Kuzmanich v. United Fire & Cas. Co.

Decision Date09 February 1966
PartiesMatt KUZMANICH, Jr., Executor of the Estate of Matt Kuzmanich, Appellant, v. UNITED FIRE AND CASUALTY COMPANY, Respondent.
CourtOregon Supreme Court

Donald D. McKown, Hillsboro, argued the cause for appellant. With him on the brief was Paul M. Reeder, Hillsboro.

Robert D. Geddes, Portland, argued the cause for respondent. With him on the brief were Davies, Biggs, Strayer, Stoel & Boley, and George H. Fraser, Portland.

Before SLOAN, P. J., and GOODWIN, DENECKE, HOLMAN, and LUSK, JJ.

HOLMAN, Justice.

Plaintiff is the executor of the estate of Matt Kuzmanich. Defendant insurance company issued a policy of automobile liability insurance to decedent with $10,000 limits for injury to one person. There was no coverage if someone under 25 years of age was operating the vehicle. Decedent and his wife, Mary, made a trip in decedent's automobile from Portland to Tacoma to attend a picnic. They had with them Matt's nephew, Marin Kuzmanich who was 21 years of age. While on the trip an accident occurred in the state of Washington in which serious injuries were received by both Matt and Marin. Matt died shortly after the accident from these injuries and Marin was rendered permanently unconscious until his death 18 months later.

Marin's guardian brought an action against Matt's estate for his special damages and $150,000 general damages, claiming Matt was negligent in the operation of his automobile. There was a dispute as to whether Matt or Marin was driving at the time of the accident; and, if Matt was the operator, whether Marin was a guest under Washington law; and, if Marin was a guest, whether Matt was grossly negligent.

At the time of trial Marin was still unconscious. His doctor and hospital bills were as large as the policy limits. Marin's guardian offered to settle for the policy limits, and plaintiff demanded that defendant so settle. Defendant refused and chose to defend the action. A judgment for $25,000 in Marin's favor was rendered against Matt's estate and defendant paid its policy limits. Plaintiff thereafter brought this action for the unpaid balance of $15,000 plus attorneys' fees, claiming defendant was negligent and did not exercise good faith in failing to settle Marin's claim within policy limits.

The case was tried by the trial court without the intervention of a jury. The court found that defendant was not negligent and had not exercised bad faith, and therefore entered judgment for defendant. Plaintiff appealed.

In a law action tried by the court without a jury the findings of the court have the force and effect of a jury verdict and must be affirmed on appeal if supported by any substantial evidence. Constitution of Oregon, Article VII, Sec. 3; ORS 17.435; State Highway Comm'n v. Kendrick, 227 Or. 608, 612, 613, 363 P.2d 1078 (1961); Honeywell v. Turner, 214 Or. 700, 705, 706, 332 P.2d 638 (1958).

As a result, the only issue is whether there was substantial evidence to support the trial court's findings. This requires an examination of the evidence, keeping in mind the standards of conduct, in relation to its insured, that the law places upon an insurance company. This is somewhat difficult because there is available to the court no transcript of the first trial in which the $25,000 judgment was rendered. The actual evidence introduced in that case is now only a matter of recollection in the minds of the witnesses in the present case.

An insurer owes to its insured the duty of due diligence and good faith. In determining whether to settle claims against the insured, the insurer must act as if it were liable for the entire judgment that might eventually be entered against the insured. In addition, 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. Radcliffe v. Franklin Nat'l Ins. Co., 208 Or. 1, 47, 48, 298 P.2d 1002 (1956).

Marin was healthy and nice looking, had a high-school education and had...

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21 cases
  • Bailey v. Universal Underwriters Ins. Co.
    • United States
    • Oregon Supreme Court
    • September 23, 1970
    ...and reasonable standard to apply in such situations and is not unduly burdensome to insurers.' See also Kuzmanich v. United Fire and Casualty Co., 242 Or. 529, 532, 410 P.2d 812 (1966). To the same effect, see Tennessee Farmers Mutual Insurance Co. v. Wood, Supra, 277 F.2d at 34, (an excess......
  • Georgetown Realty, Inc. v. Home Ins. Co.
    • United States
    • Oregon Supreme Court
    • May 1, 1992
    ...the evidence was insufficient to permit a jury to find bad faith. Id. at 607-09, 540 P.2d 364; see also Kuzmanich v. United Fire and Casualty, 242 Or. 529, 532, 410 P.2d 812 (1966) (restating Radcliffe's good faith test). Farris v. U.S. Fidelity & Guaranty, 273 Or. 628, 542 P.2d 1031 (1975)......
  • Tyler v. Grange Ins. Ass'n
    • United States
    • Washington Court of Appeals
    • August 3, 1970
    ...A.2d 857 (1968); American Fid. & Casualty Co. v. L. C. Jones Trucking Co., 321 P.2d 685, 687 (Okl.1957); Kuzmanich v. United Fire & Cas. Co., 242 Or. 529, 532, 410 P.2d 812, 813 (1966); Radcliffe v. Franklin Nat'l Ins. Co. of N.Y., 208 Or. 1, 298 P.2d 1002 (1956).6 Applying this test to the......
  • Buntin v. Continental Ins. Co.
    • United States
    • U.S. District Court — Virgin Islands
    • November 2, 1981
    ...1957); Baxter v. Royal Indem. Co., 285 So.2d 652 (Fla.App.1973), cert. dism'd, 317 So.2d 725 (Fla.1975); Kuzmanich v. United Fire & Casualty, 242 Or. 529, 410 P.2d 812 (Or.1966); Keeton, supra, at 1146 and As previously noted, when an insurer rejects a settlement offer within policy limits ......
  • Request a trial to view additional results
1 books & journal articles
  • CHAPTER 6
    • United States
    • Full Court Press Zalma on Property and Casualty Insurance
    • Invalid date
    ...of the insurer. Eastham v. Oregon Auto Ins. Co., 273 Or. 600, 607, 540 P.2d 364 (1975); Kuzmanich v. United Fire and Cas. Co., 242 Or. 529, 532, 410 P.2d 812 (1966); Radcliffe v. Franklin Nat. Ins. Co. of N. Y., 208 Or. 1, 38, 298 P.2d 1002 (1956). Plaintiffs use the language of these cases......

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