Court Opinion

ID: 7817311
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:41:04.766457+00
Date Added: 2024-06-11T16:30:38.091012
License: Public Domain

J. Fred Jones, Justice, dissenting. I do not agree with the majority view in this case. It is my view that when the Reserve Insurance Company was advised that suit had been filed for an amount, far in excess of the primary coverage, it. elected to depend entirely on the primary insurance carrier to bear the expense of defending the suit in protection of its own $10,000.00 limits, and thereby took the calculated risk of paying the excess of any judgment over $10,000.00 This is exactly what appellee had contracted to do; it could be required to do no more and had no right, under its contract with appellant, to do anything less. Appellee had written notice from the appellant that suit for $25,000.00 had been filed, and that the primary carrier was defending, the lawsuit. Appellee had subsequent written notice that the case was set for trial on July 8, 1965. Appellee did nothing, and was required to do nothing under its contract, until it was notified that judgment for $16,000.00 had been rendered on July 8, 1965, at which, time it was called upon to pay the excess amount of $6,000.00. Appellee then contended that it had been advised in a telephone conversation with appellant’s assistant manager prior to July 8, 1965, that the case had been settled within the policy limits of a primary liability insurance contract between the appellant and another company, and appellee refused payment on the grounds that appellant had failed to render the cooperation required under the provisions of the primary policy which provisions were adopted by reference, in the policy' issued by appellee. Appellant denied that it had advised appellee that settlement had been made, but appellee was permitted to fortify the testimony of its claims superintendent on this point with a notation the superintendent says he made in the lower right hand corner .of an entry sheet at the time he says he obtained the information by phone. Appellant was not required, under its policy contract with appellee, or with the prime insurance carrier, to keep appellee advised of the progress of the negotiations toward settlement; it is usually.the other way around. As a general rule and practical matter, when an insurance carrier is notified of a claim made or lawusit filed against its insured, it takes over from there, and keeps the insured advised of the progress made toward settlement. It is my view that the appellee’s evidence in this case loses its substantial qualities when measured by the logic, or lack of it, in the proposition that an assured would pay premiums on an insurance policy for protection against the hazards of a lawsuit, and then advise its insurance carrier that ■ a lawsuit had been settled when in fact it had not. ■ ■ • . ■ I fail to see wherein the appellee was prejudiced in any event. Appellee’s superintendent testified to the effect that upon receipt of advice that the case had been settled, the file was placed in a basket for the purpose of being closed out, and that had he not been so advised, the file would have been referred to the vice-president in charge of claims for the purpose of pre-trial ¡review. It is my opinion that this is not the kind of service appellant had paid for under its policy. Appellee could have referred the file to its vice-president on April 22, 1965, when it was notified by letter that the trial was set for July 8, if it considered this procedure- of any importance under the policy. No liability • accrued to ap-pellee until judgment was entered in this case, and as I view it, the policy was written for the protection of the appellant and not for the protection of the appellee. I would reverse the decision of the trial court and direct- judgment- against the appellee for $6,000.00.