Plaintiff insured sued defendant insurer for, inter alia, breach of the implied covenant of good faith and fair dealing. The San Mateo County Superior Court, California, sustained the insurer’s demurrer without leave to amend. The insured appealed.
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Overview
The insured alleged that the insurer breached the implied covenant of good faith and fair dealing acting in an unreasonable and untimely manner in responding to its demand for a defense in an underlying action. The court concluded that the insured could not bring separate actions against the insurer for breaching its obligation to defend the insured and for breach of the covenant of good faith and fair dealing handling that claim. The insured’s claim for breach of the covenant of good faith and fair dealing was part of the same primary right asserted in its prior action for breach of the duty to defend. Under its cross-complaint in the underlying action, the insured obtained some recovery for the insurer’s breach of the duty to defend. Additional damages the insured sought to recover arose out of the same failure to assume its defense and should have been pursued in the prior litigation. The insured’s claims for violation of Bus. & Prof. Code, § 17200, and for breach of fiduciary duty reasserted under different theories of liability the same cause of action based on the same primary right. Thus, the demurrer was properly sustained to those causes of action as well.
Outcome
The judgment was affirmed.