Johnson v. Hardware Mut. Cas. Co.
| Decision Date | 04 October 1938 |
| Docket Number | No. 1267.,1267. |
| Citation | 1 A.2d 817 |
| Parties | JOHNSON v. HARDWARE MUT. CASUALTY CO. |
| Court | Vermont Supreme Court |
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Exceptions from Windsor County Court; Charles A. Shields, Judge.
Action by W. O. Johnson against the Hardware Mutual Casualty Company, to recover amount paid by plaintiff in excess of the coverage of an automobile liability policy, in settlement of a judgment against plaintiff allegedly obtained because of defendant's bad faith in refusing to accept settlement. From a judgment on a verdict for plaintiff, defendant brings exceptions.
Affirmed.
Argued before POWERS, C. J., and SLACK, MOULTON, SHERBURNE, and BUTTLES, JJ.
Wilson, Carver, Davis & Keyser, of Barre, for plaintiff.
Herbert G. Barber, of Brattleboro, and Edwin W. Hadlcy, of Boston, Mass., for defendant.
When the case was reversed and remanded by this Court, Johnson v. Hardware Mut. Casualty Co., 108 Vt. 269, 288, 187 A. 788, the rescript contained the following provision [page 797]: "* * * with leave to apply for an amendment if plaintiff be so advised." This being so, it did not stand in the county court like the ordinary case remanded by us. Strictly taken the first step to be taken by the plaintiff in that court was to apply for and obtain leave to amend the complaint; and until that was done, the case was not for trial. The plaintiff did not take this view of it. He considered that the case was in the county court and subject to its rules. He treats it here as a case covered by county court rule 14, par. 3, which provides that, on continuance of a case, either party may amend his pleadings within one month from the rising of the court. But whatever irregularity or fault adhered in the course taken by court or counsel in that regard was cured by the subsequent proceedings. The record shows that the question of amendments was heard before a single superior judge, who, upon consideration, allowed amendments to be made, and it was before the county court, which, upon consideration, allowed further amendments to be made. The defendant appeared and participated in both of these hearings. So we think that its rights have been sufficiently protected, and its exceptions to these allowances are overruled.
The defendant insists that the amended complaint is duplicitous, repetitious, prolix, obscure and uncertain, and for these reasons it should be stricken and expunged in its entirety. But these are faults of form only; and it is expressly provided in the Practice Act that a pleading shall not fail for want of form, and that the sufficiency of pleadings in this respect shall be for the discretionary determination of the trial court. P.L. 1578. We find nothing here warranting further comment.
The defendant vigorously and confidently maintains that the amendments allowed by the court introduce a new cause of action. If the defendant is right in this contention, the amendments were erroneously allowed, for the Practice Act, P.L. 1572 et seq., does not protect them. Burleson v. Fox, 101 Vt. 225, 228, 143 A. 298, and cases cited.
It has been thought that the determination of this question of the identity of the cause of action in different counts is attended with some difficulty. But it should not be in this jurisdiction, for it has been passed upon in many cases. We have repeatedly and correctly said that "the true test is whether the proposed amendment is a different matter or the same matter more fully or differently laid." Schlitz v. Lowell Mutual Fire Ins, Co., 96 Vt. 337, 340, 119 A. 513, 514; Patterson's Adm'r v. Modern Woodmen of America, 89 Vt. 305, 312, 95 A. 692; Davis' Adm'x v. Rutland R. Co., 82 Vt. 24, 29, 71 A. 724. The rule thus expressed traces back to Daley v. Gates, 65 Vt. 591, 592, 27 A. 193, where it is thus stated: "The test is whether the proposed amendment is a different matter,—another subject of controversy,—or the same matter, more fully or differently laid, to meet the possible scope and varying phases of the testimony." And Judge Rowell there said: "An amendment cannot be allowed that introduces a new cause of action; but as long as the plaintiff adheres to the contract or the injury originally declared upon, an alteration of the modes in which the defendant has broken the contract or caused the injury is not an introduction of a new cause of action." In Slayton v. Davis, 85 Vt. 87, 89, 81 A. 232, we said, in effect, that the "cause of action"—the "matter" referred to in the rule—is the facts which give rise to a right of action. Apply this rule to the case in hand: The original action was predicated upon the failure of the defendant to settle the case of Rule v. Johnson, 104 Vt. 486, 162 A. 383, before it went to trial in the county court. That is what the plaintiff complained about when he brought this suit against the defendant. That is just what he is complaining about now. He characterized that failure as negligence then; he characterizes it as bad faith now. The fundamental facts in the original cornplaint are the same as those in the amended complaint. The "matter" of the two complaints is the same. The "subject of controversy" is the same. Whatever terms you may use, the cause of action was not changed, and the amendments were properly allowed.
The defendant by its policy regularly issued insured the plaintiff against liability for personal injuries and property damage due to his ownership and use of his automobile. The plaintiff was involved in an accident while driving his automobile and suits for damages were brought against him. Negotiations for a settlement of these suits failed, and a trial in Windsor county court resulted in a verdict much larger than the coverage of the policy, and the plaintiff had to pay out of his own pocket.
It is for the recovery of the sum so paid that the plaintiff brings this suit.
When the plaintiff accepted the policy referred to, he surrendered to the defendant the complete control and management of any suit that might be brought against him for any claim which would involve liability on the part of the company. It was so stipulated in the policy. This is unquestionably so up to the limit of the coverage of the policy, though the plaintiff may have had a right to buy his peace as to any damages above that coverage.
When the company accepted the premium charged for the policy, it impliedly undertook to use this control and management for the mutual benefit of the parties to the contract. Their relations became mutually fiduciary; and each owed the other the duty of the utmost good faith in their dealings together, and in exercising the privileges and discharging the duties specified in and incident to the policy contract. The plaintiff engaged to cooperate with the company if a loss threatened. He was bound to do so honestly and with all good fidelity. The company was equally bound so to handle the Rule Case. It had a right to look after its own interests, but it was bound to have due regard for the plaintiff's interests, as well. If in what it did and refused to do, it acted honestly and according to its best judgment, this suit must fail. If on the contrary, it used its authority over the case of Rule v. Johnson, supra, to save itself from as much of the loss as possible, in disregard of the plaintiff's rights, consciously risking loss to the plaintiff to save loss to itself, the suit must succeed; for that would be bad faith, while its relation to the plaintiff demanded good faith. As applied to this case, bad faith on the part of the defendant would be the intentional disregard of the financial interests of the plaintiff in the hope of escaping the full responsibility imposed upon it by its policy.*
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 Casualty Co. v. Cook-O'Brien Construction Co., 8 Cir, 69 F.2d 462, 464; Maryland Casualty Co. v. Elmira Coal Co., 8 Cir, 69 F.2d 616, 618; American Mutual Liability Ins. Co. v. Cooper, 5 Cir, 61 F.2d 446, 448; Noshey v. American Automobile Ins. Co., 6 Cir, 68 F 2d 808, 810; Aycock Hosiery Mills v. Maryland Casualty Co., 157 Tenn. 559, 11 S.W.2d 889, 892. Reference may also be had to the minority opinion in City of Wakefield v. Globe Indemnity Co., 246 Mich. 645, 225 N.W. 643, 645, which states the law to the approval of the majority, the dissent being upon the application of the facts.
The issue raised by the defendant's exception to the denial of its motion for a directed verdict was whether there was substantial evidence from which, if believed, and excluding the effect of modifying evidence, the jury could reasonably infer that the defendant acted in bad faith in the manner alleged. Ste. Marie v. Wells, 93 Vt. 398, 399, 108 A. 270. In passing upon this question we view the evidence in the most favorable light for the plaintiff. Higgins v. Metzger, 101 Vt. 285, 291, 143 A. 394. We do not pass upon the credibility of the witnesses, because the tendency of the evidence and not its weight is to be considered. Cummings v. Insurance Co., 101 Vt. 73, 85, 142 A. 82. If there is evidence fairly and reasonably tending to support the plaintiff's claim it is immaterial to the motion that such evidence is contradicted, for contradictions and opposing inferences are for the jury. Comeau v. Manuel & Sons Co., 84 Vt. 501, 509, 80 A. 51. And so, too, when the testimony is not impossible, although it may be unreasonable or inconsistent. Robie v. Boston & M. R. R, 91 Vt. 386, 388, 100 A. 925. Therefore, in deciding this issue we do not consider that portion of the defendant's brief which is devoted to a discussion of the credibility of the plaintiff.
Under the policy of liability insurance issued by the defendant to the...
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