Court Opinion

ID: 5779530
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:47:49.23413+00
Date Added: 2024-06-11T08:41:56.646944
License: Public Domain

Shapiro, J. (dissenting).
I disagree with the reasoning of the dissent by Mr. Justice Benjamín that an impecunious insured, or what he calls a de facto bankrupt, may be equated with an adjudicated bankrupt. An adjudicated bankrupt is no longer subject to payment of a judgment theretofore rendered against him, but that is not true of a judgment debtor who is merely unable to respond to a judgment. I can imagine any number of circumstances in which such a person can be legally harmed by having an outstanding judgment against him. For instance, if he should come into an inheritance it would be subject to the levy of the judgment; and, of course, if employed, his salary or wages would be subject to garnishee.
I am in agreement with the majority opinion of Mr. Justice Gtulotta that the failure of the defendant insurance company to settle the negligence actions did not, in and of itself, necessarily connote bad faith, but I do not agree with the conclusion, implicit in that opinion, that the damages flowing from the company’s failure to defend in those actions, make it subject to payment of the judgments therein, which are in excess of the coverage of its policy, for had there been no valid defense to the negligence actions the recoveries, presumably, would have been in the same amounts even if the i/nsurer had complied with the terms of its contract and defended Porter, its insured.
Under such circumstances, since Porter would have been .held liable in the same amounts even if a defense had been interposed, the damages assessed against the insurance company by the judgment herein do not necessarily flow from the breach by the company of its contract to defend him (cf. Rochester Lantern Co. v. Stiles & Parker Press Co., 135 N. Y. 209, 217). In my opinion the judgment should be reversed and a new trial granted to determine whether the excess judgments resulted from the breach, i.e., whether there was a valid defense which, as a result of the insurer’s failure to defend, was not interposed. Furthermore, in this regard I believe there is an issue of fact as to whether Porter, by his conduct in failing to defend the negligence actions, after the insurance company withdrew its representation of him in one of the actions and refused to defend in the other action, contributed to the amount in which *273the judgments were rendered, particularly in view of his contention that he had a good defense to the negligence suits.
Since those issues were not adequately presented toxthe jury, the judgment should be reversed and a new trial granted.