Court Opinion

ID: 9495030
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:53:01.207848+00
Date Added: 2024-06-11T17:56:46.707518
License: Public Domain

FERNANDEZ, Circuit Judge,
Dissenting:
I dissent from the decision to overturn the district court’s grant of summary judgment in favor of Principal Mutual Life Insurance on Amadeo’s claims for tortious breach of the covenant of good faith and fair dealing, and for punitive damages.
After the district court granted summary judgment on the above mentioned claims, Amadeo voluntarily dismissed her claim for breach of contract with prejudice, which had the undeniable effect of determining that claim on the merits in favor of Principal. See Commercial Space Mgmt. Co., Inc. v. The Boeing Co., Inc., 193 F.3d 1074, 1080 (9th Cir.1999); Harrison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530, 534 (4th Cir.1991); Schwarz v. Folloder, 767 F.2d 125, 129 (5th Cir.1985). That being so, Amadeo cannot claim that Principal breached the contract when it denied benefits in this case. But under California law, a breach of the obligations (expressed or implied) of the underlying contract is a sine qua non of a bad faith claim. See Waller v. Truck Ins. Exch., Inc., 11 Cal.4th 1, 35-36, 900 P.2d 619, 638-39, 44 Cal.Rptr.2d 370, 389-90 (1995); Love v. Fire Ins. Exch., 221 Cal.App.3d 1136, 1151, 271 Cal.Rptr. 246, 255 (1990); Kopczynski v. Prudential Ins. Co., 164 Cal.App.3d 846, 849, 211 Cal.Rptr. 12, 14-15 (1985); see also Solomon v. N. Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1137 (9th Cir.1998); State Farm Mut. Auto. Ins. Co. v. Davis, 7 F.3d 180, 184 (9th Cir.1993). Thus, Ama-deo cannot prevail on a claim for breach of the covenant of good faith, or on a claim for punitive damages.1
*1166In any event, it is apparent that the denial of benefits in this case was based upon a genuine dispute over whether Ama-deo was legally entitled to them. She did not even apply for them until more than two years after she had stopped working. Thus, it cannot be said that Principal’s refusal to pay was unreasonable. See Lunsford v. Am. Guar. & Liab. Ins. Co., 18 F.3d 653, 656 (9th Cir.1994); Franceschi v. Am. Motorists Ins. Co., 852 F.2d 1217, 1220 (9th Cir.1988); Safeco Ins. Co. of Am. v. Guyton, 692 F.2d 551, 557 (9th Cir.1982); Opsal v. United Servs. Auto. Ass’n, 2 Cal.App.4th 1197, 1205, 10 Cal.Rptr.2d 352 (1991). As a result, the evidence demonstrates that Principal did not breach the covenant of good faith, and cannot be liable for punitive damages. See Lunsford, 18 F.3d at 656; Franceschi, 852 F.2d at 1220; Tibbs v. Great Am. Ins. Co., 755 F.2d 1370, 1375 (9th Cir.1985).
Thus, I respectfully dissent.

. Because Amadeo dismissed with prejudice after the district court had ruled, it did not base its decision on that ground, but we still can do so. See Olson v. Morris, 188 F.3d 1083, 1085 (9th Cir.1999); Weiser v. United States, 959 F.2d 146, 147 (9th Cir.1992).