Farr v. Transamerica Occidental Life Insurance Co
In Farr v. Transamerica Occidental Life Insurance Co. (Ariz.App. 1984) 145 Ariz. 1, a jury awarded damages to an insured in an action against the insurer and a claims administrator for tortious bad faith refusal to pay insurance benefits under a group health policy.
The trial court granted judgment notwithstanding the verdict to the claims administrator on the ground that it was not a party to the insurance contract, but the appellate court reversed and reinstated the verdict. (Farr, supra, 145 Ariz. at pp. 10-11.)
The court held that under Arizona law, a joint venture was established between a claims administrator and an insurer when the claims administrator "issued certificates of coverage, billed and collected premiums, handled the investigation of claims, and distributed brochures to induce the purchase of policies." (Id. at p. 11.)