Burnside v. State Farm Fire and Casualty Co.

Plaintiffs appeal as of right from an order of the circuit court denying their motion for an award of costs and attorney fees against defendant in this breach of contract action. Plaintiffs’ *424motion was based upon the jury’s determination that defendant breached its implied contractual duty as an insurer to act fairly and reasonably in investigating and refusing to pay plaintiffs’ claim. We affirm. In doing so, we hold that the application of the American rule precludes the recovery of attorney fees incurred as the result of an insurer’s bad-faith refusal to pay a claim.

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On January 8, 1989,…