Covenant of Good Faith and Fair Dealing

News & Analysis as of

Connecticut Supreme Court Reaffirms the Right of an Employer to Determine When Commissions Are Paid

As a general proposition, under Connecticut law an employer has the right to determine the wage that will be paid for work performed by an employee, subject to basic requirements such as minimum wage or overtime. For wages...more

CBCA Provides Guidance on the Meaning of the Implied “Good Faith” Requirement in Government Contracts

Implied in every government contract is a requirement of “good faith and fair dealing” regardless of whether the written terms state such a requirement. Therefore, contractors should be careful to avoid conduct that the...more

Insurer Can Breach Duty by Refusing to a Modification of a Release

Insurer Can Breach Duty by Refusing to a Modification of a Release Woodland hills personal injury lawyer Barry P. Goldberg analyzes insurance company obligations particularly involving ‘Releases.” Mr. Goldberg recently...more

“Red Herring” or “Alternate [U-verse]”? Court Allows Cable Network to Go Beyond Written Contract in Claims Against Distributor

2015 and 2016 saw a wave of transactions among cable, satellite, and other linear programming distributors: AT&T & DirecTV, Altice and Suddenlink, etc. That transactional wave is beginning to spawn a litigation wave,...more

Insurance News, Summer 2016

Eight Years after Bi-Economy and Panasia, What is the Law of Bad Faith in New York? Prior to 2008, the law of bad faith in New York seemed fairly well established. A claim for bad faith against an insurer, which might...more

Bad Faith Actions for Excess Judgments….is There Trouble Brewing for Recalcitrant Primary Insurers

Can an excess carrier go ahead and fund an excess primary limits settlement and then assert a claim for bad faith against the primary insurer who previously refused to accept and fund a prior in-limits policy demand? On...more

Excess Insurer Can Sue Primary for Failing to Settle Within Limits Even Without Entry of Excess Judgment

In Ace American Ins. Co. v. Fireman's Fund Ins. Co. (No. B264861, filed 8/5/16), a California appeals court held that an excess insurer that contributes to the settlement of an underlying case due to the primary insurer’s...more

After Favorable LIBOR Ruling from the Second Circuit, Investors Now Allege Anticompetitive SIBOR Manipulation

On July 5, 2016, investors filed a federal class action in the Southern District of New York alleging defendant banks had manipulated the Singapore Interbank Offered Rate (SIBOR) “and/or” Singapore Swap Offer Rate (SOR)...more

Great expectations? Let’s start with reasonable expectations

Expectations are a funny thing. They can be good in that they set forth an objective measure for expected performance, goals and standards of conduct. On the other hand, they can turn bad if they are unreasonable, or if they...more

Delaware Chancery Court Dismisses Challenge to MLP Drop Down Transaction

The Delaware Chancery Court recently dismissed a challenge to a transaction in which a master limited partnership (the "MLP") repurchased an interest in a crude oil pipeline in 2015 previously sold to its general partner (the...more

Court Upholds Allegedly Unfair Master Limited Partnership Transaction

When alternative entities first came into prominence, questions arose concerning the applicability to them and their stakeholders of corporate law fiduciary duty jurisprudence. Eventually the Delaware General Assembly amended...more

Court Dismisses Fiduciary Claim Between Mortgagor and Mortgagee

In Fornesa v. HSBC Bank USA, N.A., plaintiff sought a damage award against a defendant mortgagor for compensatory and punitive damages, based on alleged predatory lending practices. 2016 Bankr. LEXIS 2011 (S.D. Tex. May 13,...more

Policyholder’s Bad Faith Claim Against Cyber-Insurer Survives Summary Judgment

In follow up on an older entry, the Court in Travelers Prop. Cas. Co. of Am. V. Fed. Recovery Servs., recently issued another order granting partial summary judgment in favor of a cyber-insurer, but also allowed the bad faith...more

How to Protect Your Company’s Social Media Currency

Today’s companies compete not only for dollars but also for likes, followers, views, tweets, comments and shares. “Social currency,” as some researchers call it, is becoming increasingly important and companies are investing...more

The Gloves Are Off: Competing Biopics Battle For Hollywood Purse

Hollywood’s heavy-hitters often enter the ring over unauthorized biographies. Elizabeth Taylor famously invoked her rights of publicity and privacy in an attempt to shut down an unofficial docudrama about her life; Clint...more

YouTube Rulings Emphasize the Importance of an OSP’s Terms of Service in Social Media Marketing

Two recent cases serve as a reminder of the key role an online service provider’s (OSP) terms of service play in social media marketing. The courts in Darnaa, LLC v. Google, Inc., 2015 WL 7753406 (N.D. Cal. Dec. 2, 2015) and...more

He’s got 99 Problems, But a Breach Might Be One

In the wake of 2016, Jay-Z faces an $18 million lawsuit for his failure to publicly appear and promote his signature fragrance line, as he was contractually obligated. 2009 marked the start of a budding licensing relationship...more

Corporation Owes No Duty To Warn Former Director Of Impending Option Expiration

Does a corporation commit constructive fraud if it fails to warn a former director of the impending expiration of a stock option? That was one question decided earlier this month by Judge Jennifer A. Dorsey in Nelson v....more

Insurance Recovery Law - January 2016

Despite Finding Policy Application Misrepresentation, Jury Rules Against Policy Rescission - Why it matters: A federal jury concluded that Starr Surplus Lines Insurance Company did not have a valid basis to rescind the...more

Donald L. Myles, Jr. and Ashley Villaverde Halvorson Prevail on Motion for Summary Judgment for Mid-Century Insurance Company...

Donald L. Myles, Jr. and Ashley Villaverde Halvorson recently prevailed on a motion for summary judgment for Mid-Century Insurance Company (Farmers), and were successful in limiting damages from a $3.3 million stipulated...more

‘LightSquared’: Defining the Permissible Boundaries of Plan Injunctions

On Oct. 7, 2015, the U.S. District Court for the Southern District of New York vacated a plan injunction that had been approved by the Bankruptcy Court in the Chapter 11 cases of LightSquared and certain of its affiliates...more

The Argument for Utmost Good Faith in Property Insurance

The term “bad faith” is commonly understood as a breach of the implied duty of good faith and fair dealing recognized in insurance contracts due to the “special relationship” between an insured and an insurer. Breach of this...more

Can Insurers Sue for 'Reverse Bad Faith'? Allowing claims would restore strategic balance in policy disputes

The insurance relationship is contractual, but when policyholders claim insurers failed to honor their obligations, they typically invoke the tort of "bad faith." When courts try to explain this anomaly, they cite features of...more

Washington State Court Upholds Termination For Convenience Clause in Subcontract – Partial Performance Provides Adequate...

SAK & Assocs. v. Ferguson Constr., Inc., 189 Wn. App. 405 (Wash. Ct. App. 2015) - Ferguson Construction, Inc. (“General Contractor”) entered into a fixed sum contract (the “Subcontract”) with SAK & Associates...more

Quadrant Structured Prods. Co. v. Vertin, C.A. No. 6990-VCL (Del. Ch. Oct. 20, 2015) (Laster, V.C.)

In this post-trial decision, the Court of Chancery held that a company’s repurchase of senior notes from an insider approximately six months after returning to solvency did not violate the express or implied terms of the...more

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