Bad Faith Not Recognized as a Cause of Action in Utah


Breach of Duty of Good Faith is Different from Bad Faith in Utah

State Farm Fire and Casualty Company (State Farm) moved the USDC to dismiss Genevieve Healy-Petrik’s third cause of action for  “bad faith.” Ms. Healy-Petrik, who has an insurance policy from State Farm, claimed that State Farm’s actions and inactions concerning the insurance policy constitute bad faith. However, in Genevieve Healy-Petrik, an individual v. State Farm Fire And Casualty Company, an Illinois corporation, Case No. 2:20-cv-611, United States District Court For The District Of Utah, Central Division (October 26, 2020) the USDC noted that in Utah does not recognize tort causes of action in a first-party relationship between an insurer and its insured.


Ms. Healy-Petrik brought three causes of action against State Farm: 1) breach of contract; 2) breach of duty of good faith and fair dealing; and 3) bad faith. Ms. Healy-Petrik’s claims pertain to a property insurance policy that she obtained from State Farm. State Farm agreed to cover a portion of the roof damage but not what she believed to be the full property loss. Ms. Healy-Petrik alleged that State Farm’s actions and inactions constituted bad faith when State Farm failed to properly investigate the claim, refused to value the damaged roof with a similar replacement, and did not provide a copy of the insurance policy nor identify the portions of the insurance policy that supported it decisions.

Ms. Healy-Petrik’s Third Cause Of Action For Bad Faith Is Not A Plausible Claim For Relief

The relationship between Ms. Healy-Petrik and State Farm arises from a contract—the property insurance policy. The policy creates a first-party insurance relationship that defines the parties’ duties and obligations. Utah does not recognize tort causes of action in a first-party relationship between an insurer and its insured. Ms. Healy-Petrik’s bad faith claim under tort law is fundamentally the same as Ms. Healy-Petrik’s second claim for breach of good faith and fair dealing. The terms “bad faith” and “breach of good faith and fair dealing” are used interchangeably in Utah contract cases.

State Farm Is Not Entitled To Attorney’s Fees

State Farm requests that the court award attorney’s fees for the time and expense State Farm incurred by filing its motion to dismiss. Here, Ms. Healy-Petrik’s bad faith claim had no basis in law, since it is not recognized as a distinct cause of action separate from her second claim of breach of good faith and fair dealing. Her bad faith claim has no separate weight or importance, and as a result it is without merit.

To find that a claim was not brought in good faith, a court must determine that at least one of the following factors existed: (i) the party lacked an honest belief in the propriety of the activities in question; (ii) the party intended to take unconscionable advantage of others; or (iii) the party intended to or acted with the knowledge that the activities in question would hinder, delay, or defraud others.

State Farm has not sufficiently shown that Ms. Healy-Petrik did not act in good faith. Even though Ms. Healy-Petrik’s counsel refused to drop the bad faith claim, this does not mean that Ms. Healy-Petrik’s counsel lacked an honest belief in the success of the claim, took unconscionable advantage of others, or intended to hinder, delay, or defraud others. The interchangeable use of “bad faith” with “breach of good faith and fair dealing” is admittedly confusing, and Ms. Healy-Petrik’s assertion of the bad faith claim was an found to be an honest one, even though the claim itself is without merit.

State Farm’s motion to dismiss was granted and Ms. Healy-Petrik’s third claim is dismissed with prejudice. Attorney’s fees were refused.


This is a victory in name only. The lawsuit was cleaned up by removing a duplicative cause of action. State Farm must still defend the action for breach of the covenant of good faith. It is important that Utah refuses to accept the tort of bad faith and finds the action for breach of the covenant of good faith and fair dealing is a contract claim. The state is rare in that regard and, if I had my ‘druthers it would be the law everywhere.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals. last two issues of ZIFL here. 

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