William Monahan and Lisa Monahan v. Gmac Mortgage Corporation, Allstate Insurance Company and the Holden Agency, Inc.

Summary

The court affirmed the compensatory and consequential damages awarded for breach of the implied covenant of good faith and fair dealing because the evidence permitted reasonable inferences that GMAC failed to act diligently, communicate with plaintiffs, and fairly remedy its escrow breach. It vacated the punitive damages award because GMAC's conduct, while potentially constituting bad faith or unfair dealing, did not establish actual malice. It reversed and remanded the attorney-fee award because the trial court relied on substantive bad faith rather than identifying litigation-related misconduct or another sufficient basis for departing from the American Rule.