Arizona Appellate Court To Consider Standard For Aiding And Abetting Bad Faith Claims

In cases alleging bad faith against an insurance carrier, policyholders will often sue employee adjusters or contractors (independent adjusters, engineers, experts) of the insurance carrier in order to keep the case out of federal court.

In a legal sense, policyholders sue the employee adjusters or contractors to defeat ‘diversity jurisdiction’ necessary for the federal court to hear the case.

The most common legal claim alleged against the employee adjuster or contractor is ‘aiding and abetting’ the breach of the duty of good faith and fair dealing.

In Iglesia v. Brotherhood, the Arizona Court of Appeals will address the standard to state a claim against the employee adjuster or contractor for aiding and abetting the breach of the duty of good faith and fair dealing.

Iglesia arises out of a hail loss at a church in Phoenix, Arizona. After the loss, the insurer retained an engineering firm to evaluate the damages. After the insurer denied the claim, Iglesia filed suit against the insurer for breach of contract and breach of the duty of good faith and fair dealing, and against the engineering firm for aiding and abetting the breach of the duty of good faith and fair dealing.