Blanchard

This is a “bad faith” action by an insured against its insurer for breach of contract and breach of the covenant of good faith and fair dealing. The trial court entered judgment in favor of defendant and respondent State Farm Fire and Casualty Company. Plaintiffs Stephen Blanchard and Blanchard Construction Company, Inc., appeal from the judgment.

The present action involves respondent’s handling of three previous lawsuits brought against appellant. Appellant was a general contractor who was insured by respondent under a multiperil insurance policy. As general contractor appellant supervised certain construction in a townhouse project in Alameda County known as Hyde Park. Pursuant to subcontracts with appellant, Precision Builders, Inc. (Precision) performed framing, siding and finished carpentry work, and Pacific Western Drywall (Pacific) performed drywall/sheetrock work at Hyde Park. Appellant withheld payment from Precision and Pacific on the ground their work was unsatisfactory.

Precision and Pacific sued appellant for money due under the subcontracts. (Hereinafter the subcontractor cases.) Respondent refused to defend or indemnify the subcontractor cases, on the…