Opinion ID: 350072
Heading Depth: 2
Heading Rank: 1

Heading: Bodily Injury, sickness or disease,

Text: 6 arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, and the company shall defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent . . . . 7 R. 14, Pltfs. Exhibit C, J.App. 28 (emphasis added). The policy also made the company liable for 8 Supplementary Payments: To pay, in addition to the applicable limits of liability: 9 (a) all expenses incurred by the company, all costs taxed against the insured in any such suit and all interest on the entire amount of any judgment therein which accrues after entry of the judgment and before the company has paid or tendered or deposited in court that part of the judgment which does not exceed the limit of the company's liability thereon. 10 Id. (emphasis added). 11 Shortly after the accident negotiations for a settlement were commenced. Since it appeared to all concerned that the DeWeeses' liability would exceed their policy limit, they retained separate counsel. Glens Falls then sought to avoid any duty to defend by tendering to Knippen the full $50,000. This offer was refused. Subsequently, a diversity suit was filed by Knippen in the district court against the DeWeeses and the Ford Motor Company, the manufacturer of the car. On January 10, 1974, Glens Falls' attorney and the DeWeeses signed a letter agreeing that Glens Falls would pay the policy limits in the event of a judgment or settlement of at least that amount, and that Glens Falls would withdraw from the defense of the case. 1 12 On May 27, 1975, on the basis of a jury verdict, the district court entered judgment against the DeWeeses for $300,000 but ordered that Ford shall pay $250,000 of that amount. R. 14, Pltfs. Exhibit A. In a separate appeal, this court affirmed the judgment against Ford and the trial court's entry of summary judgment for the defendants on the claim for punitive damages. Knippen v. Ford Motor Company, 178 U.S.App.D.C. 227, 546 F.2d 993 (1976). 13 On July 18, 1976, Glens Falls forwarded to Knippen a draft in the amount of $50,000. Because a letter forwarded with the draft stated that it was tendered in full and final payment of the verdict against the DeWeeses, R. 16, Defts. Exhibits E-F, J.App. 68-69, Knippen refused it. On September 2, 1975, the DeWeeses petitioned the district court to accept the check in full and final payment of the judgment against them. On September 15, 1975, the district court by order denied this request and clarified its original judgment by stating that the DeWeeses and Ford were to be jointly liable to the extent of $250,000, and that the judgment included interest and costs. R. 14, Pltfs. Exhibit B. Knippen subsequently demanded that Glens Falls remit to him not only the $50,000, but also costs and interest on the entire $300,000 judgment from the date of its entry. On October 22, 1975, Knippen filed the present diversity action against Glens Falls in the district court, seeking this recovery. Glens Falls made an unconditional tender of $50,000 on October 25, 1975, and Knippen accepted it. By order on April 30, 1976, the district court entered summary judgment awarding Knippen costs and interest on the entire judgment from May 27, 1975, to October 25, 1975. 2 Glens Falls appeals. 3