Opinion ID: 1790179
Heading Depth: 1
Heading Rank: 3

Heading: Bad-faith-offer-to-settle claim

Text: In the third amendment to the original complaint, Mrs. White, as representative of the estate of Mr. White, added a claim of bad faith in regard to an offer of settlement made by the agent of Georgia Casualty and authorized by Georgia Casualty. The complaint alleged that on or about June 22, 1984, Georgia Casualty had admitted in correspondence to its agent that the settlement value of the claim was $10,000, but it had authorized its agent to settle at or below $7,500. Mr. White died in October 1987. A claim sounding in tort for which no action has been filed does not survive death in favor of the personal representative. Gillilan v. Federated Guar. Life Ins. Co., 447 So.2d 668, 674 (Ala.1984). Because the conduct of Georgia Casualty alleged to constitute a bad faith offer to settle occurred during Mr. White's lifetime, the question becomes whether the amendment adding this claim relates back to an earlier pleading made during Mr. White's lifetime. Georgia Casualty contends that the bad-faith-offer-to-settle claim, first alleged in the third amended complaint, is barred by the survival statute, because, it says, that claim does not relate back, under Rule 15(c), A.R.Civ.P., to the original complaint, or amendments, filed before Mr. White's death. We agree that it does not relate back. For an amendment to relate back to the original pleading, the claim asserted in the amendment must have arisen from the same conduct, transaction, or occurrence set forth in the original pleading. A.R. Civ.P. 15(c). Therefore, our inquiry is whether the occurrence set out in the third amendment arose from the same incident set forth in the pleadings filed prior to Mr. White's death. In the first amendment to the complaint, the Whites alleged that on or about August 29, 1984, Georgia Casualty had worked a fraud upon them by representing that the claim limit was $10,000 per person, when, the Whites alleged, Georgia Casualty believed that Mr. White was entitled to stack and, therefore, believed that the amount available to Mr. White was $120,000. The third amendment, filed by Mrs. White as representative of Mr. White's estate, alleged that on or about June 22, 1984, Georgia Casualty, in bad faith, had offered to settle the claim for $7,500 when it believed the maximum amount due under the policy was $10,000. These two incidents are distinct in time. The Whites alleged that one incident, the alleged bad faith offer to settle, occurred on or about June 22, 1984, the date Mrs. White alleges Georgia Casualty authorized its agent to settle for $7,500 when it had admitted the claim was valued at $10,000, the maximum amount Georgia Casualty believed was available under the policy. The Whites alleged that the other incident, the alleged fraud relating to the representation that Mr. White was not entitled to stack, occurred on August 29, 1984, the date the Whites executed releases and accepted payment from Georgia Casualty for $10,000 each. Both incidents are alleged to have occurred before the decision of this Court in White I and before Mr. White's death. Also, the two incidents are distinct in the conduct alleged to be wrongful. The first amendment, filed before Mr. White's death, alleged that Georgia Casualty had fraudulently misrepresented the maximum amount Mr. White could recover as $10,000, the limit of the policy without stacking. The third amendment, filed after Mr. White's death, alleged that Georgia Casualty had authorized its agent to settle for $7,500, even though it had admitted that the value of the claim was $10,000, the limit of the policy. An amendment dealing with conduct arising from a separate transaction or occurrence will not relate back. 1 C. Lyons, Alabama Rules of Civil Procedure Annotated 256 (2d ed. 1986) (citing Roney v. Ray, 436 So.2d 875 (Ala.1983)). Therefore, the third amendment, regarding the bad faith offer to settle for $7,500, filed after Mr. White's death, does not relate back under Rule 15(c) because the fraud claim alleged in the first amendment, filed before Mr. White's death, and the bad-faith-offer-to-settle claim, filed after his death, are two distinct transactions, in time as well as in regard to the conduct alleged to be wrongful. Because the claim regarding the alleged bad faith offer to settle does not relate back to the original pleading or to the amendments filed before Mr. White's death, this action does not survive his death, under § 6-5-462, Ala.Code 1975.