Eastham v. Oregon Auto. Ins. Co.
| Decision Date | 20 November 1975 |
| Citation | 542 P.2d 895,273 Or. 610 |
| Parties | William W. EASTHAM, Respondent, v. OREGON AUTOMOBILE INSURANCE COMPANY, Appellant. . * |
| Court | Oregon Supreme Court |
C. S. Emmons, Emmons, Kyle, Kropp & Kryger, Albany, and McMinimee & Kaufman, Tillamook, for respondent.
No appearance contra.
ON REHEARING.
Plaintiff has filed a vogorous petition for rehearing. Running through the petition is the contention that the award by the jury of $50,000 in the original case of plaintiff against Byrd, the insured, forecloses consideration of the apparently reasonable settlement value of that case in determining whether there was sufficient evidence of the insurer's bad faith in the present case to go to the jury. It is this court's opinion that it is not possible to determine intelligently the issue of the insurer's bad faith without consideration of evidence bearing upon the apparent value in settlement of plaintiff's original case against the insured prior to verdict. In the present instance the evidence shows that with full knowledge of all relevant facts as they were subsequently disclosed at trial, everyone, including plaintiff's experienced lawyer, evaluated the case at much less than the policy limits.
The petitioner chides the court for deciding the issue on the basis of good faith with no consideration of due care. A careful reading of the leading case in Oregon, Radcliffe v. Franklin Nat'l Ins. Co., 208 Or. 1, 298 P.2d 1002 (1956), leaves one somewhat in doubt although it appears to have adopted the criterion of good faith (as that term is used in this kind of case) in deciding whether to negotiate and/or settle. In Kuzmanich v. United Fire and Casualty, 242 Or. 529, 532, 410 P.2d 812, 813 (1966), we said that 'only a decision made by an insurer who exercises due diligence in apprising itself of the material facts is entitled to be considered as made in good faith,' citing Radcliffe. There is no contention in this case that defendant did not fully inform itself of the relevant facts. To the contrary, the complaint takes great care in alleging that defendant was in possession of all relevant information and, therefore, should have offered to settle. Most authorities agree there is little difference between the concepts of 'good faith' and 'due care' where the duty of the insurer, as we stated in our original opinion, is to 'act as if there were no policy limits applicable to the claim and as if the risk of loss was entirely its own.' See R....
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