Opinion ID: 1793652
Heading Depth: 1
Heading Rank: 5

Heading: hartford's duty to settle this case

Text: Very little sympathy can be felt for an insurance carrier which finds itself as Hartford does in this case. Hartford's local agent either knew, or certainly should have known, that Foster needed more coverage than what he had. Yet there is nothing in this record to suggest that prior to the accident there was any inclination whatever to advise Foster on his needs, and the coverage Hartford had available. Had either Hartford or its local agent exercised any such responsibility, they would have at least advised Foster that his insurance coverage was inadequate. It is equally well-known that the difference in premium between a minimum and a much greater coverage is modest. Any insurance company which permits its local agents to indiscriminately sell liability coverage with no effort whatever to inform its insured of all the coverage it offers should have this factor weighed in any subsequent bad faith lawsuit resulting from inadequate coverage. The fact remains that there is nothing in this case supporting bad faith on the part of Hartford's decision not to accept the offer of settlement. There can be no negligence or bad faith attributed to Hartford's assessment of the settlement value of this case. Hartford made a realistic evaluation. [4] The only asset of Sims's case was the dreadful injury to his arm. No insurance company should be faulted, however, regardless of the plaintiff's injuries, for not paying a claim when it has every reason to believe its insured was not at fault. In so doing it may upon occasion lose (as Hartford did here), but this is a far more salutary practice than encouraging insurance companies to pay off every dubious claim in which the injuries happen to be serious. Of course, a serious question of liability coupled with serious injuries is an entirely different matter. This certainly is not this case. The first offer to settle before the trial started was for $45,000, which was reduced to $40,000-$35,000, and finally to $30,000. This indicated both that Hartford's assessment was realistic, and that the trial had gone well for the defendants. The attorneys did not think the case was worth the $25,000 in settlement, and solely as a precaution against what to them was a remote possibility that the verdict might exceed policy limits, recommended this sum. The highest figure Williamson thought the jury would ever give was $15,000-$18,000. The circuit clerk thought it would be a verdict for the defendants. [5] Also is the fact that Hartford stood to lose by refusing the settlement offer, just as Foster did. This was not an offer to settle for the policy limits. Hartford did lose an additional $20,000 by not accepting the final offer. Foster lost $30,000. Also, Hartford paid all appeal costs, penalty and interest on the entire judgment, which would suggest that ultimately Hartford and Foster each were damaged in approximately the same sum by Hartford's not accepting the $30,000 offer. It is likewise significant to us that Harris, whose testimony in the first trial showed he was not negligent, did not testify in this trial, thus indicating that he had no quarrel with Hartford's assessment. Finally, the fact that Hartford, following the final judgment, promptly offered to pay the policy limits, was evidence of good faith on its part in trying to protect Foster. Cousins v. State Farm, supra, 294 So.2d at 275; Fertitta v. Allstate Ins. Co., 439 So.2d 531 (La. App. 1983), clarified, motion denied 441 So.2d 1250 (La. App. 1983), affirmed 462 So.2d 159; Samson v. Transamerica Ins. Co., 30 Cal.3d 220, 178 Cal. Rptr. 343, 636 P.2d 32 (1981). There have been many decisions in which insurance companies have been held liable for bad faith refusal to settle. 40 A.L.R.2d 168-264, Later Service, 1980 (Supp. 1986). Also, cases cited in 7 Am.Jur.2d Automobile Insurance, §§ 383-388; and Appleman, supra, §§ 4712-4713. There is no need for further examination of such decisions than we have made, however, because no criterion supports a holding in this case that Hartford acted negligently or in bad faith in its assessment value of the case. Moskau v. Insurance Co. of North America, 366 So.2d 1004 (La. App. 1978); Tank v. State Farm Fire Cas. Co., 38 Wash. App. 438, 686 P.2d 1127 (1984).