Opinion ID: 1171472
Heading Depth: 2
Heading Rank: 4

Heading: allstate insurance company v. hughes thorsness

Text: Prior to settling with Bohna, Allstate filed a cross-claim seeking indemnity from HT if Allstate were found liable to Bohna as a result of HT's actions. Allstate later sought indemnity for the $1 million it paid under the settlement agreement. We now turn to the issues arising out of Allstate's indemnity claim. 1. In a pre-trial hearing, the trial court determined that in order for Allstate to recover on its indemnity claim, Allstate had to be found fault free by the jury. The trial court made this determination based on our decision in Vertecs Corp. v. Reichhold Chems., Inc., 661 P.2d 619, 626 (Alaska 1983), where we held that implied indemnity was not available between concurrently negligent tortfeasors. Allstate maintains that the Vertecs rule does not apply to claims of implied contractual indemnity. HT argues to the contrary. However, when the parties filed their briefs, they did not have the benefit of our opinion on rehearing in Fairbanks North Star Borough v. Kandik Construction, Inc., 823 P.2d 632 (Alaska 1991). There we vacated that part of the original Kandik opinion which left undecided the applicability of comparative fault principles to implied contractual indemnity claims. We squarely held that the Vertecs rule applies in such cases. In other words, we held that a defendant cannot recover on an implied contractual indemnity claim unless he or she is completely fault free with respect to the underlying damages for which indemnity is sought. Kandik at 638. Thus, the trial court was correct in ruling that Allstate's indemnity claim was barred if Allstate were found to be responsible in part for Bohna's damages. 2. By a pre-trial order dated August 15, 1988, the trial court set January 13, 1989, as the deadline for filing motions to amend the pleadings. With HT's consent, Allstate amended its answer to assert its initial cross-claim after this deadline. Allstate and Bohna eventually settled on October 19, 1989. On October 26, 1989, less than one month before the start of trial, Allstate sought leave to amend its cross-claim to assert direct causes of action against HT. The proposed amended cross-claim would have added claims for breach of a lawyer's duty to a client, breach of contract, and breach of an agent's duty to a principal. The trial court denied Allstate's motion to amend as untimely and prejudicial. Allstate argues that the trial court abused its discretion [56] because Allstate's direct claims did not accrue until Allstate had suffered actual damage by settling with Bohna. Allstate also maintains that HT was not surprised or in any way prejudiced by the assertion of these direct causes of action. The trial court did not abuse its discretion in denying Allstate's motion to amend. Bohna initially brought suit against Allstate and HT on December 16, 1987. The trial court set January 13, 1989, as the deadline for filing motions to amend the pleadings. Allstate attempted to amend its cross-claim on October 26, 1989  over nine months after the filing deadline and only three weeks before a trial scheduled to last thirty days. In light of these facts, we hold that Allstate's motion to amend was properly rejected as untimely. [57] 3. Allstate next contends that the issue of whether it breached its implied covenant of good faith and fair dealing should have been allowed to go to the jury. Instead, the trial court ruled, as a matter of law, that Allstate had breached its covenant of good faith and fair dealing by 1) using excess offers of judgment in order to calculate Civil Rule 82 attorney's fees, and 2) not tendering policy limits. We affirm. As we recently recognized, where an adverse verdict in excess of policy limits is likely, an insurance company has the duty to determine the amount of a money judgment which might be rendered against its insured, and to tender in settlement that portion of the projected money judgment which [it] contractually agreed to pay. Schultz v. Travelers Indem. Co., 754 P.2d 265 (Alaska 1988) (per curiam). This duty required Allstate to offer Stevens a quantifiable dollar amount representing Allstate's obligation under the policy. See Providence Washington Ins. Co. v. Fireman's Fund Ins. Cos., 778 P.2d 200 (Alaska 1989). [58] On September 16, 1986, in a letter to Allstate, Powell estimated that the verdict value of the case to be no less than $3 million. Using the contested without trial portion of the Rule 82 table, Powell estimated that Allstate's obligation under the policy was no less than $162,680 plus costs. [59] Yet Allstate never offered Stevens a specific dollar amount of more than $50,000. Thus, the trial court was correct in ruling that, as a matter of law, Allstate breached its obligation of good faith and fair dealing. [60]