Farr v. Transamerica Occidental Life Ins. Co
In Farr v. Transamerica Occidental Life Ins. Co., 145 Ariz. 1, 699 P.2d 376 (App. 1984), the Court recognized a plaintiff could recover emotional distress damages in an action against an insurer for breach of the implied covenant of good faith and fair dealing in the administration of an insurance claim. 145 Ariz. at 7, 699 P.2d at 382.
Relying on case law from California, the Court held once a plaintiff has proven a loss of property in such a case, he or she can also recover damages for emotional distress because "mental distress is compensable as an aggravation of the financial damages, but not as a separate cause of action." Id.