A.A.A. Pool Service & Supply, Inc. v. Aetna Casualty & Surety Co.

The United States District Court for the District of Rhode Island, acting pursuant to Sup. Ct. R. 6, has certified to us the following question of law:

“Does an insurer’s bad faith refusal to settle an insurance claim give rise to an independent cause of action for breach of a duty owed to the insured resulting in liability for compensatory and punitive damages and attorney’s fees?”

The facts relevant to the question are uncomplicated and may be stated briefly. On or about July 1, 1974, defendant issued plaintiff a fire insurance contract in the face amount of $27,000 insuring a building owned…