Curtis McCullough and Judith M. McCullough, Husband and Wife, Petitioners v. Golden Rule Insurance Co., an Illinois…

Summary

Answering two questions certified from the Tenth Circuit, the Wyoming Supreme Court held that an insurer owes its policyholders a legally imposed duty of good faith and fair dealing, the unreasonable denial of first-party benefits in breach of which supports an independent tort action, adopting the independent-tort thesis of Gruenberg. The court adopted the objective 'fairly debatable' standard of Anderson for proving the tort and for extra-contractual damages, while retaining Wyoming's existing requirement of wanton or willful misconduct for any award of punitive damages, and rejected the argument that Wyoming's insurance code and attorney's-fee statute preempt the tort. Justice Thomas dissented, and Justice Golden dissented separately with Thomas joining; both would treat the implied covenant as integral to the insurance contract, remedied through contract and statutory remedies rather than a new tort.