Thomas A. Cary and Beth Hanna v. United…

Summary

The court held that a third-party administrator of a self-funded health plan may owe an insured an independent tort duty of good faith and fair dealing despite the absence of contractual privity. Because the administrators controlled claims decisions, performed insurer-like functions, and bore some financial risk, Cary was entitled to pursue his bad-faith claim, subject to proving unreasonable conduct and the required culpable mental state. The court reversed and remanded for further proceedings and vacated the costs award. Justice COATS, joined by Justice KOURLIS, dissented, arguing that the majority improperly created a new policy-based duty unsupported by contract, statute, or established common law.