Franks v. United States Fidelity & Guaranty Co

In Franks v. United States Fidelity & Guaranty Co., 149 Ariz. 291, 718 P.2d 193 (App. 1985), the Court recognized bad faith is a separate tort, and not a direct or natural consequence of a compensable workers' compensation injury. In that case, an injured worker sued his employer's workers' compensation insurer for breach of the duty of good faith and fair dealing. Id. at 293, 718 P.2d at 195. The worker accused the insurer of failing to make adequate disability compensation payments, delaying payment of disability benefits, and terminating or denying benefits without adequate information. Id. In addition to punitive damages, the worker requested damages for mental and emotional distress and loss of use of compensation and medical benefits. Id. The insurer asserted the court did not have jurisdiction to address the worker's claim because of the exclusive remedy provisions of the Workers' Compensation Act. Id. at 294, 718 P.2d at 196. The Court rejected that argument, holding the worker's bad faith claim constituted a completely independent tort cause of action and was, thus, not within the purview of the exclusivity provision. Id. at 296, 718 P.2d at 198.