Edward Carey Construction Co. v. State Compensation Insurance Fund

I. Introduction

Appellant Edward Carey Constmction Company (CCC) appeals from a judgment of dismissal, entered after the trial court sustained the demurrer of State Compensation Insurance Fund (SCIF) without leave to amend. CCC sued SCIF for breach of contract and breach of the implied covenant of good faith and fair dealing after SCIF denied CCC had a valid workers’ compensation insurance policy and CCC was forced to pursue legal action to obtain benefits under its policy. The trial court ruled CCC’s breach of contract and breach of the implied covenant claims were barred by workers’ compensation “exclusivity.” We reverse.

*660 II. Factual and Procedural Background

On August 25, 2009, CCC filed a complaint for breach of contract and breach of the implied covenant of good faith and fair dealing. CCC alleged as follows: It is a domestic corporation, organized and existing under the laws of California. It obtained a workers’ compensation insurance policy from SCIF for the period May 20, 2005, to May 20, 2006. During the policy period, its employee, Edward Carey, sustained a work-related injury. When CCC notified SCIF of the injury, SCIF asserted the policy “had been…