Howard v. State Farm Mut. Auto. Ins. Co., 406
| Decision Date | 29 June 1973 |
| Docket Number | No. 406,406 |
| Citation | 60 Wis.2d 224,208 N.W.2d 442 |
| Parties | Daniel W. HOWARD, Recr. of the Assets of Caren Pfeffer, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INS. CO., a foreign corporation, Respondent. |
| Court | Wisconsin Supreme Court |
Warshafsky, Rotter & Tarnoff, Milwaukee, for appellant.
Otjen, Philipp & McFadyen, Milwaukee, for respondent; Ernest J. Philipp and William C. Whitten, Milwaukee, of counsel.
The plaintiff-appellant receiver alleges that claim adjusters and the attorney for State Farm were negligent and acted in bad faith in the handling of the Toomey claim and in their representation of Caren Pfeffer.
When, as here, the insurer undertakes and controls the defense of a claim against its insured, it has a duty not only to protect itself to the extent of its liability but it must act in good faith to protect the interest of its insured. If it fails to do so it is liable to its insured for the amount the insured required over and above the policy limits.
Baker v. Northwestern Nat. Casualty Co. (1965), 26 Wis.2d 306, 310, 132 N.W.2d 493, and the cases cited therein, set forth three specific duties that the insurer has to its insured. It must exercise ordinary care (1) to make a diligent effort to ascertain the facts, (2) after an investigation by the insurer, if the information it has reveals the probability that a recovery will exceed the policy limits, it must indicate such fact to the insured to the end that he may take such steps as may be open to him for his own protection, and (3) the insurer must keep the insured timely and adequately informed of any offers of settlement received from the claimant and of the progress of any settlement negotiations. If the jury finds that the insurer was negligent in performance of one or more of these duties and further finds, under the appropriate burden of proof, that the insurer did not act in good faith it is liable to the insured for the overage.
Extensive affidavits 2 were filed by both parties. They reveal the extent of the investigation by the adjusters for State Farm during the interval of several months after the accident and until commencement of the action, and of the attorney for State Farm thereafter and until the trial. The affidavits also set the diligent effort, perhaps advisedly so, of claimant's counsel to inform State Farm of the scope and severity of claimant's injuries and his attempts to negotiate a settlement. The facts concerning the advice or lack thereof given to Caren Pfeffer of the probable exposure, the negotiations for settlement, and the advisability of obtaining separate counsel also appear in these affidavits.
The trial court, in ruling on the motions, stated in part:
'. . . I don't believe he (plaintiff) set forth sufficient facts here to state that he is entitled to such relief.
'Likewise, I don't believe the affidavits of the defendant are sufficient to say that as a matter of law they are entitled to judgment from the uncontroverted facts.
'I think that the statements and the allegations and the inferences to be drawn from them are in conflict to the extent that this matter cannot be resolved by a motion for summary judgment on behalf of either party.'
In several recent cases we have held that neither party has a right to summary judgment and the ruling on the motion is discretionary. A statement of this rule appears in Zimmer v. Daun (1968), 40 Wis.2d 627, 630, 631, 162 N.W.2d 626, 3 627:
...
To continue reading
Request your trial
-
Kranzush v. Badger State Mut. Cas. Co.
...729 (1980); Howard v. State Farm Mutual Auto. L. Ins. Co., 70 Wis.2d 985, 236 N.W.2d 643 (1975); Howard v. State Farm Mutual Automobile Ins. Co., 60 Wis.2d 224, 208 N.W.2d 442 (1973); Nichols v. United States Fidelity & Guaranty Co., 37 Wis.2d 238, 155 N.W.2d 104 (1967); Baker v. Northweste......
-
Mowry v. Badger State Mut. Cas. Co.
...from the claimant and of the progress of any settlement negotiations." (Emphasis added.) Finally, in Howard v. State Farm Mut. Automobile Ins. Co., 60 Wis.2d 224, 227, 208 N.W.2d 442 (1973), the court expressly made clear that the duty to settle is contingent on the insurer actually underta......
-
Toy v. Metropolitan Life Ins. Co.
...Kan. 230, 519 P.2d 634 (1974); Members Mut. Ins. Co. v. Blissett, 254 Ark. 211, 492 S.W.2d 429 (1973); Howard v. State Farm Mut. Auto. Ins. Co., 60 Wis.2d 224, 208 N.W.2d 442 (1973); Thompson v. Commercial Union Ins. Co., 250 So.2d 259 (Fla.1971); State Auto. Ins. Co. v. Rowland, 221 Tenn. ......
-
A.W. Huss Co. v. Continental Cas. Co.
...729 (1980); Howard v. State Farm Mutual Auto. L. Ins. Co., 70 Wis.2d 985, 236 N.W.2d 643 (1975); Howard v. State Farm Mutual Automobile Ins. Co., 60 Wis.2d 224, 208 N.W.2d 442 (1973); Nichols v. United States Fidelity & Guaranty Co., 37 Wis.2d 238, 155 N.W.2d 104 (1967); Baker v. Northweste......