Opinion ID: 2059288
Heading Depth: 2
Heading Rank: 1

Heading: We couldn't, the demand was never made.

Text: When Liebowitz, after retrial had been ordered by the Appellate Division, advised Investors of the prospect of an adverse verdict of $500,000 and recommended the offering of $50,000 at an appropriate time, here was Mr. Scheer's response as he recalled it at trial below: Q. Did you make an offer? A. No. Q. Did you follow Mr. Liebowitz's advice? A. No. Apropos Investors' submission that it regarded the McLaughlin case one of questionable liability, and conceding that prescience is not expected of a carrier, we recall that we noted in Bowers, supra, that [a] decision not to settle must be a thoroughly honest, intelligent and objective one. It must be a realistic one when tested by the necessarily assumed expertise of the company. This expertise must be applied, in a given case, to a consideration of all the factors bearing upon the advisability of a settlement for the protection of the insured. While the view of the carrier or its attorney as to liability is one important factor, a good faith evaluation requires more. It includes consideration of the anticipated range of a verdict, should it be adverse; the strengths and weaknesses of all of the evidence to be presented on either side so far as known; the history of the particular geographic area in cases of similar nature; and the relative appearance, persuasiveness, and likely appeal of the claimant, the insured, and the witnesses at trial. Garner v. Am. Mut. Liab. Ins. Co., 31 Cal. App. 3d 843, 107 Cal. Rptr. 604, 607-608 (1973). In this connection we observe that no one associated with the McLaughlin case ever doubted that in the event of an adverse verdict, the damages awarded could greatly exceed the limits of coverage; and as to liability, the question is not whether the carrier, its attorney, or the insured considers a defendant liable but what the jury could be justified in finding from the evidence available and adduced. Cf. Board of Education v. Lumbermens Mut. Cas. Co., 293 F. Supp. 541, 547 (D.N.J. 1968), aff'd 419 F.2d 837 (3rd Cir.1969). It is not necessary to speculate whether the basis of Investors' odd attitude toward the McLaughlin case was based on an inbred or institutional cynicism about swimming or diving accidents, nor to seek its further motives, nor to further particularize the testimony below. That evidence forged a ponderous chain of circumstance which not only amply supported the finding of bad faith on the part of Investors, but would suggest wonder as to how the Court could have reached any other conclusion. This is particularly so when one considers the development of the law with respect to the fiduciary responsibilty of an insurance carrier toward its assured, in instances of judgmental choices such as existed here.