Opinion ID: 1427999
Heading Depth: 3
Heading Rank: 4

Heading: Authorities From Other States

Text: We observe that the Texas Supreme Court recently concluded that performance bond obligees should not be permitted to recover tort damages from commercial sureties for breaches of the implied covenant of good faith and fair dealing. ( Great American Ins. v. N. Austin Utility (Tex.1995) 908 S.W.2d 415; cf. U.S. ex rel. Ehmcke Sheet Metal Works v. Wausau Ins. Co., supra, 755 F.Supp. 906 [subcontractor may not sue surety in tort on a payment bond].) As Talbot notes, however, courts in other jurisdictions have concluded otherwise. ( Transamerica Premier v. Brighton School, supra, 940 P.2d 348; Loyal Order of Moose v. Intern. Fidelity (Alaska 1990) 797 P.2d 622; Dodge v. Fidelity & Deposit Co. of Md., supra, 778 P.2d 1240; Szarkowski v. Reliance Ins. Co. (N.D.1987) 404 N.W.2d 502; cf. K-W Industries v. National Sur. Corp., supra, 754 P.2d 502 [subcontractor may sue surety in tort on a payment bond].) After carefully reviewing the foregoing authorities, we find ourselves unpersuaded by the decisions that allow tort recovery, for they fail to give appropriate consideration to the material differences between insurance policies and performance bonds and the differing relations between the parties thereto. In addition, many of the decisions place undue emphasis upon statutes regulating suretyship as a class of insurance.