Defended TIG Insurance Company (formerly Transamerica Insurance Company) in a one-month jury trial over a bad faith claim against Talbot Partners.  Claim resulted from a breach of performance and payment bond issued by client to Cates Construction, a real estate developer.  Established strategy for appeal wherein the California Supreme Court reversed the trial court’s $28 million decision in a landmark published decision in TIG’s favor.  The court found that the developer and the bank could not recover in tort for the surety’s alleged breach of the covenant of good faith and fair dealing implied in the performance bond as a matter of law.  The court held that contract remedies provide adequate compensation for breach of a construction bond and a surety cannot be liable for insurance bad faith.  

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