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Abstract

In Hoskins v. Aetna Life Ins. Co., the Ohio Supreme Court imposed on insurers a good faith duty in any refusal to pay claims made by their insured. Its decision placed Ohio among a growing number of jurisdictions that have recognized this good faith duty. The court adopted its rationale by relying heavily on existing insurance case law in the refusal-to-settle third-party claims type actions. The court defined the standard of good faith in terms of a reasonable justification by the insurer in refusing to pay a claim "because it believed there was no coverage of the claim." The court distinguished between conduct which is tortious and that which is malicious, and it is the latter that must be shown before punitive damages may be assessed. Under the court's criteria for malicious conduct, the insurer must exhibit affirmative action in the performance of his contractual obligations that was an intentional wrongdoing specifically meant to harm the insured. The court relied on this distinction finding that the plaintiff had failed to show actual malice justifying punitive damages. However, it was not expressly stated in the court's opinion whether a breach of good faith which is not malicious will permit the plaintiff any additional remedy beyond the expectations of the contract.

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