Учебный год 22-23 / Binding Promises - The Late 20th-Century Reformation of Contract Law-1

Rules in Unconscionability and Related Doctrines,” 60 U. Chi. L. Rev. 1, 27–29 (1993).

97.Jean F. Rydstrom, Annotation, “Application of ‘Clearly Erroneous’ Test of Rule 52(a) of Federal Rules of Civil Procedure to Trial Court’s Findings of Fact Based on Documentary Evidence,” 11 A.L.R. Fed 212 (1972).

98.Restatement (Second) of Contracts § 212(2) (1981).

99.Keeton & Widiss, supra note 6, at 643–45.

Chapter 4

1.The reader should not confuse “relational torts” with certain other uses of “relational.” Ian R. Macneil uses “relational contracts” to mean contracts that define the parties’ long-term working relationships with each other. See, e.g., Ian R. Macneil, “Relational Contract: What We Do and Do Not Know,” 1985 Wis. L. Rev. 483 (1985). Leon Green originated the phrase, “torts to relational interests,” to describe torts that harmed interpersonal relationships, and torts scholars still use it for this purpose. See, e.g., Leon Green, “Relational Interests,” 29 Ill. L. Rev. 460 (1934), 29 Ill. L. Rev. 1041 (1935), 30 Ill. L. Rev. 1 (1935), 30 Ill. L. Rev. 314 (1935), 31 Ill. L. Rev. 35 (1936); Nancy Levit, “Ethereal Torts,” 61 Geo. Wash. L. Rev. 136, 146–50 (1992).

2.E. Allan Farnsworth, Contracts § 12.18 (2d ed. 1990).

3.Id. §§ 8.3, 8.5–.7, 8.22.

4.Id. §§ 8.15–.18 (pointing out that the doctrine of substantial performance works to the same effect).

5.James J. White & Robert S. Summers, Uniform Commercial Code § 8-4 (3d ed. 1988) (discussing U.C.C. § 2-608).

6.Hibschman Pontiac, Inc. v. Batchelor, 362 N.E.2d 845 (Ind. 1977).

7.Farnsworth, supra note 2, § 8.16.

8.Henningsen v. Bloomfield Motors, Inc., 161 A.2d 69 (N.J. 1960).

9.4 American Law of Products Liability 3d, § 60:28 (Timothy E. Travers et al. eds., 1991).

10.Jay M. Zitter, Annotation, “Strict Products Liability: Recovery for Damage to Product Alone,” 72 A.L.R. 4th 12 (1989).

11.See Robert E. Keeton, “Liability Insurance and Responsibility for Settlement,” 67 Harv. L. Rev. 1136 (1954).

12.Comunale v. Traders and Gen. Ins. Co., 328 P.2d 198, 200 (Cal. 1958). Some of the facts recited can only be found in the opinion of the lower court, 321 P.2d 768 (Cal. Ct. App. 1958).

13.Id.

14.Id. at 200.

15.Id. at 200–01 (quoting Hilker v. Western Auto. Ins. Co., 231 N.W. 257, 258 (Wis. 1930), aff’d on reh’g, 235 N.W. 413 (Wis. 1931)).

16.Comunale, 328 P.2d at 201.

17.Robert E. Keeton, Basic Text on Insurance Law § 7.8(a) (1971).

18.Comunale, 328 P.2d at 203.

19.Georgetown Realty v. Home Ins. Co., 831 P.2d 7 (Or. 1992) (en banc). See also Joel M. Pollack, “Georgetown Realty v. Home Insurance Company: Oregon

Recognizes a Duty Independent of Liability Insurance Contracts,” 71 Or. L. Rev.

707(1992).

20.Allan D. Windt, Insurance Claims and Disputes §§ 2.02, 2.04, 2.19, 4.01 &

5.01(1982 & Supp. 1993).

21.See Robert H. Jerry II, Understanding Insurance Law §§ 40–46, 63C, 65, 96, 133, & 135A (1987).

22.Palmateer v. International Harvester Co., 421 N.E.2d 876 (Ill. 1981).

23.Vermillion v. AAA Moving and Storage, 704 P.2d 1360 (Ariz. 1985).

24.Michael A. DiSabatino, Annotation, “Modern Status of Rule That Employer May Discharge At-Will Employee for Any Reason,” 12 A.L.R. 4th 544, §§ 3, 6–14.

25.Id.

26.Restatement (Second) of Torts § 46 (1965).

27.Dennis P. Duffy, “Intentional Infliction of Emotional Distress and Employment at Will: The Case against ‘Tortification’ of Labor and Employment Law,” 74 Boston U. L. Rev. 387 (1994); James. F. Bleeke, “Intentional Infliction of Emotional Distress in the Employer at Will Setting: Limiting the Employer’s Manner of Discharge,” 60 Ind. L.J. 365 (1985).

28.Dean v. Ford Motor Credit Co., 885 F.2d 300 (5th Cir. 1989).

29.Wilson v. Monarch Paper Co., 939 F.2d 1138 (5th Cir. 1991).

30.Leo Bearman Jr., “Caveat Emptor in Sales of Realty—Recent Assaults upon the Rule,” 14 Vand. L. Rev. 541 (1961).

31.White & Summers, supra note 5, § 9-7, at 408; Alphonse M. Squillante & John R. Fonseca, 2 Williston on Sales §§ 15-19 to 15-21 (4th ed. 1974).

32.Humber v. Morton, 426 S.W.2d 554 (Tex. 1968).

33.Bearman, supra note 25, at 542–43; Annotation, “Liability of Builder-Ven- dor or Other Vendor of New Dwelling for Loss, Injury, or Damage Occasioned by Defective Condition Thereof,” 25 A.L.R. 3d 383 (1969 & Supp. 1992).

34.Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 352, 355 (Tex. 1987).

35.Frickel v. Sunnyside Enters., Inc., 725 P.2d 422 (Wash. 1986).

36.Lenawee County Bd. of Health v. Messerly, 331 N.W.2d 203 (Mich. 1982).

37.Schepps v. Howe, 665 P.2d 504 (Or. 1983).

38.Frona M. Powell, “Disclaimers of Implied Warranty in the Sale of New Homes,” 34 Vill. L. Rev. 1123, 1143 (1989).

39.Richard R. Powell & Patrick J. Rohan, 2 Powell on Real Property ¶’s 230, 231, 233, & 234 (1993).

40.Melody Home, 741 S.W. 2d at 352, 354, 355–56.

41.W. Page Keeton et al., Prosser and Keeton on the Law of Torts §§ 1, 32 (5th ed. 1984).

42.See, e.g., Cal. Bus. & Prof. Code §§ 7065 (West 1975 & Supp. 1994) (contractors); id. §§ 6520–26 (barbers); id. §§ 3320–27 (hearing aid dispensers); id. §§ 9989.31–.32 (motor vehicle mechanics); id. §§ 7520, 7526.0–.4 (private investigators); Cal. Food & Agric. Code §§ 11701–09 (West 1986 & Supp. 1994) (pest controllers).

43.Keeton et al., supra note 41, § 32, at 185.

44.Id.

45.Data Processing Servs. Inc. v. L. H. Smith Oil Corp., 492 N.E.2d 314, 319–

20(Ind. Ct. App. 1986).

46.Diversified Graphics, Ltd. v. Groves, 868 F.2d 293 (8th Cir. 1989).

47.Ellsworth Dobbs, Inc. v. Johnson, 236 A.2d 843 (N.J. 1967).

48.Id. at 850.

49.Id. at 850–52, 857.

50.Id. at 857–59.

51.Id. at 856–57.

52.Sonja A. Soehnel, Annotation, “Modern View as to Right of Real Estate Broker to Recover Commission from Seller-Principal Where Buyer Defaults under Valid Contract of Sale,” 12 A.L.R. 4th 1083, § 3 (1982 & Supp. 1992).

53.Id. § 4. In addition, although the annotation lists New Hampshire as still holding to the old view, see id. § 3, the New Hampshire Supreme Court has indicated that it favors the new view in Dunn v. Staples, 248 A.2d 635 (N.H. 1968). See id. § 3 n.10, § 5.

54.Strout Realty, Inc. v. Milhous, 689 P.2d 222 (Idaho Ct. App. 1984); Bushnell Real Estate, Inc. v. Nielson, 672 P.2d 746 (Utah 1983); Kuga v. Chang, 399 S.E.2d 816 (Va. 1991).

55.Restatement (Second) of Agency §§ 1, 13 (1958); William E. Sell, Sell on Agency §§ 2, 39 (1975).

56.Uniform Partnership Act §§ 20, 21 (1976); Harold G. Reuschlein & William A. Gregory, Agency and Partnership § 188 (1979).

57.E.g., Model Rules of Professional Conduct Rule 1.7 (1983) (lawyers).

58.Deborah A. DeMott, “Beyond Metaphor: An Analysis of Fiduciary Obligation,” 1988 Duke L.J. 879, 880–88, 903–10, 916–21 (1988).

59.John D. Calamari & Joseph M. Perillo, Contracts §§ 9–10, 9–11 (3d ed. 1987); Farnsworth, supra note 2, §§ 4.11, 4.20, 4.27; Christopher M. Guidroz, Note, “Use of Non-Confidential Relationship Undue Influence in Contract Recision,” 49 Notre Dame L. Rev. 631, 632–33 (1974).

60.DeMott, supra note 58, at 892–902 (1988). Franchisor and franchisee, see also Arnott v. American Oil Co., 609 F.2d 873 (8th Cir. 1979), cert. denied, 446 U.S. 918 (1980); see generally Harold Brown, “Franchising—A Fiduciary Relationship,” 49 Tex. L. Rev. 650 (1971). Manufacturer and distributor, see also Hospital Prods., Ltd. v. U.S. Surgical Corp., 55 A.L.R. 417 (Austl. 1984), rev’g 2 [1983] N.S.W.R. 157 (N.S.W. Ct. App. 1983). Bank and borrower, see also Barrett v. Bank of Am., 229 Cal. Rptr. 16 (Cal. Ct. App. 1986); Klein v. First Edina Nat’l 196 N.W.2d 619 (Minn. 1972). Bank and depositor, see also Commercial Cotton Co. v. United Cal. Bank, 209 Cal. Rptr. 551 (Cal. Ct. App. 1985); see generally Annotation, “Existence of Fiduciary Relationship between Bank and Depositor or Customer So as to Impose Special Duty of Disclosure upon Bank,” 70 A.L.R. 3d 1344 (1976). Holders of interests in oil and gas estates, see also Manges v. Guerra, 673 S.W.2d 180 (Tex. 1984).

61.Austin W. Scott, The Law of Trusts (4th ed. 1987).

62.Austin W. Scott, “The Fiduciary Principle,” 37 Cal. L. Rev. 539, 540 (1949).

63.J. C. Shepherd, Law of Fiduciaries 96 (1981).

64.DeMott, supra note 58, at 910–13.

65.Id. at 915.

66.Farnsworth, supra note 2, § 2.15(a), at 120–22 (esp. n.10); see generally id.

§7.17(a).

67.Id. § 2.15(a). See, e.g., Tymshare, Inc. v. Covell, 727 F.2d 1145 (D.C. Cir. 1984) (Scalia, J.); Best v. U.S. Nat’l Bank, 739 P.2d 554, 558 (Or. 1987). See generally Farnsworth, supra note 2, § 2.13.

68.Farnsworth, supra note 2, § 2.13.

69.Id. § 8.4.

70.Id. See also Morin Bldg. Prods. Co. v. Baystone Constr., Inc., 717 F.2d 413 (7th Cir. 1983).

71.K.M.C. Co. v. Irving Trust Co., 757 F.2d 752 (6th Cir. 1985).

72.Charles L. Knapp & Nathan M. Crystal, Problems in Contract Law: Cases and Materials 528–29 (3d ed. 1993).

73.Federal Trade Commission Act, 15 U.S.C. § 45(a)–(m) (1982).

74.Anthony P. Dunbar, Note, “Consumer Protection: The Practical Effectiveness of State Deceptive Trade Practices Legislation,” 59 Tul. L. Rev. 427, 427–29 (1984); Donald P. Rothschild & David W. Carroll, Consumer Protection Reporting Service pt. III, ch. 4 (1986 & Supp. 1992).

75.Cal. Bus. & Prof. Code § 9884.9 (West 1971); Nev. Rev. Stat. Ann. § 487.035 (Michie 1965); N.Y. Veh. & Traf. Law § 398(d) (Consol. 1974); Ohio Admin. Code § 109:4-3-13 (1978); Va. Code Ann. § 59.1-207.3 (Michie 1989).

76.Ohio Admin. Code § 109:4-3-05 (1978).

77.Magnusen-Moss Federal Trade Commission Improvement Act, 15 U.S.C.

§§2301–12 (1975).

78.Seaman’s Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158 (Cal.

1984).

79.Id. at 1166–67.

80.Ellsworth Dobbs, Inc. v. Johnson, 236 A.2d 843, 856–57 (N.J. 1967).

81.Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 352, 354–55 (Tex.

1987).

82.F. D. Borkholder Co. v. Sandock, 413 N.E.2d 567, 571 (Ind. 1980).

83.Guido Calabresi, The Costs of Accidents (1970).

84.Kenneth S. Abraham, Insurance Law and Regulation: Cases and Materials

586 (1990).

85.William K. Jones, “Product Defects Causing Commercial Loss: The Ascendancy of Contract over Tort,” 44 U. Miami L. Rev. 731 (1990). See also Elizabeth A. Heiner, Note, “Sunnyslope Grading, Inc. v. Miller, Bradford & Risberg, Inc.: What Recovery for Economic Loss—Tort or Contract?,” 1990 Wis. L. Rev. 1337 (1990) (reaching similar conclusions).

86.Spencer L. Kimball, Cases and Materials on Insurance Law 486–513 (1992); Spencer L. Kimball, Teacher’s Manual to Cases and Materials on Insurance Law 73–78 (1992). See also, Robert H. Jerry, II “The Wrong Side of the Mountain: A Comment on Bad Faith’s Unnatural History,” 72 Texas R. Rev. 1295 (1994).

87.See Kimball, Cases and Materials, supra at 495–97, and Teacher’s Manual, supra at 75–76.

88.See Kimball, Cases and Materials, supra at 513–22, and Teacher’s Manual, supra at 78.

89.Crisci v. Security Ins. Co., 426 P.2d 173 (Cal. 1967). See also DiMare v. Crisci, 17 Cal. Rptr. 265 (Cal. Ct. App. 1961).

90.Crisci, 426 P.2d at 176.

91.See John Alan Appleman & Jean Appleman, 8 Insurance Law and Practice § 4831 (1981); Stephen L. Liebo, supra (Supp. 1993).

92.Mark S. Rhodes, Couch on Insurance 2d (rev. ed.) §§ 45:679 & 45:721 (1981 & Supp. 1994).

93.Richard Craswell, “Passing on the Costs of Legal Rules: Efficiency and Distribution in Buyer-Seller Relationships,” 43 Stan. L. Rev. 361 (1991).

94.Henningsen v. Bloomfield Motors, Inc., 161 A.2d 69, 87 (N.J. 1960).

95.George L. Priest, “A Theory of the Consumer Product Warranty,” 90 Yale L.J. 1297, 1317–18 (1981); Daniel S. Schecter, “Consequential Damage Limitations and Cross-Subsidization: An Independent Approach to Uniform Commercial Code Section 2–719,” 66 S. Cal. L. Rev. 1273 (1993).

96.Wilson Trading Corp. v. David Ferguson, Ltd., 244 N.E.2d 685 (N.Y. 1968).

97.Craswell, supra note 93, at 374.

98.Hadley v. Baxendale, 156 Eng. Rep. 145 (Ex. 1854).

99.Schecter, supra note 95, at 1283–89.

100.Farnsworth, supra note 1, § 5.2.

Chapter 5

1.Comunale v. Traders and Gen. Ins. Co., 328 P.2d 198 (Cal. 1958).

2.E.g., Valentine v. General Am. Credit, Inc., 420 Mich. 256, 262–63, 362 N.W.2d 628 (1984); Restatement (Second) of Contracts § 353 (1981) (allowing damages for emotional distress if “the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result”); Restatement (First) of Contracts § 341 (1932) (also allowing such recoveries, but only if the breach was “wanton or reckless”); Charles M. Louderback, “Standards for Limiting the Tort of Bad Faith Breach of Contract,” 16 U.S.F. L. Rev. 187, 204–05 (1982). See also Allen v. Jones, 163 Cal. Rptr. 445 (Cal. Ct. App. 1980); Lamm v. Shingleton, 55 S.E.2d 810 (N.C. 1949) (burial contract).

3.John D. Calamari & Joseph M. Perillo, Contracts § 14-3 (3d ed. 1987).

4.Restatement (Second) of Contracts § 353 (1981); Dan B. Dobbs, Handbook on the Law of Remedies § 12.4 (1973); Calamari & Perillo, supra note 3, § 14-5(b).

5.Calamari & Perillo, supra note 3, § 14-8.

6.W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 2 (5th ed. 1984).

7.Crisci v. Security Ins. Co., 426 P.2d 173 (Cal. 1967). See also DiMare v. Crisci, 17 Cal. Rptr. 265 (Cal. Ct. App. 1961), opinion vacated, 373 P.2d 860 (Cal. 1962).

8.Fletcher v. Western Nat’l Life Ins. Co., 89 Cal. Rptr. 78 (Cal. Ct. App. 1970).

9.Wetherbee v. United Ins. Co., 71 Cal. Rptr. 764 (Cal. Ct. App. 1968), aff’d on second appeal, 95 Cal. Rptr. 678 (1971).

10.Keeton et al., supra note 6, § 12.

11.Gruenberg v. Aetna Ins. Co., 510 P.2d 1032 (Cal. 1973).

12.Seaman’s Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158, 1166–67 (Cal. 1984).

13.Id. at 1160–62.

14.Id. at 1167.

15.The parties settled out of court on remand. Superior Ct. of Humboldt County, No. 57371 (1985) (documents on file with author).

16.Seaman’s, 686 P.2d at 1166–67.

17.Adams v. Crater Well Drilling, Inc., 556 P.2d 679 (Or. 1976).

18.Seaman’s, 686 P.2d at 1167 (quoting Adams, 556 P.2d at 681).

19.Seaman’s, 686 P.2d at 1167.

20.Id.

21.Id. at 1162–64.

22.Id. at 1168.

23.See, e.g., White v. Western Life Ins. Co., 710 P.2d 309 (Cal. 1985).

24.Brandt v. Superior Ct., 693 P.2d 796 (Cal. 1985).

25.Keeton et al., supra note 6, §§ 119–21.

26.Brandt, 693 P.2d at 798–99.

27.White, 710 P.2d 309.

28.Slottow v. American Casualty Co., 1 F.3d 912, 919 (9th Cir. 1993).

29.Careau & Co. v. Security Pac. Business Credit, Inc., 272 Cal. Rptr. 387, 404–06 (Cal. Ct. App. 1990).

30.See, e.g., Joseph Ryan, Jr., “The Bad Faith Blast,” 28 For the Defense 20 (Mar. 1986).

31.C. Delos Putz, Jr. & Nona Klippen, “Commercial Bad Faith: Attorney Fees—Not Tort Liability—Is the Remedy for ‘Stonewalling,’ ” 21 U.S.F. L. Rev. 419, 458–60 (1987).

32.Preble Stolz, Judging Judges (1981); Robert S. Thompson, “Judicial Retention Elections and Judicial Method: A Retrospective on the California Retention Election of 1986,” 61 S. Cal. L. Rev. 2007 (1988).

33.Foley v. Interactive Data Corp., 765 P.2d 373 (Cal. 1988).

34.Id. at 393.

35.Seaman’s Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158, 1167 (Cal. 1984).

36.Id. at 1168.

37.David J. Jung & Richard Harkness, “Life after Foley: The Future of Wrongful Discharge Litigation,” 41 Hastings L.J. 131 (1989). See also Air-Sea Forwarders, Inc. v. Air Asia Co., 880 F.2d 176, 184-85 (9th Cir. 1989) (reviewing the California decisions); Oki Am., Inc. v. Microtech Int’l, Inc., 872 F.2d 312, 315 (9th Cir. 1989) (Kozinski, J., concurring); Careau & Co., 272 Cal. Rptr. at 404–05.

38.1995 WL 521453.

39.The sixteen jurisdictions that broadly recognize the tort of bad faith breach are as follows:

Connecticut: L. F. Pace & Sons, Inc. v. Travelers Indem. Co., 514 A.2d 766 (Conn. App. Ct. 1986) (recognizing tort where defendant refused to give payment and performance bonds).

District of Columbia: Wagman v. Lee, 457 A.2d 401 (D.C. 1983), cert. denied, 459 U.S. 912 (1984) (recognizing a tort action for breach of a fiduciary duty based on a contractual obligation although not calling it “bad faith”).

Georgia: McDevitt & Street Co. v. K-C Air Conditioning Serv. Co., 418 S.E.2d 87, 93 (Ga. Ct. App. 1992), cert. denied, 1992 Ga. LEXIS 486 (Ga. 1992) (recogniz-

ing tort cause of action against surety for breach of surety contract if breach was in “bad faith”); Tate v. Aetna Cas. & Sur. Co., 253 S.E.2d 775, 777 (Ga. Ct. App. 1992) (“It is well settled that misfeasance in the performance of a contractual duty may give rise to a tort action. . . . The duty, for the breach of which an action ex delicto lies, must be a duty imposed by law as to some relationship, general or special, as applied to that class of cases where the alleged duty arises out of a contract.”).

Hawaii: Chung v. Kaonohi Ctr. Co., 618 P.2d 283 (1990) (holding that extracontractual damages for emotional distress were allowable in ordinary commercial contract situations when the defendant acted maliciously or with willful disregard of another’s rights).

Indiana: Hibschman Pontiac, Inc. v. Batchelor, 362 N.E.2d 845, 847 (1977) (recognizing the tort “when . . . elements of tort mingle with the breach” and punitive damages “whenever the elements of fraud, malice, gross negligence or oppression mingle in the controversy”).

Maine: Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644, 651–52 (1993) (refusing to recognize tort of bad faith breach of insurance contract on ground of preemption by legislation that provided for recoveries of attorneys’ fees and statutory interest under certain circumstances); Boivin v. Jones & Vining, Inc., 578 A.2d 187, 189 (Me. 1990) (punitive damages are available for breach of contract if plaintiff proves by clear and convincing evidence that defendant acted with malice or malice is implied by the outrageous nature of the conduct). Thus, it appears that the substance of the tort of bad faith is broadly applicable in Maine even if the name is forbidden.

Massachusetts: Massachusetts Consumer Protection Act, ch. 93A, Mass. Gen. Laws Ann., ch. 93A, §§ 1–11 (West 1971 & Supp. 1994) (conferring private rights of action on individual consumers for punitive in addition to compensatory damages and attorneys’ fees for “unfair or deceptive practices,” expressly including bad faith breach); Gloria Ann Aloise, “The Massachusetts Consumer Protection Act, Chapter 93A—A Look at Provisions for Double and Treble Damages, the Written Demand for Relief, and Reasonable Attorneys’ Fees,” 16 N.E. L. Rev. 449 (1981).

Mississippi: Sessoms v. Allstate Ins. Co., 634 So. 2d 516, 519 (1994); Independent Life & Accident Ins. Co. v. Peavy, 528 So. 2d 1112, 1115 (Miss. 1988).

Montana: Nicholson v. United Pac. Ins. Co., 710 P.2d 1342 (Mont. 1985) (awarding commercial lessor punitive damages for lessee’s breach of covenant), modified by Story v. City of Bozeman, 791 P.2d 767, 776 (Mont. 1990) (confining the tort of bad faith to “contracts which necessarily give one party a superior position,” but not overruling Nicholson).

New Mexico: Bourgeous v. Horizon Healthcare Corporation, 872 P.2d 852 (1994) (recognizing a duty of good faith and fair dealing in every contract not to do anything to injure the rights of the other party to receive the benefit of the contract and a remedy of punitive damages if this duty is breached, although refusing to hold that the duty sounds in tort); Romero v. Mervyn’s, 784 P.2d 992, 998–99 (1989) (recognizing the right to recover punitive damages for bad faith breach in every contract and “a more relaxed standard” for such a recovery in insurance contracts).

Nevada: Hilton Hotels Corp. v. Butch Lewis Productions, Inc., 862 P.2d 1207, 1209 (Nev. 1993) (recognizing the tort “in certain circumstances” including the case at hand, in which the plaintiff, a large corporation, was suing a heavyweight boxing promoter).

North Carolina: Ostreicher v. American Nat’l Stores, 225 S.E.2d 797, 809 (N.C. 1976) (stating that the independent tort of bad faith breach might be appropriate in breach of contract actions that “smack of tort because of the fraud and deceit involved”).

Oklahoma: Rodgers v. Tecumseh Bank, 756 P.2d 1223, 1226–27 (recognizing the tort for “all types of insurance contracts” and, in addition, any contract in which the breach involves “gross recklessness or wanton negligence”).

Oregon: Georgetown Realty, Inc. v. Home Ins. Co., 831 P.2d 7 (1992) (recognizing that contractual relationships that give one party broad discretionary powers over the interests of the other also give rise to duties of competence and care sounding in tort, and applying this standard to liability insurers in particular); Pfeifer v. Copperstone Restaurant and Bar, 693 P.2d 644, 649 (Or. Ct. of App. 1985) (recognizing right to recover punitive damages for aggravated torts); but see Farris v. U.S. Fid. and Guar. Co., 587 P.2d 1015 (1978) (holding that the State Insurance Fair Practices Code’s penalties for certain kinds of bad faith conduct by insurers preempt rights to punitive damages).

Vermont: Myers v. Ambassador Ins. Co., 508 A.2d 689 (Vt. 1986) (recognizing a liability insurer’s duty of good faith to its insured but not addressing whether it also sounds in tort or whether an insured might recover punitive damages in an appropriate case); Albright v. Fish, 422 A.2d 250, 255 (1980) (recognizing that punitive damages can be recovered if “the breach [of any contract] has the character of a wilful and wanton or fraudulent tort”); Phillips v. Aetna Life Ins. Co., 473 F. Supp. 984 (Vt. 1979) (recognizing tort of bad faith breach under Vermont law in first-party insurance cases).

Wisconsin: Anderson v. Continental Ins. Co., 271 N.W.2d 368, 371–72 and passim (1978) (recognizing the tort for insurers and other defendants who were not insurers, but nevertheless basing the tort on the existence of a special relationship).

40. The eight jurisdictions in addition to California that only narrowly recognize the tort are as follows:

Alabama: Keeton v. Bank of Red Bay, 466 So. 2d 937 (Ala. 1985).

Alaska: State v. Transamerica Premier Ins. Co., 856 P.2d 766, 773–74 (1993). Idaho: Black Canyon Racquetball Club, Inc. v. Idaho First Nat’l Bank, N.A., 804

P.2d 900 (Idaho 1991).

Maryland: Republic Ins. Co. v. Board of County Comm’rs, 511 A.2d 1136 (Md. Ct. Spec. App. 1986).

New Hampshire: Lawton v. Great Southwest First Ins. Co., 392 A.2d 576, 580 (N.H. 1978) (“A breach of contract standing alone does not give rise to a tort action.”).

North Dakota: Pioneer Fuels, Inc. v. Montana-Dakota Util. Co., 474 N.W.2d 706, 709–10 (N.D. 1991) (holding that breach of contract, even in bad faith, is not enough to convert a contract action into a tort action).

plaintiff has made “extraordinary showing of a disingenuous or dishonest failure to carry out a contract”); Neil A. Goldberg, Thomas F. Segalla, & Richard J. Cohen, “Can the Puzzle Be Solved: Are Punitive Damages Awardable in New York for First-Party Bad Faith?,” 44 Syracuse L. Rev. 723 (1993) (concluding that the State Court of Appeals has not answered the question and the lower court decisions are mixed).

Rhode Island: Bibeault v. Hanover Ins. Co., 417 A.2d 313 (R.I. 1980) (extending tort to all first-party insurance cases except those arising out of fire insurance contracts); Voccia v. Reliance Ins. Co., 703 F.2d 1 (1st Cir. 1983) (allowing tort in third-party insurance cases).

South Carolina: Nichols v. State Farm Mut. Auto. Ins. Co., 306 S.E. 2d 616 (S.C. 1983) (recognizing independent tort of bad faith in insurance cases); Ludwick v. This Minute of Carolina, Inc., 337 S.E.2d 313 (S.C. 1985) (allowing recovery in tort for breach of employment contract).

Wyoming: Drake v. Cheyenne Newspapers, Inc., 1995 WL 90316, p. 2 (1995) (recognizing the tort only when there are “special relationships,” seemingly without regard to the character of the breach itself); McCullough v. Golden Rule Ins. Co., 789 P.2d 855, 858 (Wyo. 1990) (“There are certain classes of contracts which create a relation out of which certain duties arise as implied by law independently of the express term of the contract. If the negligent breach of contract is also a breach of such duty the remedy is ex contractu and ex delicto.”).

42.AM/PM Franchise Ass’n v. Atlantic Richfield Co., 542 A.2d 90 (1988), 584 A.2d 915 (1990) (holding that the facts did not give rise to the question); Standard Pipeline Coating Co. v. Solomon & Teslovich, Inc., 496 A.2d 840, 843–44 (1985) (declining to recognize the tort).

43.Hal Taylor Associates v. Unionamerica, Inc., 657 P.2d 743, 750 (Utah 1982) (declining to find a basis for punitive damages for breach of contract in the absence of the commission of an “independent tort indicating malice, fraud or wanton disregard for the rights of others”); Beck v. Farmers Ins. Exch., 701 P.2d 795 (Utah 1985) (the contractual relationship in first-party insurance cases does not give rise to duties sounding in tort).

44.Moreover, in one of these the state supreme court has held that a bad faith failure to perform one’s contractual obligations “may give rise to liability in tort.” Cherberg v. Peoples Nat’l Bank of Wash., 564 P.2d 1137, 1143 (Wash. 1977).

45.A WESTLAW Key No. 217k602.10(2) search conducted on March 27, 1994, revealed the jurisdictions that allowed such recoveries. The figure of 33 represents a minimum, however, because the key number presumably does not identify litigation cost recoveries in insurance cases that are not grounded on a special law for insurance cases.

46.Vernon Fire & Casualty Ins. Co. v. Sharp, 349 N.E.2d 173, 180 (Ind. 1976) (“tortious in nature,” defendant an insurer); Hibschman Pontiac, Inc. v. Batchelor, 362 N.E.2d 845, 847 (Ind. 1977) (“elements of fraud, . . . [etc.] mingle in the controversy,” defendant an automobile dealer); F. D. Borkholder Co., Inc. v. Sandock, 413 N.E.2d 567, 571 (Ind. 1980) (emphasizing high degree of public trust, defendant was a construction contractor).

47.Hibschman, 362 N.E.2d 845.

48.Id. at 848.