Erie Insurance v. Hickman Ex Rel. Smith

ON PETITION TO TRANSFER

KRAHULIK, Justice.

We grant transfer to reaffirm the existence of a duty that an insurer deal in good faith with its insured, and to recognize a cause of action in tort for the breach of that duty.

In this case, Ramona Hickman and Nancy Smith (Plaintiffs-Appellees below) filed a first-party claim against Erie Insurance Company (Defendant-Appellant below). Plaintiffs sought a recovery for the breach of an insurance contract and for punitive damages because Erie denied their claims. Judgment was entered on the jury’s verdict awarding both compensatory and punitive damages.…