Boston Old Colony Ins. Co. v. Gutierrez, s. 77-508

• Decision Date: 11 July 1978
• Docket Number: 77-761,Nos. 77-508,s. 77-508
• Citation: 360 So.2d 464
• Parties: BOSTON OLD COLONY INSURANCE COMPANY, a foreign corp., Appellant, v. Raul GUTIERREZ, Appellee.
• Court: Florida District Court of Appeals

Page 464

360 So.2d 464

BOSTON OLD COLONY INSURANCE COMPANY, a foreign corp., Appellant, v. Raul GUTIERREZ, Appellee.

Nos. 77-508, 77-761.

District Court of Appeal of Florida, Third District.

July 11, 1978.

Blackwell, Walker, Gray, Powers, Flick & Hoehl and James E. Tribble, Miami, for appellant.

Sams, Anderson & Ward and Murray Sams, Jr., Miami, for appellee.

Before HAVERFIELD, C. J., and PEARSON, J. and CHARLES CARROLL (Ret.), Associate Judge.

PEARSON, Judge.

The first of these consolidated appeals is from a final judgment upon a jury verdict in an action against an insurance company by an injured plaintiff (who is not a policyholder of the insurer) for bad faith failure to settle with the plaintiff. The second is an appeal from a second judgment awarding the plaintiff attorney's fees in the same action. The principal issue presented on the first appeal is whether the evidence supports the judgment. On the second appeal, the issue is whether attorney's fees may be separately assessed by the court as an adjunct to the cause of action.

The evidence before the jury, viewed in the light most favorable to the verdict, is that on January 1, 1973, at approximately 6:00 p. m., Boston Old Colony's insured, Brown, and appellee Gutierrez were involved in a head-on collision on West Flagler Street in Miami, Florida. At the time of the accident, Brown had an automobile liability policy with Boston Old Colony which provided liability coverage of $10,000 per person. An unusual circumstance of the accident was that both Brown and Gutierrez claimed to have been proceeding east on Flagler Street and each claimed that the other car was headed west on Flagler Street, came over the center line and hit him head-on. There were three witnesses to the accident. All three of these witnesses gave testimony that Gutierrez was headed east on Flagler Street when Brown, who was traveling west, crossed the center line and struck Gutierrez's automobile head-on in his lane. Brown told George Heider, a senior adjuster of Boston Old Colony, that he was proceeding east on Flagler Street when the other automobile, heading west on Flagler Street, came over the center line and hit him head-on. Three witnesses provided by Brown to his insurance company gave statements supporting Brown's version of the accident. They lived in a trailer park two blocks west from where the accident occurred and said that Brown had been with them minutes before the accident when he drove out of the trailer park and headed east on Flagler Street. The investigating officer, after viewing the scene and interviewing the eyewitnesses, charged Brown with the accident.

Heider knew there was a question of liability despite Brown's version of the accident, and he so noted in his file. He knew that Gutierrez's injuries were serious and he noted in his file that Gutierrez was in South Miami Hospital in the intensive care unit. His condition was listed as critical. He also learned that Gutierrez had a fractured arm, thirteen fractured ribs, a fractured leg and was paralyzed from the waist down. Brown could not talk due to a tracheotomy. Although Boston Old Colony denied any liability to Gutierrez's attorney on January 9th and again on February 12th, Heider had, in fact, set up a reserve of $9,500 on Brown's policy of $10,000. Heider had full authority to settle where there was a possibility of a verdict and a judgment in excess of the $10,000 policy limits.

On January 18th, at Heider's request, Boston Old Colony engaged a Mr. David Plummer, a trained professional accident reconstruction expert, to investigate the physical evidence and to render an opinion as to which car had been traveling east. After examining the accident site and the wrecked vehicles, a report was sent by Plummer to Heider on March 14th in which he discussed the physical evidence and gave his opinion that Brown was eastbound and Gutierrez was westbound on Flagler Street. He further concluded that Gutierrez was completely on the wrong side of the pavement at the point of impact.

Brown reported to Heider that he had employed a personal attorney, Malcolm Kneale, and was planning to make, and later did make, a claim for his own injuries. Heider determined that because of the seriousness of Gutierrez's injuries and the conflict in liability testimony, he would offer to pay the $10,000 policy limits to settle the Gutierrez claim. Before making the offer to Gutierrez, Heider again talked with Brown. Although there was nothing in the policy that gave Brown the right to approve or disapprove the settlement, Heider consulted with him because Heider knew that Brown was represented by personal counsel and was going to make claim for his own injuries. During the conversation, Brown adamantly opposed offering settlement to Gutierrez even though Heider had warned him of a possible excess verdict. Heider asked Brown to provide Old Colony with a hold harmless letter. The hold harmless letter was prepared by Brown's attorney, Kneale, and was signed by Brown.

There was a conflict in the testimony between Kneale and Heider as to the circumstances leading up to the hold harmless letter. Accepting Kneale's testimony at the trial, it is that some time before the execution of the hold harmless letter, Heider had told him that Gutierrez had no liability insurance and that Kneale and Heider had discussed an uninsured motorist claim by Brown against Boston Old Colony. According to Kneale, Heider's position had been that Boston Old Colony would not "pay both ways;" that it would pay either the uninsured motorist claim or Gutierrez's claim, but it would not pay both. Kneale also testified that Heider told him that Brown's uninsured motorist claim would not receive favorable treatment unless the hold harmless letter was prepared and that he was relying on Heider to make immediate settlement under the uninsured motorist claim.

In actuality, Gutierrez had a liability insurance policy with Government Employees Insurance Company. On March 14th, Gutierrez's attorney wrote Heider offering to settle the claim against Brown and Boston Old Colony for the policy limits. On March 22nd, Heider wrote Gutierrez's attorney denying liability. Heider testified that he...