Hilker v. W. Auto. Ins. Co. of Ft. Scott, Kan.
Decision Date | 11 June 1930 |
Citation | 204 Wis. 1,231 N.W. 257 |
Parties | HILKER v. WESTERN AUTOMOBILE INS. CO. OF FT. SCOTT, KAN. |
Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from a Judgment of the Circuit Court for Racine County; S. E. Smalley, Judge. Affirmed.
Action by Fred C. Hilker against the Western Automobile Insurance Company of Ft. Scott, Kan., begun November 30, 1928, to recover the excess over the coverage of an automobile indemnity policy which was paid by plaintiff to satisfy a judgment for damages for injuries caused when his automobile struck a child. From a judgment for plaintiff entered August 15, 1929, the defendant appealed.
The defendant company issued a policy of automobile indemnity insurance to the plaintiff, which limited its liability for injury to one person to $5,000. The policy gave the defendant insurance company full and complete control of the handling and adjustment of all claims for liability made against the insured, and provided that the insured “shall not interfere in any negotiations for settlement or any legal procedure.”
The defendant company took full control of the defense of the two actions brought against the plaintiff. These actions resulted in judgments against the plaintiff which totaled $10,500. Stoffle v. Hilker, 189 Wis. 414, 419, 207 N. W. 685.
The plaintiff paid these judgments, and then brought this action to recover the $5,500 which he was compelled to pay in excess of the coverage of the policy, alleging that the defendant company acted in bad faith in conducting the defense of these actions, and in withholding from him information as to the actions, and in failing to settle these actions, alleging that they could have been adjusted for a sum less than $5,000.
The jury found that the defendant company could have settled the two actions brought against the plaintiff before they were begun as well as during the trial, for less than $5,000, and that the defendant company acted “in bad faith toward the plaintiff” in failing to make such settlements, in its manner of handling these claims against the plaintiff, and in dealing with him.
Judgment for the plaintiff was entered on the verdict for the sum of $5,500.Hoyt, Bender, Trump, McIntyre & Hoyt, of Milwaukee (Eugene L. McIntyre, of Milwaukee, of counsel), for appellant.
Simmons, Walker, Wratten & Sporer, of Racine, for respondent.
1. The case presents a question of vital importance to both insurer and insured, which has been considered by this court in but a single case, decided in 1916. Wisconsin Zinc Co. v. Fidelity & D. Co., 162 Wis. 39, 155 N. W. 1081, Ann. Cas. 1918C, 399. Since that case was decided, a great body of automobile law has been developed. The court at that time did not see, and could not then foresee, the problems that would arise under the provisions of these policies which give the insurer the complete and absolute control of all claims arising out of automobile accidents.
In view of the fact that these contracts of insurance are prepared by the company and are not prescribed by law, the tendency of the decisions has been to extend, rather than to circumscribe, the field of liability on the part of the company and to hold that the rights of the insured Brassil v. Maryland Casualty Co., 210 N. Y. 235, 104 N. E. 622, 624, L. R. A. 1915A, 629, 632.
2. The parties knew when they made this contract that a large percentage of these cases are settled without litigation, and that such adjustments were one of the methods of protecting the interests of the insured which were commonly used to discharge the duty imposed upon these companies by their policies. That this was in the minds of the parties when they made this contract is shown by the fact that the policy takes from the insured all right to adjust any claim, and requires him to aid the company in effecting a settlement.
[1] Douglas v. United States Fidelity & G. Co., 81 N. H. 371, 127 A. 708, 713, 37 A. L. R. 1477, 1484. In the absence of such an agreement, the company must be held liable for any want of good faith in defending the action or in attemptingto adjust the claims made against the plaintiff.
[2] 3. The appellant raises no question as to the instructions of the court. The chief question presented is whether the answers of the jury are sustained by the evidence. In determining this question, we must consider the relationship that existed between these parties. For a consideration fixed by it, the defendant company contracted to indemnify the plaintiff against the very claims that were the basis of the judgments totaling $10,500. As a condition of affording plaintiff that protection, the company assumed absolute control of the adjustment of all claims and of all litigation arising out of such claims.
Under such a contract there is no escape from the conclusion that the insurance company became the agent of the insured for the purpose of handling such claims and of conducting such litigation. The determination in Wisconsin Zinc Co. v. Fidelity & D. Co., 162 Wis. 39, 52, 155 N. W. 1081, Ann. Cas. 1918C, 399, that the insurance carrier “could not be the agent of the insured under such a policy of insurance” must be overruled.
[3] This determination that the company was not the agent of the insured was Douglas v. United States Fidelity & G. Co., 81 N. H. 371, 127 A. 708, 711, 37 A. L. R. 1477, 1482. See, also, Stowers Furniture Co. v. American Indemnity Co. (Tex. Com. App.) 15 S.W.(2d) 544, 547, 548.
[4] The rule is fundamental that a person may not act as the agent of another where his interests are adverse to those of his principal, without the full knowledge and consent of his principal. 1 Mechem, Agency, § 177. Holding the insurance company to be the agent of the plaintiff does not violate this fundamental rule, because the plaintiff, when he accepted the policy, knew of the adverse interest of the defendant, and consented that it might act in that capacity, despite its adverse interest.
The defendant company, acting as agent of the plaintiff, contracted to take ...
To continue reading
Request your trial-
Auto Mut. Indem. Co. v. Shaw
... ... Circuit, in the case of Ohio Casualty Ins. Co. v ... Beckwith, 74 F.2d 75, speaking for the Court where a ... Lindsay, 93 ... U.S. 143, 23 L.Ed. 855; Carson Pirie Scott & Co. v ... Parrett, 346 Ill. 252, 178 N.E. 498, 81 A.L.R. 1262, and ... right away from the assured ... The ... case of Hilker v. Western Automobile Ins. Co., 204 ... Wis. 1, 231 N.W. 257, was an ... ...
-
Kranzush v. Badger State Mut. Cas. Co.
...the matter, the insured will be exposed to that portion of any judgment which exceeds the policy limits. Thus in Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 231 N.W. 257, 235 N.W. 413 (1931), we affirmed a plaintiff-insured's recovery of an excess judgment against his insurer and hel......
-
Johnson v. Hardware Mut. Cas. Co.
...responsibility imposed upon it by its policy.* PER CURIAM.1 This definition is supported by the decisions in Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 231 N.W. 257, 235 N.W. 413, 414, 415; Mendota Electric Co. v. New York Indemnity Co., 169 Minn. 377, 211 N.W. 317, 318; Maryland Ca......
-
Spiegel v. Beacon Participations, Inc.
...or ill will. It partakes of the nature of fraud. Browning v. Fidelity Trust Co. (C.C.A.) 250 F. 321, 325;Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 13, 231 N.W. 257,235 N.W. 413;Bundy v. Commercial Credit Co., 202 N.C. 604, 607, 163 S.E. 676;Hilgenberg v. Northup, 134 Ind. 92, 94, 3......
-
Issues for excess insurer counsel in bad faith and excess liability cases.
...& JOSEPH M. PERILLO, THE LAW OF CONTRACTS 589 (3d ed. 1987) (punitive damages not available in actions for breach of contract). (6.)231 N.W. 257 (Wis. 1930), aff'd on reh'g, 235 N.W. 413, at 413-14 (Wis. 1931). (7.)See, e.g., STEPHEN S. ASHLEY, BAD FAITH ACTIONS: LIABILITY AND DAMAGES [......