Opening Brief for Appellant/Cross-Appellee - Appellate.net

This case does not even involve the pattern of stonewalling that the Willow
Inn Court viewed as “relevant, but with less force.” See 399 F.3d at 231. Willow
Inn was a bad-faith insurance coverage action. The defendant insurer owed the
plaintiff policyholder a fiduciary duty, and its refusal to respond to repeated
demands for reimbursement constituted a breach of the insurance contract, a
violation of Pennsylvania’s bad faith insurance statute, and a tort. Id. at 233. By
contrast, there is nothing in the least bit wrongful about Sunrise’s refusal to
respond to inquiries from CGB, a business with which it was engaged in an arm’s-
length relationship. Sunrise owed no duty to CGB, and certainly had no obligation
to discuss matters as to which CGB had already explicitly threatened litigation.
See JA461-462 (August 3, 1998 letter from CGB’s counsel to Tomes, suggesting
that the dispute would “go into litigation as, for example, a suit against you
personally and Sunrise, your employer, for tortious interference with contract”).
Thus, to the extent that the district court was referring to Sunrise’s alleged refusal
to return Brillman’s calls, its reliance on that conduct as a basis for punishment
was misplaced. Even if that refusal was impolite, it was not legally wrongful.
Nor can Sunrise be punished for refusing to settle this case, as the district
court implied (and as plaintiff’s counsel improperly argued to the jury). A party’s
decision to defend itself in court cannot be characterized as “stonewalling,” and
cannot form the basis for punishment. Cf. United States v. Jackson, 390 U.S. 570,
26