Phone: (831) 661-5851
Fax: (650) 858-8411
[email protected]

Contact Stephen Pappas

Bad Faith

Every contract, including every insurance policy, includes an “implied covenant of good faith and fair dealing,” the breach of which is known as “bad faith.”  The difference between insurance policies and other contracts is that insurers who are guilty of bad faith may owe more than just the money due under the contract.  Insurers who commit bad faith may also be liable for emotional distress damages, attorneys’ fees, and even punitive damages.

Bad Faith Between Contracted Parties

The “implied covenant of good faith and fair dealing” requires that each party to a contract not do anything to prevent the other party from realizing its anticipated benefits.  This means an insurer may not engage in unreasonable claims-handling practices designed to prevent the insured from recovering on a claim.  Doing so amounts to “bad faith.”

Unreasonable claims practices may involve failing to fully investigate the facts, misrepresenting the facts or law, or taking an unreasonable stance on well-settled law or the interpretation of a clause in the policy, for example.  An insurer who commits any one of these acts may be guilty of “bad faith.”

Experience Litigating Bad Faith Claims

We have substantial experience litigating bad faith claims.  Mr. Pappas was trial counsel for the insured party in the case of West America Insurance Co. v. Freeman (where the insurer sued Freeman for reimbursement of attorney fees it spent defending him, and he countersued for bad faith) which resulted in a $13.3 million verdict against the insurer, including $12 million in punitive damages.  See the appeals court opinion at:

If you have been treated unfairly by an insurer, contact us today.

Contact Stephen Pappas

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P.O. Box 2048
Aptos, CA 95001
Phone: (831) 661-5851
Telefax: (650) 858-8411
(650) 804-9299 (mobile)
[email protected]
Alternate:  [email protected]