Harbison

MEMORANDUM AND ORDER

This matter is before the court on a motion for summary judgment filed by defendant .American Motorists Insurance Company (“defendant” or “.AMIC”) pursuant to Federal Rule of Civil Procedure 56. In an earlier decision, subsequently reversed by the Ninth Circuit, this court granted 2kMIC’s motion for summary judgment on the ground there was no potential for coverage, and hence 2kVlIC had no duty to defend plaintiff Joseph Harbison (“Harbison”). The Ninth Circuit reversed, finding that .AMIC had a duty to defend Harbison in an action brought against Harbison by a former co-counsel because there was a potential for coverage based on various allegations in the com plaint. Defendant now moves for partial summary judgment as to plaintiffs claims for breach of the implied covenant of good faith and fair dealing and for punitive damages, arguing that the court can find as a matter of law that its denial of coverage was, at most, a reasonable mistake in judgment in interpreting and applying the policy and thus does not give rise to bad faith liability.

For the reasons set forth below, defendant’s motion is DENIED. Triable issues of fact remain as to the…