5.1.2 Directed Verdict Test

• Jurisdiction: Arizona

The Arizona courts have rejected the "directed verdict test" for determining bad faith liability.^[62] Under this test, if the trial court is unable to grant a directed verdict in favor of the insured on the contract issue, the claim is "fairly debatable" as a matter of law.^[63] Put a different way, where there is a genuine issue of law with respect to the insurance company's denial of the claim, which precluded a directed verdict for the insured, the insurance company was entitled to a directed verdict on...