Court Opinion

ID: 9466448
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:16:05.838288+00
Date Added: 2024-06-11T17:39:44.396581
License: Public Domain

LAY, Chief Judge, concurring and dissenting:
I concur in Judge McMillian’s opinion to the extent of the judgment affirmed; however, I feel the district court also should be upheld on the assessment of penalty for vexatious refusal to defend and pay the claim. The trial court’s reasoning that the defendant’s conduct was vexatious is not clearly erroneous. Judge Wangelin found:
*166(1) The president of the local agency falsely reported the existence of an agreement between the plaintiff and his attorney on the one hand and the local agent on the other that there was no coverage under the policies. When pressed on this point in his deposition the local agent became extremely evasive before finally admitting the falsity of his report. The Court considers the false blind postscript strong indicia of an intent to evade liability.
(2) When defendant’s Senior Adjuster advised the local agent by letter of July 22, 1974, “at this time it would be premature to advise the assured that there is no coverage . . . ” defendant then requested the plaintiff and its attorney to make further investigation. Plaintiff and his attorney then undertook the additional expense and inconvenience of an investigation and responded by letter dated August 7, 1974. Long after the receipt of that letter the defendant denied liability on August 29, 1974 on the grounds of no coverage. Thus, after requesting additional investigation and documentation from plaintiff, when it already had before it all the material facts, defendant then denied liability on grounds not now relied upon by them. In what this Court can only consider a willful effort of the defendant to evade its obligation, defendant, after it discovered Senior Adjuster Jeronimo’s letter of August 29, 1974 waived the defenses it then sought to assert, filed an affidavit by the Senior Adjuster denying the clear meaning of the Senior Adjuster’s letter. (Emphasis added.)
On this basis I feel the penalty should be enforced.