Bowers v. Camden Fire Ins. Ass'n

• Decision Date: 12 January 1967
• Docket Number: No. A--356,A--356
• Parties: Leslie BOWERS, Plaintiff-Respondent, v. CAMDEN FIRE INSURANCE ASSOCIATION, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 302

93 N.J.Super. 302

225 A.2d 715

Leslie BOWERS, Plaintiff-Respondent, v. CAMDEN FIRE INSURANCE ASSOCIATION, Defendant-Appellant.

No. A--356.

Superior Court of New Jersey, Appellate Division.

Argued Sept. 19, 1966.

Decided Jan. 12, 1967.

Roy Cummins, Camden, for appellant (Orlando & Cummins, Camden, attorneys, George H. Hohweiler, Camden, on the brief).

Milton L. Silver, Clayton, for respondent.

Before Judges CONFORD, FOLEY and LEONARD.

The opinion of the court was delivered by

FOLEY, J.A.D.

Defendant appeals from a judgment for plaintiff for the excess over the policy limits on a judgment recovered against plaintiff as the result of an automobile accident. Plaintiff claimed wrongful refusal by defendant insurance carrier to settle the case within the policy limits.

Plaintiff Bowers purchased from defendant an automobile liability insurance policy with $20,000/$40,000 limits. While the policy was in effect plaintiff was involved in an automobile-pedestrian accident. The pedestrian Albert Seagrave, 21 months of age, through his guardian brought a negligence action against Bowers; his father and guardian sued individually for consequential damages. In that case the jury returned a verdict of $20,000 for the infant and $9,000 for the father. The present defendant investigated the case and handled its defense through retained counsel.

Thereafter, Bowers sought a new trial upon the grounds that (1) the trial court erred in failing to grant his motion for involuntary dismissal at the trial, and (2) the verdict was contrary to the weight of the evidence. The motion was denied. Bowers then appealed to this court, arguing solely that there was not sufficient evidence of negligence to take the case to the jury. In an unreported Per curiam opinion the judgment was affirmed. Counsel retained by defendant insurance carrier handled these proceedings in the name of Bowers.

After denial of the motion for new trial but before the appeal was taken defendant, on the advice of counsel, refused an offer by the Seagraves' attorney to accept $20,000 in full settlement, although Bowers requested defendant to accept the offer.

Following the affirmance on appeal defendant herein paid $20,000 plus interest to Seagraves. Thereupon, Bowers instituted the present action to recover the excess of $9,000 plus interest and costs.

In his complaint plaintiff alleges:

'The failure of the defendant to pay the sum demanded of it in settlement of the claim of the said Albert Seagrave and Joseph Seagrave, Sr. was careless, negligent and in bad faith to the plaintiff in the circumstances above set forth; the defendant acted, not in the interest of the plaintiff, but in its own interest in refusing to make settlement after motion for a new trial was overruled; because of the defendant's bad faith, carelessness and refusal to make said settlement at said time, the plaintiff has been made subject to liability for $9,000.00 with interest thereon from February 5, 1964.'

The matter was tried before a jury. At the conclusion of plaintiff's case defendant moved for judgment upon the grounds that (1) there was no evidence that it was negligent in the investigation of the case or in the prosecution of the defense, and (2) bad faith was not established by the refusal to accept the claimants' settlement offer. The trial court granted the first portion of the motion and withdrew the negligence theory from the consideration of the jury. On this appeal plaintiff does not argue that the court erred in its disposition of the negligence charge. We therefore dismiss from further consideration that aspect of plaintiff's original claim for relief.

At the close of the entire case defendant, on motion for involuntary dismissal, again argued, Inter alia, that the proofs were barren of any inference that defendant was guilty of bad faith in failing to settle the case in the circumstances hereinafter set forth. The trial court again denied that branch of defendant's motion and submitted the issue to the jury. The jury, as noted, found for the plaintiff.

The determinative question presented to us is whether, in total view, there was any evidence from which a jury could reasonably infer that defendant insurer had breached its obligation to exercise good faith in behalf of its insured.

The essential background facts are not in dispute. On May 21, 1961 Bowers was driving the insured vehicle at about 10--15 m.p.h. on Clinton Street, Clayton, New Jersey. He said that he was looking straight ahead when he felt a thump in the middle of the right side of his car. He stopped immediately and found the Seagrave child lying behind the right rear wheel of the car. It was a clear day and the accident happened in daylight. There were no eyewitnesses to the actual occurrence and the child, of course, could not give any account of the event. There was no testimony which controverted Bowers', and the child's attorney admitted that his client's case was wholly circumstantial. The theory he advanced was that since the child was found under the rear part of the car it could be inferred that he was struck by the front of the car and run over, and that upon this hypothesis a jury could reasonably infer that Bowers had failed to exercise reasonable care to observe the presence of the child on or about the highway as he approached the accident scene. The defense, based to some extent upon the fact that there was no mark at the front of Bowers' vehicle, projected the theory that the child ran into the side of the car. The remainder of the proofs related to the physical evidence of roadway conditions. These were as reconcilable with defendant's theory as with plaintiff's.

Bowers timely reported the accident to the carrier, which then conducted an investigation and engaged a competent law firm as independent trial counsel to defend the Seagraves' suit. John P. Hauch, Jr., Esq., experienced in the defense of negligence actions, was assigned the case by the law firm. Mr. Hauch wrote Bowers a letter advising him that the injuries were serious and could result in a judgment exceeding the policy limits, at the same time inviting him to retain his personal attorney to aid in the defense. Bowers did not do so. Throughout the pretrial discovery which ensued, at and after the Seagraves' trial, and at the present trial, Bowers has maintained that he was not at fault for the occurrence of the accident.

Mr. Hauch testified that during the Seagraves' trial he offered either $12,000 or $14,000 in settlement to the Seagraves' attorney, Thomas Connery, Esq. Mr. Connery neither accepted the offer nor made any counter-offer of his own, either before or during the trial. He testified that he had no specific recollection of that offer.

It appears that the jury in the Seagrave case was deadlocked 6--6 after several hours of deliberation. However, further deliberation resulted in a 10--2 verdict in the amounts above stated.

At the argument for a new trial Seagraves' attorney offered to accept $9,000 less than the verdict of $29,000 if no appeal was taken. After denial of the new trial the offer was repeated in writing. Upon learning of this proposal Bowers, who until then had favored an appeal,...