National Mut. Cas. Co. v. Britt
| Decision Date | 06 June 1950 |
| Docket Number | No. 33030,33030 |
| Citation | 203 Okla. 175,218 P.2d 1039 |
| Parties | NATIONAL MUT. CASUALTY CO. v. BRITT et al. |
| Court | Oklahoma Supreme Court |
This case arose out of the facts and circumstances considered and passed upon by this court in the case of Britt et al. v. Doty, Administratrix, 195 Okl. 620, 161 P.2d 521. That was an appeal from wrongful death verdict and judgment. At all times material to this action the plaintiffs Carl M. Britt and Glenn D. Britt were a partnership doing business as Britt Milling Company and carried an insurance policy with the defendant, The National Mutual Casualty Company a corporation. The defendant as insurer agreed to indemnify plaintiffs against all liability imposed by law for damages on account of injury to or death of plaintiffs' employees, but not in excess of $5,000 as to any one employee. Its contract further bound the company to investigate all claims arising under its contract and to defend all actions resulting therefrom.
On October 9, 1941, James Doty, an employee of plaintiffs, was accidentally killed by a slide in a chat pile caused by the explosion of dynamite shots placed in the chat pile by another employee of plaintiffs. The company, pursuant to its obligation under its contract, conducted an investigation of the facts and circumstances attending the accident and conducted the defense of the action brought by Mayme Doty as administratrix of the deceased against the Britts and the company.
In the instant action, plaintiffs sought judgment against the insurance company in the sum of $5,000, the amount in excess of the policy limit which plaintiffs paid on the judgment in the Doty case. The claim on which plaintiffs' action is based is that the company acted in bad faith in the investigation and defense of the prior action and in refusing to make a settlement of that action within the limits of its policy when the opportunity to do so was offered it.
Admitting the partnership of plaintiffs and its own corporate existence defendant denied generally and specifically each and all of the material allegations of plaintiffs' petition.
In presenting the case to this court for review the principal contention of defendant and the burden of its argument is that the evidence is insufficient to establish and show bad faith on its part in the discharge of its obligations to plaintiffs under its indemnity contract.
Both parties in their briefs cite and quote excerpts from the case of Boling v. New Amsterdam Casualty Co., 173 Okl. 160, 46 P.2d 916. In the Boling case the lower court sustained a demurrer to plaintiff's amended petition, dismissed her action and this court in reviewing that judgment held that the allegations were sufficient to state a cause of action in tort. Those allegations showed that after a judgment was obtained against Boling and her insurance company for $20,000 the plaintiff in that action offered to settle her claim and enter full satisfaction of the judgment for the sum of $6,000 if paid within a specified time; that Boling communicated this offer to the company which refused to make the settlement on that basis unless Boling would pay $4,500 of the $6,000 settlement which in effect would release the company of its liability under its contract to the extent of $3,500. When plaintiff in that action refused to accede to this demand by the company, it failed and refused to appeal that case to this court for review. Plaintiff in that case alleged that under these demands the refusal to appeal by the company was arbitrary, oppressive and in violation of its obligations under its contract and constituted bad faith. These allegations of fact being admitted by the demurrer the action of the trial court in dismissing the action was held by this court to be erroneous and its judgment was reversed.
In the instant case the record discloses that immediately upon learning of the accident, defendant notified Carl M. Britt to have all witnesses to the accident at the office of its attorney that evening. Pursuant to that notice Mr. Britt and all of the employees engaged in work at the scene of the accident were present at the attorney's office and were carefully interrogated by the attorney as to all of the facts and circumstances showing how the accident occurred and their several statements were reduced to writing by the attorney and each of said witnesses signed the same. There is practical unanimity in these statements which omit only one important detail which is a direct statement of the presence of Doty, the deceased, at the time the shots in the chat pile were discharged. On the basis of these statements signed by the witnesses within a few hours after the accident happened the attorney advised the company that no negligence was shown on the part of the Britts and that no liability against them resulted from Doty's accidental death. The attorney so acting for and advising the company was one of long experience in the practice of law in Oklahoma.
Subsequent to this preliminary investigation by the attorney for defendant and after suit was filed on August 13, 1942, the depositions of these same witnesses were taken by the attorney for the administratrix and while their testimony by deposition was in greater detail as to facts and circumstances than shown in their signed statements, the substance of their testimony was the same as their statements except that it was shown that when the shots were fired in the chat pile Doty, the deceased, was on his way to the mill with a truckload of chat and was not present when the shots were fired and when the first slide following the shots occurred, and that when he did return after an absence of some ten or fifteen minutes he was not advised by any of his fellow employees that the shots in the chat pile had been fired.
Evidently Doty knew the shots had been fired because Fred Holt in his deposition testified that upon his return from the mill Doty left his truck and came directly to the witness and as they walked to the west side of the shovel Doty said: 'Let's try to break this off here so we can back in on this side.' LeRoy Wade, the foreman, testified that Doty helped him place the shot around the casing before leaving for the mill. Joe Nolan, the powder man, testified that upon Doty's return from the mill some 100 to 150 tons of chat had come down following the shots and that the face of the pile had...
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