Brown v. State Farm Mut. Ins. Co.

• Decision Date: 03 September 1980
• Docket Number: No. 21292,21292
• Citation: 275 S.C. 276,269 S.E.2d 769
• Court: South Carolina Supreme Court
• Parties: Perry BROWN, Respondent, v. STATE FARM MUTUAL INSURANCE COMPANY, Appellant.

Page 769

269 S.E.2d 769

275 S.C. 276

Perry BROWN, Respondent, v. STATE FARM MUTUAL INSURANCE COMPANY, Appellant.

No. 21292.

Supreme Court of South Carolina.

Sept. 3, 1980.

Grimball, Cabaniss, Vaughn & Guerard, Charleston, for appellant.

Fred Henderson Moore, of Moore & Brown, Charleston, for respondent.

GREGORY, Justice:

Respondent Perry Brown's 1974 Buick automobile caught fire and he sought recovery for a total loss under a policy of insurance with appellant State Farm Mutual Insurance Company. The jury returned a verdict of $3,950.00 ¹ and the trial judge awarded respondent's attorney a fee of $1,316.66 under authority of Section 38-9-320 (1976 Code). The sole issue on appeal is the award of attorney's fees. We reverse.

The above statute plainly permits a trial judge to award an attorney's fee "when an insurance company's refusal to pay '. . . (is) without reasonable cause or in bad faith'." Baker v. Pilot Life Insurance Company, 268 S.C. 609, 235 S.E.2d 300, 301 (1977); Madden v. Pilot Life Insurance Company, 272 S.C. 264, 251 S.E.2d 196, 197 (1979). On appeal we treat the trial judge's determination as one in equity made without the aid of the jury and, thus, we are free to find facts in accordance with our view of the preponderance of the evidence. Baker and Madden, supra; Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).

Here the trial judge found appellant unreasonably delayed settlement of the claim and breached its fiduciary duty to respondent. We disagree.

The loss occurred on March 8, 1977 and was reported to the company on March 10. An adjuster immediately drove to respondent's home and examined the vehicle. The adjuster and respondent later discussed the claim and at respondent's suggestion the car was towed to Hudson's Walterboro Auto Electric for an assessment of its repairability. ² On March 17 Hudson notified the parties the vehicle was a total loss. Negotiations ensued.

By letter of April 1, 1977, the adjuster confirmed a settlement agreement of $3,200.00. Respondent in the meantime had consulted an attorney. What followed over the course of the next several months was an escalation of respondent's settlement demand by his attorney ³ with, as we read the record, a concomitant reduction in cooperation. Respondent's attorney refused to grant the company the specific authority to dismantle the engine to check for possible damage after water was discovered on the oil dipstick. Information pertaining to the satisfaction of the lien on the vehicle, although requested, was not supplied. Phone calls and correspondence went unanswered.

Appellant refused respondent's attorney's first demand of $4,500.00 since it was well above the market price of a comparable vehicle located by one of the adjusters. We cannot agree with the trial judge that the failure of the adjuster to reveal the price and availability of the comparable vehicle was a breach of the company's fiduciary duty to respondent. This information was obtained by the adjuster to assist him in arriving at a reasonable value for a total loss. Moreover, under the terms of the policy the company had the option of repairing or replacing the vehicle or paying for the loss.

The lower court found unreasonable delay evidenced by appellant's failure to engage the services of an independent appraiser ⁴ until some eighteen months after the loss. We know of no duty on the part of an insurer to retain an independent appraiser under circumstances such as these. That appellant chose to do so was reasonable and not in itself indicative of delay.

We cannot say appellant acted unreasonably, or in bad faith, under these circumstances. Before respondent's attorney became involved it appears the parties had reached a settlement which closely approximated the independent appraisal some eighteen months later. Appellant's pretrial offer was very near the amount of the verdict while respondent's final demand was far above it. In the last analysis we have divergent viewpoints of the reasonable value of the...