finding that acts are committed in bad faith when the actor chooses a course of action “without a reasonable basis or with knowledge or reckless disregard of the lack of a reasonable basis” for the choice
How later courts described this case
- finding that acts are committed in bad faith when the actor chooses a course of action “without a reasonable basis or with knowledge or reckless disregard of the lack of a reasonable basis” for the choice
- noting that “[n]o officer has the ‘rightful prerogative’ to engage in a malicious battery of a handcuffed citizen who is neither actively resisting arrest nor seeking to flee,” and holding that Nevada’s discretionary immunity statute did not apply to arrestee’s claim of battery where officer slammed handcuffed arrestee into wall multiple times and punched him in the face
- refusing to recognize a discrete cause of action for the negligent infliction of emotional distress involving the tortious delay' or denial of workmen’s compensation'claims, and stating that emotional distress is more appropriately treated as an element of damages rather than a separate cause of action itself
- refusing to find bad faith where insurance company investigated damage and requested documents, despite insured’s argument that investigation was incomplete
Written by the judges who cited it.
The opinion
Springer, J.,
dissenting:
Each of the plurality opinions would reverse the judgment of the trial court and restore Falline’s tort actions. I cannot agree with either opinion; I think the judgment of the trial court should be affirmed.
I would afiirm because I believe that Falline has not properly stated any tort claims in his pleading. This being so, I see no purpose in taking a position on the differences of opinion expressed in the two plurality opinions. These issues, in my opinion, will not be ripe for consideration unless and until the pleading is put in proper order.
As indicated, I dissent from the majority’s restoration of Fal-line’s negligence and bad faith claims because in my view Fal-line’s amended complaint does not state a claim upon which legal relief can be granted.
*1016 The first difficulty that I have with Falline’s pleading is that although Gibbens is described as an agent of GNLV, there is no imputation as to how the principal and agent are involved in the tortious conduct alluded to in the complaint. The charging allegation refers generally to “defendants”; and, although it appears from a reading of the record that Falline is trying to accuse Gibbens of tortious misconduct and to charge GNLV as a principal under the doctrine of respondeat superior, this is anything but clear in the amended complaint.
The thrust of Gibbens’ position is more clearly manifested in one of its legal memorandums: “Gibbens Company, Inc. administers the claims and makes the determination of when benefits are paid or not to be paid.” Gibbens, then, is “an agent of the employer [GNLV] for the purposes of determining whether or not the employer is obligated to pay any benefits and if so, in what amount.” Mottola v. R. L. Kantz & Co., 199 Cal. App.3d 98, 108 , 244 Cal.Rptr. 737, 742 (1988). The negligence or bad faith charged in this case was necessarily committed by Gibbens in the process of making the “determination of when benefits are paid or not to be paid.” Falline charges that in making this “determination” Gibbens 1 not only acted “negligently, grossly negligently, carelessly, willfully and maliciously,” the claims administrator also “breach[ed] the obligation of good faith and fair dealing by a negligent and intentional failure to pay benefits when due.” I would not permit negligent or intentional tort actions in this case to proceed on the present pleading because the capacities of the parties are so ill-defined as to give the defendants inadequate notice of the nature of the action against them.
Sufficiency of the Negligence Claim for Relief
It does not appear to me that Falline has stated a negligence claim against Gibbens. Ordinarily the making of administrative decisions such as granting or refusing industrial accident claims does not result in tort liability. These decisions are discretionary in nature and do not involve the type of activity out of which negligence claims ordinarily arise. The exception to this rule is found in the case of Rush v. Nevada Industrial Commission, 94 Nev. 403 , 580 P.2d 952 (1978), in which a claim for negligent *1017 decision-making was allowed when the Nevada Industrial Commission (predecessor to SIIS) negligently delayed claims processing in such a way as to cause a claimant to lose his eye. 2
There is no averment of facts in the amended complaint that would disclose or give any hint as to what negligent conduct Gibbens might be charged with doing. The claim of negligence is simply that Gibbens was somehow guilty of a negligent refusal to pay Falline. The plaintiffs’ charging allegations do not put the defendants on notice in any way as to the manner in which they were supposed to have breached their duty of due care. This case is far different from the suggested averment provided in Form 9, NRCP, which authorizes an injured traffic victim to aver that a defendant “negligently drove a motor vehicle against plaintiff who was then crossing said highway.” In the Form 9 type of pleading, the defendant is put on notice that he or she is charged with driving a motor vehicle in a negligent manner into a pedestrian at a specified place. Although the exact nature of the defendant’s untoward conduct is not described, certainly the defendant is put on notice as to what he or she did and where and when. Here, the defendants are not given a clue as to the nature of their supposed negligent decision-making. It would appear that a Rush type of action might possibly have been contemplated, but the mere allegation of negligent refusal to honor a claim does not, in my opinion, state a valid tort claim against Gibbens. If Falline has a Rush-like claim against Gibbens, he should be allowed to plead it properly. Upon remand to the district court, the court might then grant leave for Falline to plead a proper negligence claim if he is aware of facts to support such a claim. Thus far, none appears. Any vicarious liability on the part of GNLV must, of course, depend on the sufficiency of the claim against Gibbens. Further, I have a serious question in my mind as to whether vicarious liability can be imposed at all on a self-insured employer for negligent acts of a claims administration contractor.'
Sufficiency of the Bad Faith Claim for Relief
Falline charges that the “defendants” are guilty of “a breach of the obligation of good faith and fair dealing by a negligent and intentional failure to pay benefits when due.” Again, although Falline charges both defendants, it appears to me that the Gibbens Company, as administrator, is the actor, the “refusor,” who has *1018 actually done the deed that forms the predicate for this intentional tort action.
Because one cannot be guilty of both “a negligent and intentional failure to pay,” I must assume for the purposes of this opinion that what we are dealing with here is a charge that Gibbens’ conduct in refusing the Falline claim rendered it guilty of “a breach of the obligation of good faith and fair dealing by . . . intentional failure [refusal] to pay benefits when due.” (My emphasis.)
As I see it, there are a number of difficulties associated with creating in this jurisdiction a new intentional tort called “breach of the obligation [not covenant] of good faith and fair dealing,” a tort that was, according to the averments of the amended complaint, committed by “intentional failure to pay benefits when due.” (My emphasis.)
The new, “breach-of-obligation” tort proposed by Falline is, I take it, some relation to tortious breach of the implied covenant of good faith and fair dealing that is a part of every contract. I first wonder if there is a contract in this case from which the implied covenant can be derived. Neither defendant is in the insurance business; neither charges premiums; neither enters into an insurance-like contract with industrial claimants. I realize that other jurisdictions have recognized torts which arise out of an “obligation” of good faith; but, to me, presently at least, this “obligation” is of unknown and, in Nevada, unprecedented origin. I would like to know more about this new tort before I rule in favor of the creation of such a tort in Nevada. These matters should be dealt with at the trial level.
Assuming that a breach of the “obligation” referred to by Falline can be turned into something analogous to the bad faith tort in insurance cases which was recognized in United States Fidelity v. Peterson, 91 Nev. 617 , 540 P.2d 1020 (1975), I certainly doubt that a mere intentional failure to pay when due is alone sufficient to state a claim for an intentional tort. In Peterson, as I view it, the basis for these kinds of tort actions are insurance companies’ refusing without proper cause to honor insurance claims after having knowledge that the claims are valid. It is not clear to me what Falline’s allegation of “intentional failure to pay benefits when due” comprises, but it occurs to me that there might be a variety of non-tortious reasons why an insurance company might jai/ to pay a claim when due. If Falline had charged Gibbens with actual knowledge that Falline had a valid claim and that, despite such knowledge, Gibbens consciously decided to deprive Falline of the benefits to which it knew he was entitled, then we might be approaching the presence of ingredients out of which an intentional tort might be made.
*1019 Even if an intentional tort had been legally pleaded, GNLV, of course, would not be responsible for the tort as pleaded because, as a principal, apparently GNLV did not participate actively in the wrongful administrative decision-making process engaged in by Gibbens, and which is claimed to constitute an intentional tort.
As said, I think the trial judge acted properly in dismissing the negligence and bad faith tort claims because the amended complaint fails to state tort claims upon which relief can be granted. I would affirm the judgment of the trial court.
Although Falline’s charging allegations refer to “defendants,” it is clear from a reading of the record that the allegedly negligent conduct complained of is that of Gibbens as administrator and decision-maker and that any liability on the part of GNLV is vicarious and necessarily arises solely out of its capacity as a principal. My reading of the record does not reveal that GNLV took an active part in turning down Falline’s claim but, rather, that it was merely following and adopting the administrative decisions of the Gibbens Company. It does not appear to me from the record in this case that GNLV acted in a manner that could be properly termed negligent or in bad faith.
Rush holds only that the industrial compensation statute does not preclude a claimant’s pursuing a negligence action against the state commission for damage resulting from tardy handling of a claim. The question of negligent exercise of discretionary decision-making powers as against negligent operational performance (tardiness in acting on a claim) was not discussed or decided.