Calif. Federal Judge: Cedent May Not Recover in Tort

LOS ANGELES - In a matter of first impression, a California federal judge ruled that cedents may not recover in tort for a reinsurer's alleged breach of the implied covenant of good faith and fair dealing. California Joint Powers Insurance Authority v. Munich Reinsurance America Inc., No. 08-00956 (C.D. Calif.).

On April 21, Judge Dale S. Fischer of the Central District of California dismissed a self-insured retention pool's claim for punitive damages against Munich Reinsurance America Inc. (See HarrisMartin's Columns: Reinsurance, April 2008).

In 1978, the City of Rancho Palos Verdes imposed a moratorium on development due to concern …