Practitioners have noticed, and have been puzzled by, a schism in the Supreme Court of Hawai`i’s rulings on attorneys’ fees in bad faith actions.  At least one case held that a bad faith action was in the nature of assumpsit and, thus, awarded fees to the insurer from the insured.  Six months later, another case, without discussing the first case, came to the opposite conclusion.

Adding more flame to the fire, the Hawai`i Supreme Court recently denied cert in Jou v. Argonaut Ins. Co., 2007 Haw. LEXIS 367 (2007).  The ICA granted attorneys’ fees in a claim for bad faith claim, tortious interference with a prospective business advantage claim, and statutory tort claim under HRS § 663-1 (Supp. 1997).  In a dissent to the denial of the cert claim, Justice Acoba concluded that all of the claims sounded in tort, instead of assumpsit.

Obviously a denial of cert is not conclusive, but the Supreme Court’s refusal to address this issue only cautions an insured to be very careful before alleging bad faith against an insurer.