Savage v. Educators Insurance Co
In Savage v. Educators Insurance Co., 908 P.2d 862 (Utah 1995), a school bus driver who was insured under an Educators policy purchased by her employer sued the insurance company for allegedly acting in bad faith by resisting to compensate her for medical expenses she had incurred.
Recognizing that "the duty of good faith and fair dealing is a contractual covenant, one that arises solely as an incident to contractual obligations owed by an insurer to its insured," Chief Justice Zimmerman's 4-1 opinion, from which Justice Durham dissented, flatly rejected the plaintiff's contention that she had standing to sue. Id. at 866.
The Court held:
"Because Savage has no contractual relationship with Educators, she has no cause of action against it for breach of the covenant of good faith and fair dealing. This conclusion is consistent with the commentators and the great majority of courts in other jurisdictions . . . ." Id.