Bad Faith Not Possible Without Preceding Breach

The California Court of Appeals, Second District, has ruled that State Farm’s alleged failure to investigate earthquake damage adequately could not serve as a basis for a bad faith claim where no indemnity was owed in the first place. The case is 1231 Euclid Homeowners Assoc. v. State Farm Fire and Casualty, 2006 WL 147487 (January 20, 2006).

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