Court Opinion

ID: 9735908
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:36:34.418822+00
Date Added: 2024-06-11T18:27:02.780529
License: Public Domain

*62MORGAN, Justice
(concurring in result in part, dissenting in part).
I concur in the result of the first issue regarding bad faith (the first two issues raised in LeMars’ brief) and I dissent on the second issue regarding the subrogation rights (the last two issues in LeMars’ brief).
First I take exception to the language in the majority opinion that states LeMars’ knowledge “that Helmbolt would not have the finances to cover an excess judgment” is a factor to be considered in determining bad faith on the part of LeMars.
On the bad faith issue, as denominated by the majority opinion, I concur in the result only. In my opinion the majority chooses to ignore the simple fact that this lawsuit involves two separate and distinct contracts of insurance. Rather, the two contracts and their resultant duties are mixed together like the yolks of two eggs in a plate of scrambled eggs. While the majority extemporizes on the “catch-22” language of Olsons’ attorney’s letter, it fails to appreciate in the slightest degree the dilemma faced by LeMars.
The first policy that should be discussed is the liability coverage afforded Helmbolt. Under the facts in this case, I would agree that LeMars would probably be guilty of bad faith if they had an opportunity to offer the $50,000 limits of the liability coverage in full settlement and had failed to do so. But that is not the factual scenario in this case. LeMars did offer the liability limits in full settlement, but the offer was rejected. It is the demands of Olsons’ attorney upon which the majority relies, not that of Helmbolt’s attorney. The record reflects that Olsons’ attorney did indeed make some demand to the effect that Le-Mars settle for the limits of the combined coverages. Neither Helmbolt, nor his attorney, have any standing to urge payment of any coverage beyond the policy limits of the liability policy.
With respect to the underinsurance coverage afforded Olsons under their policy, I now point out the dilemma facing LeMars which the majority ignores. Any settlement arrived at under this policy automatically creates a subrogation claim for Le-Mars against Helmbolt by the clear language of the policy and by the provisions of SDCL 58-11-9.6, which provides: “The issuer of the underinsured motorist coverage shall be subrogated to any amounts it so pays, and upon payment shall have an assignment of the judgment against the other party to the extent of the money it pays.” (Emphasis added.) This hardly comports with LeMars’ duty to defend Helmbolt under his liability coverage. Under this fact situation I would find as a matter of law that no bad faith existed. The fact that the verdict exceeded the $100,000 combined limits is immaterial. The LeMars internal memos referred to damages only in sums of $60,000 to $80,-000.
Nevertheless, having pointed out what I believe to be adequate grounds to reverse the judgment, I must join in the majority in affirming because of the posture of the case on this appeal. LeMars raises no issues in this appeal attacking the trial court’s instructions or evidentiary rulings. Thus, under our prior rulings, the instructions become the law of the case,* and the jury decided any factual disputes under the instructions. I am therefore compelled to concur in the result.
On the second issue, which deals with subrogation rights, I respectfully dissent. The trial court ruled before trial that Le-Mars was entitled to a set-off of the $50,-000 paid under Olsons’ policy. In my opinion this ruling was correct under the terms of the policy and the statutory provision that I quoted above. The partial satisfaction upon which the majority relies, as I understand, was given by Olsons with respect to a judgment against Helmbolt, in which action LeMars was not a party. This lawsuit, the so-called bad faith action, is a different lawsuit and lies between the insureds and the insurer. The insureds rely on the policy provisions to show bad faith, and the insurer should be able to rely on the provisions of those same policies to *63show the contractual and statutory rights. Both Olsons and Helmbolt were represented by their own counsel and there is no showing in this record that LeMars had anything to do with the preparation of the partial satisfaction. Finally, the trial court made no record of its reason for reneging on its earlier ruling.
I would reverse the decision of the trial court on this issue and remand with instructions to enter a new judgment setting off the subrogation claim which Olsons assigned to LeMars by accepting the payment under the provisions of their policy. Thus, Olsons will have the $100,000 paid under the limits of the two policies plus $4,500 paid by Helmbolt and another $5,000 on the judgment in this case. It is a fact of life that there are many occasions where the injuries and damages exceed the coverage afforded by insurance. That does not make the insurers automatic insurers of that excess.

 Byre v. City of Chamberlain, 362 N.W.2d 69 (S.D.1985).