Scottsdale Insurance Company v. Market Finders Insurance Corpo

MEMORANDUM

Plaintiff Scottsdale Insurance Co. appeals the entry of summary judgment in favor of Defendant Market Finders Insurance Corp. in this diversity action. On de novo review, LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1130 (9th Cir.2009), we affirm in part, reverse in part, and remand.

1. The district court properly granted summary judgment to Defendant on the claim that Defendant breached the duty of good faith and fair dealing. Plaintiff neither alleged, nor introduced evidence of, any bad faith on Defendant’s part. See Deese v. State Farm Mut. Auto. Ins. Co., 172 Ariz. 504 , 838 P.2d 1265, 1268 (1992) (describing the legal requirements for a breach of the duty of good faith and fair dealing).

2. The district court erred by granting summary judgment to Defendant on the claim that Defendant breached its obligation to underwrite the insurance policy with reasonable care. Defendant had a duty to underwrite the insurance policy with reasonable care arising from the parties’ agency agreement. See Robertson v. Sixpence Inns of Am., Inc., 163 Ariz. 539 , 789 P.2d 1040, 1044 (1990) (“The existence of a duty is a question of law to be determined by the court.”); Restatement…