Tilbury Constructors, Inc. v. State Compensation Insurance Fund

Plaintiff Tilbury Constructors, Inc., sued its workers’ compensation insurance carrier, State Compensation Insurance Fund (State Fund), asserting causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and three other claims. Tilbury’s complaint is primarily based on the contention that State Fund “performed an incompetent investigation into the responsibility for an accident suffered by one of Tilbury’s employees, and, as a result, [State Fund] unreasonably settled a third-party claim for less than one-fiftieth of the value of the employee’s claim. Because [State Fund] obtained almost no setoff from the responsible party, Tilbury’s premiums skyrocketed.” We shall conclude State Fund’s conduct does not give rise to a cause of action for breach of the insurance contract or a cause of action for the tortious breach of the covenant of good faith and fair dealing. We shall affirm the judgment dismissing the action after the trial court sustained State Fund’s demurrer without leave to amend.

FACTUAL AND PROCEDURAL BACKGROUND

Our review of the trial court’s actions in sustaining State Fund’s demurrer without leave to amend is…