State Farm Fire and Casualty Company v. Shawn Brechbill

Summary

The court held that Alabama recognizes one tort of bad-faith refusal to pay an insurance claim, with refusal to investigate serving as an alternative method of proving that tort rather than a separate cause of action. Because the trial court had already determined that State Farm possessed a reasonably legitimate or arguable basis for denying Brechbill's claim, the bad-faith claim necessarily failed as a matter of law, even if State Farm's investigation was imperfect. The court therefore reversed the judgment and remanded. Chief Justice Moore, specially concurring, would reexamine and abolish the judicially created bad-faith tort, while Justice Murdock concurred in the result but reserved judgment on the distinction from the earlier structural-damage decision.