Purdy

Action by and on behalf of an insured against an insurer for breach of the covenant of good faith and fair dealing contained in the insurance contract.

Background

Plaintiffs David E. Purdy and Thomas C. Wood, trustee for David E. Purdy, bankrupt, filed a complaint alleging bad faith refusal to settle and professional negligence (legal malpractice). Named as defendants were the insurer, Pacific Automobile Insurance Company, a corporation (hereinafter Pacific), and Pacific’s attorney, Roger W. Roberts, as well as two law firms in which Roberts was a partner during the actionable events, Parker, Stan-bury, McGee and Roberts and Roberts, Mead & Harrison, and various Does.

The complaint pleaded four causes of action. In the first cause of action, plaintiff Wood, as plaintiff Purdy’s bankruptcy trustee, sought compensatory damages for the alleged breach by Pacific resulting in economic loss by Purdy. The second cause of action, by plaintiff Purdy, also against Pacific, sought both compensatory damages for the emotional distress suffered by Purdy because of the breach, and punitive (exemplary) damages.

In the third cause of action, plaintiff Wood, as plaintiff Purdy’s…