FILED 

December 27, 2013 

RORY L. PERRY II, CLERK 

No. 12-1254 

Company 

– Johanna Dorsey v. Progressive Classic Insurance SUPREME COURT OF APPEALS 

OF WEST VIRGINIA 

Benjamin, Chief Justice, dissenting: 

I write separately to reiterate my dissent in Loudin v. National Liability & 

Fire Insurance Company, 228 W. Va. 34, 716 S.E.2d 696 (2011), regarding first-party 

and third-party rights under insurance contracts. In Loudin, the Majority departed from 

well-established law by imposing a duty of good faith and fair dealing on insurance 

companies when dealing with third parties, despite the absence of any underlying 

contractual duty. The Majority’s holding in the case sub judice furthers the error of 

Loudin, blurring the distinction between first-party and third-party insurance rights. 

Therefore, I dissent. 

In the instant case, the Majority holds that “a guest passenger is a first-party 

insured under the medical payments section” of an insurance policy where an “insured 

person” is defined under the policy as “any other person while occupying a covered 

vehicle.” The Majority justifies its new syllabus point by noting that the petitioner, 

Johanna “Dorsey, who never asserted any claims against the named insured and only 

asserted a claim under the policy, has characteristics of a first-party insured.” The 

Majority agrees with Dorsey’s assertion that her “claims were clearly not claims 

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presented against an ‘insured tortfeasor’ or their [sic] insurer,” concluding that Dorsey 

must then be a first party, not a third party. 

This analysis ignores the simple fact that Dorsey never contracted with the 

respondent, Progressive Classic Insurance Company (“Progressive”). She never paid 

insurance premiums to Progressive, and she had no legal relationship with Progressive. 

The duty of good faith and fair dealing arises in contractual relationships. Here, the 

contract was between the driver, Joshua Teacoach, and Progressive. 

Furthermore, despite the Majority’s implication to the contrary, Dorsey did 

not seek benefits based upon a duty owed directly to her. Instead, the benefits Dorsey 

sought flowed from Progressive’s contractual duty to Teacoach. Thus, even though 

Dorsey qualifies as an “insured person” under the policy, she is not a first party to the 

contract; she is a third party. See, e.g., Gillette v. Estate of Gillette, 837 N.E.2d 1283, 

1289 (Ohio App. 2005) (“[W]e conclude that although appellant is an insured under the 

[insurance] policy, where she seeks liability coverage for the negligence of the named 

insured . . . she stands in the shoes of a third-party claimant who is not owed any 

contractual duty by the insurer.”); Smith v. Allstate Ins. Co., 202 F.Supp.2d 1061, 1067 

(D. Ariz. 2002) (“The Court is convinced that the Arizona Supreme Court would follow 

the nearly unanimous precedent from other jurisdictions and hold that an individual is a 

third-party claimant when she is injured by a coinsured’s negligence and she claims 

liability benefits under a jointly owned insurance policy.”); Rumley v. Allstate Indemnity 

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Co., 924 S.W.2d 448, 450 (Tex. App. 1996) (“The relationship between the parties, and 

the duties arising from that relationship, must be considered in the context of the 

particular occurrence in dispute. . . . Although [the appellant] had a contractual 

relationship with [the insurer], the claim underlying the allegations of bad faith in failing 

to promptly settle for policy limits is based not upon benefits payable to her under the 

policy, but upon her husband’s tort liability to her for his negligence.”); Wilson v. Wilson, 

468 S.E.2d 495, 497 (N.C. App. 1996) (“[W]e conclude that North Carolina does not 

recognize a cause of action for third-party claimants against the insurance company of an 

adverse party based on unfair and deceptive trade practices . . . .”). To the extent that the 

Majority opinion finds otherwise, I dissent. 

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