. White v.
(Del.1995);
Co. v.
Home Ins.
Maldo
A.2d 10
2001)
omitted).
(citation
nado,
A.2d
Ins.Co.,
See,
Deptula
e.g.:
v. Horace Mann
Co., Mann
11.Deptula v. Horace
Ins.
A.2d
(Del.2004);
Ins. Co.
Colonial
B. Bad Faith Refusal to
justification”
which constituted “reasonable
Moreover,
In Tackett v. State Farm
& Cas.
a
Fire
as matter of law.
and in
Co.,13
addition,
Ins.
this
held
first-party
Court
that a
Dunlaps
State Farm asked the
against
an
bad faith deni- provide
authority supporting
Delaware
delay
payments
al or
in claim
sounds
position,
their
and the
did not
implied
contract and arises from the
cove-
concludes,
reply. Accordingly, State Farm
of good
nant
faith and fair dealing.14
there are no facts
could establish that
Tackett defined the elements of a bad faith
unreasonably.
it acted
insurance claim:
that,
agree
under settled Delaware
an
investigate
Where
insurer fails to
or
law,
Dunlaps’ complaint
does
state
process a claim
delays
or
payment
a
for a
cause
action
bad faith refusal to
faith, it
bad
breach of the
pay
complaint
insurance claim because the
faith
obligations
dealing
and fair
unjustified
allege
does not
failure or
underlying
all
contractual
obli- delay in
processing
payment
of an
faith,
gations
.... A lack of
or the
question
insurance claim. The
whether
faith,
presence of bad
is actionable
to cooperate,
State Farm’s refusal
under
where the
can
insured
show that
case,
facts of
could be actionable
insurer’s denial
“clearly
of benefits was
a
as
breach of the
any,
justification.”15
without
reasonable
and fair
on
different
Dunlaps’ complaint
not fit
does
find, for the
next
basis. We
reasons
set
rubric,
within
neatly
the above-described
forth, that it
be.
could
as it
not allege
does
that State Farm failed
Implied
C. The Insurer’s
Covenant
investigate
claim.
What
Dealing
Good Faith and Fair
*7
complaint does
of
accuse State Farm is a
parties
all
cooperate,
requirement
“bad faith” refusal to
the
that
which
“good
trial court treated
a bad faith “refusal
to an insurance
act in
faith”
as
contract
pay”
spans
to
claim. It
in that
is
context
we
toward one another
at least three
briefly
thought.16 By
turn
to
Farm’s
of
legal
contentions.
centuries American
any
point
changes
12.The
out that
are
this construc-
to the UIM statute
deemed
requires
"pursue
necessary,
Assembly
tion
to
insureds
claims of
it is the General
liability against
parties,
thereby
changes.
weak
third
effect
must
those
fostering marginal
costly litigation....”
and
Wheeler,
Acc.
v.
General
Ins. Co.
221 Conn.
13.
441
Exist-
gaps
provisions.21
in the contract’s
century,
courts and commen-
twentieth
doctrine, steadily
refer-
control, however,
tators clarified
such
ing
terms
contract
ring
newly-coined “implied
covenant
cannot be used
implied good
faith
Despite
good
dealing.”17
of
or to
parties’ bargain,22
circumvent
evolution,
no
“good
faith” has
term
duty..
.unattached
“free-floating
a
create
only
meaning, serving
set
to “exclude a
underlying
legal
to the
document.”23
range
heterogeneous forms of bad
wide
of
generally
one
cannot base a
“best under-
faith.”18
is
con-
of the
covenant on
breach
way
of
in the
implying
stood as
terms
by
agree-
duct authorized
the terms
ana-
agreement,”19
employed
whether
areas
Recognized many
of
ment.24
lyze
developments20 or to fill
unanticipated
Corp.,
Div. v.
purest
good
Commercial Fin.
rules of
faith is exacted from all
Fin.
Glenfed
163,
insurance.”);
Corp.,
N.J.Super.
Pine
276
647 A.2d
parties to a contract of
Penick
30,
(1994) (citations omitted)
Vanuxem,
1800) ("In
852,
("When
(Pa.
v.
858
3 Yeates
33
silent,
good
they
principles
indemnity;
is
of
faith
surances are contracts of
contract
gap.").
...
be
and
fill the
should
entered into
fulfilled with
Barnitz,
faith.”);
purest good
Eichelberger v.
1
(Pa.1793) ("In
Yeates 307
of insur
Jersey
Supply
North
Water
Rudbart v.
Dist.
ance,
344,
681,
pure good
Comm’n,
is re
the most
faith
where
692
N.J.
127
settled,
quired,
denied,
871,
(1992),
that the insured need not
S.Ct.
506 U.S.
113
cert.
ought
203,
underwriter
mention what
Hall Reso
121
145. See also
v.
L.Ed.2d
Low,
know.”).
Seton,
75,
(5th
Co.
Maitland & v.
1
Corp.,
Cir.
Trust
F.2d
79
lution
958
Cf.
1,
(N.Y.1799)("[T]he
("An
Johns.
6
of
1992)
Cas.
reason
agreement
parties
made
facts,
requiring
the rule
due disclosure of all
in the contract itself cannot
and embodied
knowledge
party,
of
within
either
implicit
good
faith
varied
prevent
encourage
fraud
Corp.
dealing.”), quoting
v.
and fair
Exxon
faith_”).
944,
Co.,
947
678 S.W.2d
Atlantic Richfield
(Tex.1984);
v.
Terry
Plumbing
A.
Inc.
Lambert
See,
Bank,
976,
(8th
e.g.,
Thompson
Blish v.
Automatic
934 F.2d
983
Western Sec.
(Del.1948);
Corp.,
1991)
Wood
("Acting according
express
Arms
law,25
implied
covenant attaches
ev-
clear from the
writing
the con-
contract,26
ery
including contracts
insur-
tracting parties
agreed
“would have
ance.27
proscribe
later complained
the act
of ...
they
had
thought
negotiate
respect
with
general
Stated in its most
may
to that matter”
a party invoke the
terms,
requires
“a
protections.32
covenant’s
party in a contractual
relationship
re
arbitrary
frain from
con
unreasonable
earlier,
As
noted
cove
preventing
duct which has the
effect
nant of
faith and fair dealing doctrine
party
other
to the
from receiving
contract
But,
applies
insurance contracts.
Thus,
parties
the fruits”
the bargain.28
context,
(and
the case law frequently
are liable
breaching
covenant when
unfortunately) equates
lack
their conduct frustrates the “overarching
faith,33
presence
with the
of bad
and the
purpose” of
the contract
advan
taking
parameters
an
action for “bad faith”
tage
position
of their
to control implemen
pay
refusal to
proceeds
insurance
are well
agreement’s
tation of the
terms.29 This
case,
settled.34
State Farm’s
recognized
Court has
“the occasional ne
refusal to
cooperate
did
cessity”
implying
contract
to en
terms
faith,
subject
liability
not
it to
for bad
parties’
sure the
expectations”
“reasonable
are fulfilled.30
because its conduct did
quasi-reformation,
not involve the
This
however,
failure or
“should
refusal
an insurance
[a]
rare and fact-
exercise,
Moreover,
governed
intensive”
claim.
solely
“is
even if
this were
compelling
case,
sues of
fairness.”31 Only when
failure-to-pay
deemed
be a
independent duty
an
Solutions,
enforce
divorced
29.
Breakaway
Morgan
Inc. v.
Stan-
contract.”)
1949300,
specific
*12,
Co.,
from
clauses of the
2004 WL
at
ley
2004
&
omitted).
125,
(quotation marks
Del. Ch. LEXIS
at *49-50.
See,
443;
See,
25.
Pressman,
e.g.,
30.
Equities
Morgan
Desert
679 A.2d at
e.g.,
Inc. v.
Cin-
II LP,
A.2d
Stanley Leveraged Equity Fund
624
Pshp.
cinnati SMSA Ltd.
v. Cincinatti Bell
1199,
(Del.1993) (limited
989,
Co.,
(Del.
n.
partner
1208
16
708 A.2d
Sys.
992
Cellular
1998) ("Delaware
Inc.,
ships); Merrill v.
Supreme
jurispru-
606
Court
Crothall-American
96,
(Del.1992) (employment
general
A.2d
101
developing along
ap-
con
dence is
785,
tracts);
proach
implying obligations
542 A.2d
787
based on the
Cogan,
Simons v.
(Del.Ch.1987)
indenture);
(corporate-bond
enterprise.”).
covenant ...
is a cautious
1050,
Co.,
A.2d
490
1054-55
Gilbert v. El Paso
(Del.Ch.1984) (tender offer); Jedwab v. MGM
992-93; Wilming-
Cincinnati,
A.2d
708
at
584,
Inc.,
(Del.Ch.
509 A.2d
596
Grand
Keith,
Hotels
by
case,
buying insurance.”40 In that
coverage
the
that UIM
is secondary,
excess,
an investigative report
insurer withheld
payable
becomes
after there
(i)
that its insured needed to
a claim
assert
is a
that:
a third
determination
party
tortfeasor,
against the
by
injuries
who was
insured
was liable for the
sustained
the
See,
(ii)
tortfeasor(s)
insured,
the same carrier.
also: Union Bank-
vehicles were
Shelton,
(iii)
278,
underinsured,
ers Ins. Co. v.
889 S.W.2d
and
insured has re-
(Tex.1994) (holding that insurer
on
primary
breaches
covered
all available
liability
implied
good
covenant of
policies.
faith and fair
Often the
require-
exhaustion
dealing when it cancels
protect
insured’s health ment
having
will
the insurer from
basis.)
policy without reasonable
engage
expensive litigation
deter-
mine,
example,
for
who is responsible for
Delaware, likewise, recognizes
the accident or the extent of the insured’s
good
the covenant 'of
faith and fair
circumstances,
In
damages.
such
it would
dealing implied in all contracts compre
expect
be reasonable to
the insurer to
hends duties
duty
other
than the
provision,
invoke the
exhaustion
and
process
promptly
claims. Our
doing
face poten-
so
insurer would not
have
courts
held that
the covenant also
breaching
implied
tial
cove-
requires an
notify
insurer to
its insured of
good
dealing.
nant of
policy’s
if
period
limitations
that time
not,
all, require
covenant does
after
limit is shorter than
applicable
exposure
insurer to risk financial
in order
statute of
Similarly,
limitations.41
an in
to assist the insured.
may
deny
surer
coverage based on an
give
insured’s failure
notice
a claim
Nonetheless, although “the ob
unless
insurer
that it
establishes
was
ligation
require
faith does not
prejudiced
sum,
by the lack of
In
notice.42
possi
reheve the insured of all
“
faith ‘is the
ble
that may
harm
come from his choice of
obligation
preserve
spirit
limits,
it
obligate
does
the insurer
letter,
bargain rather than the
the adher
unequal
not to take
advantage
posi
ence
substance
rather
than
tions in order
secondary
to become a
requires
form....’”43
It
just
more than
Here,
injury
source of
to the insured.”45
compliance
literal
policy provi
inferable,
apparent,
was
if not
from the
sions
and statutes. The
covenant pleaded facts that State Farm faced no
dealing requires
and fair
possible
exposure
financial
prejudice
if
a way
the insurer act in
that honors the
it agreed to
require
waive the exhaustion
expectations.44
insured’s reasonable
Dunlap
ment
to enable
to settle with
$125,000
DART for
below policy
limits.
D. State Farm’s Conduct as Breach
informed,
easily
State Farm was
could
Implied
Covenant
verify,
responsible
that Anne
not at
all
provision
severe,
The exhaustion
the accident
per
her
statute,
policy,
injuries
expresses
Farm’s
like the
manent
far
would
exceed the total
Illinois,
(1986).
v. Int’l.
Co.
Ariz.
726 P.2d
Pierce
Ins.
671 A.2d
3A Corbin on Contracts
(Quoting
at 1366
added).
§
(1994))(emphasis
654A
Family Casualty
41. Woodward v. Farm
Ins.
(Del.2002).
Ibid.
Johnson,
42. State Farm Mut. Auto. Ins.
v.Co.
Rawlings Apodaca,
445 complaint of amended allegations whatever policy limits. wheth- of all available (if nothing the full file. Dunlaps any) they er the received DART, $300,000 State limits from have had to the Conclusion
Farm still would
$1
It thus
policy.
limit of its UIM
million
of
foregoing,
judgment
on
the
Based
the
by refusing
agree
appears arguable that
part
in
Superior Court is affirmed
settlement,
$175,000
to the
DART
remanded
matter is
part.
in
This
reversed
advancing
of its
any
Farm was not
interest
with this
in accordance
further action
own,
secondary
a
source
and had become
is not retained.
Jurisdiction
opinion.
Dunlaps.
injury
of
to the
RIDGELY, Justice,
in
concurring
part,
may
Dunlaps’
Because the
claim
dissenting
part.
duty
a breach of State Farm’s
implicate
good
of
faith
implied
covenant
under
in,
and, therefore, concur
agree
I
with
dealing,
of their
and fair
the dismissal
majority’s
Superior
that the
conclusion
and the case
complaint should be reversed
Dunlaps’
correctly dismissed
Court
Dunlaps
be remanded
afford an
should
Farm under
against
claim
bad faith
a claim
opportunity
plead
founded
Farm, Fire
Cas. Ins.
v. State
&
Tackett
may
on the
Just as an insurer
covenant.
however, ulti-
majority’s opinion,
Co.48
deny
rely
provision
not
on a notice
for the
mately
a cause
action
describes
coverage except
prejudiced
where it was
good
breach
notice,46so, too,
by the insured’s lack of
an
semantically
dealing that
fair
faith and
may
rely
not
on
exhaustion
substantively
different
different but
provision
preju
absent a
risk of
realistic
claim,
the dismiss-
from a Tackett
reverses
circumstances,
Dunlaps
In
dice.
these
prejudice,”
extent it
“with
al
may possibly have a claim that
Dunlaps
to allow the
remands
case
knew,
known,
that the im
should have
disagree
I
complaint.
amend their
plied
faith and fair deal
covenant
im-
because the
and remand
the reversal
prevent
ing required
arbitrarily
that it not
play
not come into
covenant does
plied
obtaining
the fullest
own insured
before us.
undisputed
facts
given
injuries
possible recovery for
where
her
obli-
“implying
This
has held that
Court
State Farm faced no realistic prejudice.47
on the covenant
gations based
Nothing
Opinion
in this
should be read as
enterprise.”49
a
fair
is cautious
any
claim for breach of
“pre-approval”
have said
deference
that,
grounds for reforma-
absent
principle
dealing.
Dunlaps
are
Whether or not
tion,
contracts.50
not rewrite
courts should
legally cognizable
plead
able to
line here is that
specific
The bottom
light
must be determined
Johnson,
Ins.
v.
A.2d 254
46. State Farm Mut. Auto.
Co.
48. 653
(Del. 1974).
In
we held
a first-party
While the
are
that
Dunlaps
claiming
against
claim
an
bad faith deni-
Farm
to investigate, process
failed
or delay
claim,
al
in
payments
in
delay payment
analysis
sounds
on a
contract,
recog-
rather
than tort.51
alleged
may
We
under Tackett of the
breach
contracts,
nized
first-party
insurance
premise
be made on the
that the Tackett
contract,
any
like
other
merely
include an
is
implied
representative
list
and not ex-
good
covenant of
faith and fair
Dunlaps
have
dealing.52
haustive-.58
implied
held that
We
agree
show that State Farm’s
refusal
faith and fair
is
dealing
breached when “an
poli-
settlement with DART for less than
investigate
insurer fails to
or process
cy
clearly
any
jus-
limits
lacked
reasonable
delays
payment
case,
claim or
In
bad
tification.
Dunlaps
own
on
went
to state that
agreement
prevents
“[a]
them
faith....”53
faith,
lack of good
presence
or the
doing
of bad
so.
Farm
was reason-
faith, is
ably justified
actionable where the
can
in refusing
Dunlaps’
insured
re-
show
subject
insurer’s denial of
quest
benefits
because the
was
issue
‘clearly
any
justifi-
without
reasonable
expressly covered
the contract. The
”54
cation.’
up”
DART
had to be
“used
order
Dunlaps
for the
to have a UIM claim.
undisputed
The
facts of this case show
was asked to consent to a
implied
Tackett addresses the
covenant
settlement for less than
limits
faith and fair
con-
without prejudice
Dunlaps’
to the
UIM
of an
text
insurance contract. The case
provides
The statute that
upon
does so with a
focus
whether there
claim.55
UIM insurance
any
justification
relieves State Farm of
a reasonable
for the insurer’s
obligation
“until
of position.
after
limits
Reasonable conduct is at
Tackett,
(2005)
3902(b)(3)
§
dealing. “ relationship ‘a in a party contractual arbitrary or unreasonable refrain from preventing Delaware, the effect of
conduct which has Plaintiff STATE of Below, the contract from re- party Appellees. other Here, bargain.”59 fruits’ of the ceiving the *13 103,2004. No. bargain for was uninsured/underin- coverage. fruit sured motorist Supreme Court of Delaware. is under the terms bargain payment April no other insurance Submitted: UIM when Dunlaps, settlement available to July Decided: DART. that the cove- We have stressed dealing faith and fair exists to
nant of expecta- “parties’ reasonable
protect the statute and insurance tions.” Under here, be no issue there could expectation that
reasonable provide
would uninsured motorist was still insured. To a motorist that par- contrary, expectations of DART’s policy
ties were that unless was judgment
exhausted settlement claim. should
there could no UIM bargained expectation.
honor that liability
majority’s DART’s point that
“questionable” makes no difference. Dis-
putes expected over are to be
a trial to resolve them. Because exists
undisputed Dunlaps request nature
shows that come into does not
play, my opinion remand complaint is an amendment to the
allow respectfully I dissent
unwarranted. part and remand.
the decision reverse Cincinnati, at 992. Wilgus v. 708 A.2d Majority Opinion at-(quoting (Del.Ch. Pond Inv. Salt 1985)).