Safeco Ins. Co. v. Masood

While there is an implied duty to act in good faith, no additional contract terms may be added to a contract unilaterally, including the inclusion of a confidentiality agreement.

Masood’s house was destroyed by a fire. At the time, he was party to an insurance contract with Safeco, who provided security to his residence while it was being cleaned up. When Masood returned, $3.5 million in personal property had been stolen, which he alleged took place after the fire. Safeco undertook an investigation and requested extensive personal information from Masood; the contract required the insured to prepare an inventory of lost property, provide records and documents on request, and submit to examinations under oath. Masood drafted a confidentiality agreement to accompany this information, to which Safeco did not agree. Safeco filed for a declaration that they were entitled to the information. The trial Court granted summary judgment in Safeco’s favor. On appeal, Masood argued he had a contractual right to require Safeco to enter a confidentiality agreement because the information was “sensitive,” there was an implied duty of good faith and fair dealing, and that a contract must be construed consistent with the understanding of an “ordinary” insured. The Court held that while there is a duty to act in good faith, there were no additional restrictions that could be imposed on Safeco outside the contract. Affirmed.