Braesch v. Union Ins. Co

In Braesch v. Union Ins. Co., 237 Neb. 44, 464 N.W.2d 769 (1991), disapproved on other grounds, Wortman v. Unger, 254 Neb. 544, 578 N.W.2d 413 (1998), the Nebraska Supreme Court stated that cases involving first- or third-party plaintiffs and an insurer require something more than negligence; some intentional wrongdoing is required. Specifically, the court held: "'"Good faith implies honesty, fair dealing and full revelation. . . . Bad faith implies dishonesty, fraud and concealment. . . . Neither mistaken judgment nor unreasonable judgment is the equivalent of bad faith. . . ."'" 237 Neb. at 56, 464 N.W.2d at 777. The Braesch court concluded that "a requirement of intentional or reckless conduct arises from the commonsense notion that 'the insurer . . . must be accorded wide latitude in its ability to investigate claims and to resist false or unfounded efforts to obtain funds not available under the contract of insurance.'" 237 Neb. at 58, 464 N.W.2d at 778. In Braesch, the court further stated: "To show a claim for bad faith, a plaintiff must show the absence of a reasonable basis for denying benefits of the [insurance] policy and the defendant's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. It is apparent, then, that the tort of bad faith is an intentional one. "Bad faith" by definition cannot be unintentional."