Gulf Ins. Co. v. TIG Ins. Co.

I. Introduction

Plaintiff, Gulf Insurance Company (Gulf) appeals after a final judgment was entered in its favor and against defendants, TIG Insurance Company and TIG Insurance Company of Michigan (TIG). The appeal is from an order sustaining demurrers to Gulf’s claims for breach of contract and of the implied covenant of good faith and fair dealing in the original complaint. The only issues raised in the appeal relate to the claim for violation of the implied covenant of good faith and fair dealing. The claims arose as a result of Gulf’s acting as surety on a performance bond. The performance bond was issued in connection with a construction contract entered into between Gulf’s principal, Santa Susana Construction (Santa Susana), and the obligee, the County of Los Angeles (the county).

After the demurrer was sustained to the breach of contract and implied covenant of good faith and fair dealing causes of action, the case proceeded to a court trial on Gulf’s remaining claims for declaratory relief, equitable indemnity, and contribution. Eventually, judgment was entered in Gulf’s favor in the sum of $43,593. TIG cross-appeals from the judgment entered on Gulf’s claims in…