Originally published in "Fidelity & Surety Law Committee Newsletter" by ABA (Winter 2010)

In 1984 the Ohio Supreme Court became one of the first courts to articulate what at first blush appeared to provide the legal basis for separate tort claims against sureties for alleged bad faith, and that decision was relied upon by courts in other jurisdictions that were inclined to recognize a similar cause of action. However, two recent federal decisions have severely limited the availability of such claims in Ohio by examining the factual and legal basis of that initial Ohio Supreme Court decision and then ruling that bad faith claims were not available to an obligee and a bond principal. Those cases also call into question a surety bond claimant’s right to bring a bad faith claim, as evidenced by a recent Ohio state court case in which a claimant voluntarily dismissed its bad faith claim after being served with a summary judgment motion based on those cases.

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