Hoyt v. Factory Mut. Liability Ins. Co. of America

• Decision Date: 27 June 1935
• Court: Connecticut Supreme Court
• Parties: HOYT v. FACTORY MUT. LIABILITY INS. CO. OF AMERICA.

179 A. 842

120 Conn. 156

HOYT v. FACTORY MUT. LIABILITY INS. CO. OF AMERICA.

Supreme Court of Errors of Connecticut.

June 27, 1935

Appeal from Superior Court, Fairfield County; Arthur F. Ells, Judge.

Action by Bessie N. Hoyt against the Factory Mutual Liability Insurance Company of America for failure of the defendant insurer of liability to settle suit against the plaintiff within the policy limit. Judgment for defendant, and plaintiff appeals.

No error.

Argued before MALTBIE, C.J., and HAINES, HINMAN, AVERY, and FOSTER JJ.

Insurer of motorist who struck child, in refusing to accept offer of settlement for $4,500, held not, as matter of law, to have failed to use that degree of care and prudence which person similarly placed would have used in management of own business; as regards liability of insurer to motorist for amount of judgment recovered by child and parents in excess of the $5,000 liability policy carried by motorist.

Philo C. Calhoun and Jonathan Grout, both of Bridgeport, for appellant.

Raymond E. Baldwin, of Bridgeport, for appellee.

MALTBIE, Chief Justice.

From the finding with such corrections as should be made in it the following situation appears: The defendant, whose home office is in Providence, R. I., issued to the plaintiff a policy of insurance covering liability arising out of the use of her automobile to the amount of $5,000. She injured an eight year old child, Minelda Lange, in an accident within the terms of the policy. She reported the accident to the defendant and this report was immediately transmitted to an attorney representing it at Bridgeport, Raymond E. Baldwin. He caused an investigation to be made by Sydney A. Johnson, another attorney. Mr. Johnson, under the direction of Mr. Baldwin, caused a physical examination to be made of the child. He gave to Mr. Baldwin written reports of his own investigation and of this examination. Thereafter an attorney for the Langes, fully acquainted with the facts of the case, corresponded with Mr. Baldwin and finally submitted an offer to accept $1,300 in full settlement and, on Mr. Baldwin's request, later sent a list of claimed expenditures, which amounted to $1,440.50. Mr. Baldwin submitted this offer to the defendant and advised its acceptance. The defendant replied that it was felt that it was questionable whether or not the plaintiff could be held legally responsible, that, in view of the failure of the child's parents to allow proper medical and surgical attention, it would be questionable whether the plaintiff could be held responsible for disability resulting from this failure and that an authorization of $800 to settle the case should be ample. Mr. Baldwin thereupon made an offer of $750 to the attorney for the Langes, which was refused.

Thereafter two actions were instituted against the plaintiff, one on behalf of the child for personal injuries, in which $25,000 damages were claimed, and the other by the mother for expenses incurred or to be incurred, in which $10,000 was claimed. Mr. Baldwin notified the present plaintiff that there was a possibility that the verdicts secured might exceed the amount of the policy and advised her that she should employ counsel to represent her in the actions, and she did so. Shortly previous to the trial, the Langes offered to accept $6,500 in settlement and later reduced this offer to $4,500; Mr. Baldwin advised the acceptance of the latter offer, and the attorney of the plaintiff notified the defendant that unless the offer were accepted she would hold them responsible for any recovery in excess of the face of the policy; but the offer was rejected by the officers of the...