Beck v. Farmers Insurance Exchange
Utah Supreme Court
701 P.2d 795 (1985)
Beck (plaintiff) was hit by an uninsured, hit-and-run driver and sought uninsured-motorist benefits from his own insurer, Farmers Insurance Exchange (defendant). Farmers paid Beck's medical expenses but denied the uninsured-motorist claim; when Beck offered to settle for the $20,000 policy limit, Farmers rejected the offer without explanation. Ten months after the accident, and facing financial pressure from mounting expenses, Beck accepted a reduced $15,000 settlement mid-litigation. Beck sued Farmers for breach of contract, bad-faith failure to investigate or settle, and intentional infliction of emotional distress. A former insurance adjuster's unrebutted affidavit stated a prudent insurer would have valued the claim at up to $40,000, calling Farmers's delay bad faith. The trial court entered judgment for Farmers, and Beck appealed.
Whether, in a first-party relationship between an insurer and its insured, a breach of the parties' duties and obligations gives rise only to a contract action rather than a tort action.