Purscell v. TICO Ins. Co.
| Decision Date | 22 June 2015 |
| Docket Number | No. 13–2362.,13–2362. |
| Citation | 790 F.3d 842 |
| Parties | Ben PURSCELL, Plaintiff–Appellant, v. TICO INSURANCE CO.; Infinity Assurance Insurance, Company, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
790 F.3d 842
Ben PURSCELL, Plaintiff–Appellant
v.
TICO INSURANCE CO.; Infinity Assurance Insurance, Company, Defendants–Appellees.
No. 13–2362.
United States Court of Appeals, Eighth Circuit.
Submitted: Nov. 12, 2014.
Filed: June 22, 2015.
Grant L. Davis, Davis, Bethune & Jones, LLC, Kansas City, MO, argued (Shawn G. Foster, on the brief), for appellant.
John T. Brooks, McKenna Long & Aldridge, LLP, San Diego, CA, argued (Peter H. Klee, Charles A. Danaher, McKenna Long & Aldridge, LLP, San Diego, CA, Wm. Clayton Crawford, James P. Maloney, Foland, Wickens, Eisfelder, Roper & Hofer, P.C., Kansas City, MO, on the brief), for appellees.
Before BYE, SHEPHERD, and KELLY, Circuit Judges.
Opinion
BYE, Circuit Judge.
Ben Purscell sued his motor vehicle liability carrier, Infinity Assurance Insurance (Infinity), contending the insurer acted in bad faith in handling claims brought against him by third parties injured in a motor vehicle accident. Purscell alleged Infinity exposed him to excess judgments when it failed to settle the third party claims within his policy limits. The district court1 granted summary judgment to Infinity, concluding the insurer did not act in bad faith or breach any fiduciary duty it owed to Purscell. See Purscell v. TICO Insurance Co., 959 F.Supp.2d 1195, 1204 (W.D.Mo.2013). We affirm.
I
On the evening of May 19, 2006, Purscell's vehicle collided with another vehicle, injuring both of its occupants, Tim and Amy Carr. Amy Priesendorf, a passenger in Purscell's vehicle and one of his co-workers, died as a result of the accident. The circumstances leading up to the collision were somewhat unusual. Earlier that evening, Priesendorf (whom Purscell had only known for a couple of weeks) visited him at his home. She was distraught and drunk. She asked Purscell to give her a ride. He agreed. She directed him to a cemetery, where she visited a friend's grave.
On the return trip to Purscell's home, Priesendorf's behavior became erratic. From the passenger seat, Priesendorf stretched her leg over and put her foot down on the accelerator, on top of Purscell's foot. Purscell told her to stop. She did. Later in the trip, however, Priesendorf unbuckled her seat belt, scooted closer to Purscell, and repeated the erratic behavior. Purscell tried to get his foot out from under hers but was unable to do so. As they approached an intersection with a stop sign, he again told Priesendorf to stop and put his other foot on the brake, but with no effect. Purscell saw the headlights from the Carrs' vehicle and told Priesendorf another car was approaching the intersection. Priesendorf saw the other vehicle, but continued to press down on the accelerator.
Purscell estimated his vehicle reached a speed as high as seventy-five miles per hour before entering the intersection. Purscell swerved left to avoid an accident, but the two vehicles still collided. Both vehicles overturned. The Carrs' vehicle caught fire. Priesendorf was thrown from Purscell's vehicle and pronounced dead at the scene. Tim Carr was seriously injured and airlifted to a hospital. Amy Carr also suffered injuries and was taken by ambulance to a hospital. Purscell was injured as well.
Following the accident, Purscell learned the gravesite Priesendorf visited on the night of the collision belonged to a person who had been killed in an accident while Priesendorf was driving drunk. He also learned Priesendorf had been hospitalized for attempting suicide following her friend's death, and that none of her other friends would give her a ride because she would jerk the steering wheel out of their
hands or “do stuff” with the accelerator while they were driving.
Infinity insured Purscell's vehicle at the time of the accident. The policy limited liability to $25,000 per person and $50,000 per accident for bodily injury. Within days of the accident, Infinity learned the accident involved one fatality, one severe injury (Tim Carr's) and one minimal injury (Amy Carr's). Infinity immediately put the full $50,000 per accident policy limits on reserve, with $25,000 designated to Priesendorf's fatality and $25,000 designated to the Carrs.
Several key events relevant to Purscell's bad faith claim occurred within the months following the May 19 accident. First, Infinity received a settlement offer from the Carrs a very short time after the accident. On June 6, an attorney representing the Carrs contacted Infinity and requested the full limits of Purscell's policy. At that time, Infinity learned Tim Carr's medical expenses alone were over $97,000 and ongoing. Amy Carr was making a loss of consortium claim in addition to a claim for her own personal injuries, with medical expenses of $1,600, lost wages of over $1,500, and all categories of loss expected to be ongoing. But with the accident having occurred just three weeks earlier, Infinity had not yet completed its investigation and had questions about whether its policy extended coverage because of the intentional nature of passenger Priesendorf's conduct. Infinity told the Carrs' attorney it needed to investigate issues of coverage further before it could make a settlement offer, and would contact the attorney after completing its investigation. At the same time, Infinity sent two letters to Purscell, one informing him a demand of $50,000 had been received, and the other telling him Infinity was declining to enter into settlement negotiations until further investigation of coverage issues had been conducted. Infinity also informed Purscell of the possibility the claims arising from the accident may exceed his insurance coverage, and of his right to seek independent counsel.
Second, the Carrs withdrew their settlement offer. On June 14, Carrs' attorney contacted Infinity requesting clarification of the coverage issues Infinity had mentioned. When Infinity did not respond within a week, the attorney withdrew the settlement offer.2 A week later, Infinity contacted the Carrs' attorney and stated “We are not denying any liability in the case to the Carr's [sic], but with a fatality involved, limits are going to be settled on a prorata basis and most likely submitted to the court for settlement.” Carrs' attorney responded that given Priesendorf's role in the accident, he did not believe any wrongful death claim on her part would be meritorious. The attorney did not extend another settlement offer, however, but merely informed Infinity the Carrs were open to settlement discussions. More specifically, Carrs' attorney stated if “Infinity is interested in settlement of the bodily injury claims or consortium claims of Tim or Amy Carr, I assume you will communicate to me offers of settlement rather than file litigation proposing distribution of part of the policy limits of coverage to heirs of Amy Priesendorf.” App. at 279–80.
Third, on July 6, less than two months after the accident, Infinity learned Priesendorf's parents intended to pursue a
wrongful death claim. Shortly after Infinity learned it was dealing with three claims against Purscell, the Carrs' attorney informed Infinity he was filing suit. Purscell was served with the Carrs' lawsuit on July 29. Over the course of the next four months, Infinity's records indicate it regularly requested updates from the lawyers for both the Carrs and the Priesendorfs regarding the status of their negotiations over how to split the $50,000 policy limits between the Carrs' personal injury claims and Priesendorf's wrongful death claim. Infinity's records also show that throughout this period, Infinity's attorney discussed the possibility of filing an interpleader to deposit the full policy limits in court if an agreement regarding the division of the policy limits between the three claimants could not be reached.
Fourth, Infinity received a request from Purscell to settle the Carrs' claims within his policy limits. On August 14, the attorney representing Purscell as a result of the criminal charges arising from the accident contacted Infinity on Purscell's behalf. The letter referenced the claim...
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