Egan v. Mutual of Omaha Insurance Company
Supreme Court of California
620 P.2d 141 (1979)
Egan (plaintiff) held disability insurance from Mutual of Omaha (defendant) and filed a claim after becoming unable to work; Mutual's claims manager deemed the claim fraudulent and denied it without ordering any medical evaluation, despite Egan's offer to be examined by a doctor of Mutual's own choosing. Egan sued for breach of the implied covenant of good faith and fair dealing; the trial court found Mutual had not adequately investigated the claim before denying it, and awarded both compensatory and punitive damages.
Whether an insurance company that acts in bad faith in denying an insurance claim can be held liable under tort law for breach of the implied covenant of good faith and fair dealing.