Gruenberg v. Aetna Insurance Co.

510 P.2d 1032 (1973)

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Nature of the Case

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Facts

Gruenberg (P) was the owner of a cocktail lounge and restaurant known as the Brass Rail. The premises were insured for $35,000 from three different insurance companies. A fire occurred, and an insurance adjuster stated that the premises were insured for more than their value. P was charged with arson, but the charges were eventually dismissed for lack of probable cause. During that period, the insurance companies had demanded that P submit to examination of them under oath. P was advised by his attorney not to do so and that the insurance companies waive that requirement while criminal charges were pending. P then told the insurers that he was ready to submit to examination, but they maintained that they were relieved of liability. P sued them and filed a suit based on tort for breach of an implied duty of good faith and fair dealing. That suit was dismissed from a general demurrer by the insurance companies. This appeal resulted.