Court Opinion

ID: 6915804
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:40:51.090807+00
Date Added: 2024-06-11T16:06:39.481896
License: Public Domain

PICKETT, Circuit Judge
(concurring).
Under the terms of the insurance policy in effect, Underwriters agreed to defend, in the name and on behalf of the insured, all claims and suits against American, and that “the insurer shall have the right to settle any claims or suits at its own cost * * * ”.
It is my view that Underwriters, in attempting to dispose of its obligation to American under the terms of the policy, had no authority to bind or liquidate the claim as against American. The responsibility of Underwriters was contractual, and in public liability cases it was authorized to conduct negotiations for settlement of claims against the insured, but this responsibility was its own. Although the relationship created by the policy is in some respects similar to that of agency, it is not a true agency. There is no fiduciary relationship between the insurer and the insured. Underwriters had full control over the negotiations and could make final settlement without consulting American. In handling the negotiations for settlement, Underwriters was acting for itself, not as agent for American. Haluka v. Baker, 66 Ohio App. 308, 34 N.E.2d 68; Countryman v. Breen, 268 N.Y. 643, 198 N.E. 536. When the settlement failed, American was not bound by it and the injured party was free to disregard it and proceed with its action. 11 Am.Jur., Compromise and Settlement, § 28; Shubert v. Rosenberger, 8 Cir., 204 F. 934.
In this particular case, however, I agree that American, by its acts and conduct, acquiesced in, ratified and adopted the settlement, and thereby became bound by it to the extent that the fund in the interpleader action which it brought was subject to the claim of Gannon on his garnishment.