Greene v. Safeco Insurance of America

Opinion

HASTINGS, J.

Plaintiff Katie M. Greene (Greene) filed a complaint against Safeco Insurance Company of America (Safeco) for bad faith in failing to renew her car insurance policy. The demurrer of Safeco was sustained without leave to amend. Greene appeals from the order of dismissal.

About December 18, 1979, Greene purchased a policy of car insurance with Safeco for a six-month term. At the end of the six-month period, Greene received a premium notice and by payment of the premium, the policy was renewed for another six months. In April of 1980, plaintiff was involved in an automobile accident in which her vehicle was broadsided by a truck that ran a red light. There was never any question of liability on the part of the truck’s owner and operator, and their insurer eventually reimbursed Safeco under the subrogation provisions of the contract of insurance. However, under Greene’s insurance policy, Safeco undertook to repair her vehicle. A dispute arose as to the extent of damage to her vehicle. Numerous telephone calls were made to the

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Safeco adjuster and Greene expressed unhappiness with the manner in which her claim was being handled. Eventually, it was determined that her car could not be properly repaired, and it was “totalled.”

On November 4, 1980, Safeco notified Greene in writing “that they would not renew the policy of insurance when it expired” on December 18, 1980. Greene requested to know why the policy was not being renewed. In response to this request, Ed Johnson, personal lines underwriter for Safeco, stated the importance of having the insured’s cooperation in settling a claim in a way that both sides get a proper settlement; that since they have not been able to work with her, they decided to terminate the coverage at that time. The policy was not renewed, and Greene had to purchase car insurance coverage at a higher rate with another company.

Greene argues that Safeco’s failure to renew her insurance policy was a breach of the implied covenant of good faith and fair dealing; that she had a right to rely on Safeco’s representations that her car would be repaired; and that Safeco, as her fiduciary, would act with integrity and fidelity. Instead, she was deprived of the use of a car for five months, was subjected to unfriendly representatives of the company and poor service, and in the end, her policy was not renewed. Consequently, she was damaged.