Lysick v. Walcom

• Decision Date: 23 January 1968
• Citation: 258 Cal.App.2d 136,65 Cal.Rptr. 406
• Court: California Court of Appeals Court of Appeals
• Parties: , 28 A.L.R.3d 368 Vera LYSICK, Individually, and as guardian ad litem of Vladimir Lysick, also known as Walter Lysick, a minor, Vladimir Lysick, also known as Walter Lysick, and Tatiana Lysick, Plaintiffs and Appellants, v. Leo J. WALCOM, Defendant and Respondent. Civ. 22740.

Page 406

65 Cal.Rptr. 406

258 Cal.App.2d 136, 28 A.L.R.3d 368

Vera LYSICK, Individually, and as guardian ad litem of Vladimir Lysick, also known as Walter Lysick, a minor, Vladimir Lysick, also known as Walter Lysick, and Tatiana Lysick, Plaintiffs and Appellants, v. Leo J. WALCOM, Defendant and Respondent.

Civ. 22740.

Court of Appeal, First District, Division 1, California.

Jan. 23, 1968.

Rehearing Denied Feb. 13, 1968.

Robert D. Barbagelata, Barbagelata, Zief & Carmazzi, San Francisco, for appellants.

Richard A. Boyd, San Francisco, for respondent; Cyril Viadro, San Francisco, of counsel.

MOLINARI, Presiding Justice.

In this action for damages for defendant's alleged bad faith and negligence in the performance of his duties as an attorney at law, plaintiffs appeal from the judgement entered upon a jury verdict in favor of defendant and from the order of the trial court denying plaintiffs' motion for judgement notwithstanding the verdict. Plaintiffs' contentions on appeal are that (1) the evidence is insufficient to support the verdict and therefore the trial court should have granted plaintiffs' motion for judgement notwithstanding the verdict; and (2) the trial court erred in instructing the jury that they were entitled to reject the opinions of the experts who testified on plaintiffs' behalf.

The Record

On December 16, 1956, as a result of a collision between an automobile driven by Bernard L. Rardin and one driven by Vitaly Lysick, said drivers and Alexander Lysick, Vitaly's passenger at the time of the accident, were all killed. At the time of this accident Rardin carried a policy of public liability insurance with Allstate Insurance Company, the limits of which policy were $5,000 for bodily injury to any one person and $10,000 for all bodily injury arising out of a single accident.

Following the accident, plaintiffs, Vera and Vladimar Lysick, the widow and son, respectively, of Vitaly Lysick, and Tatiana Lysick, the widow of Alexander Lysick, through their attorney, Henry Broderick, commenced negotiations with Allstate through one of its claims examiners, Samuel McGeachy, in an effort to secure Allstate's payment to plaintiffs of the $10,000 coverage available under the Rardin policy as damages for the death of their decedents. These negotiations led in January 1957 to an offer on the part of Allstate to settle plaintiffs' claims for $9,500, which offer was rejected by Broderick. Thereafter, on June 12, 1957, by letter from Broderick to the administrator of Rardin's estate, which was being probated in West Virginia, plaintiffs set forth their claims aggregating $450,000 against the estate of Rardin and offered to settle these claims for a total of $12,500. In this letter plaintiffs stated that the settlement offer would expire on July 15, 1957, whereupon suit would be filed against the estate.

Thereafter, on June 19, 1957, J. B. Heilmann, the attorney for Rardin's estate, wrote McGeachy, advising him of plaintiffs' claims and settlement offer ¹ and demanding of Allstate that it settle plaintiffs' claims to protect the estate from the threatened $450,000 action. ² Receipt of this letter was merely acknowledged by Allstate because, according to the Allstate inter-office memorandum concerning the letter, Allstate was 'reluctant to jump into settlement with claimant counsel at this point.' On July 10, 1957 Heilmann wrote another letter to McGeachy, again demanding that plaintiffs' claims be settled, expressing the willingness of the estate to contribute the $2,500 over and above the limits of Rardin's policy with Allstate, and further notifying McGeachy that the estate would hold Allstate liable for any judgement in favor of plaintiffs in excess of the $12,500 settlement offer. In response to this letter McGeachy wrote Heilmann on July 19, 1957, advising him that Allstate had made a settlement offer which Broderick had rejected and requesting him to forward to Allstate the expected suit papers. This request was complied with by Heilmann on July 23, 1957, following his receipt of the complaint which plaintiffs had filed in California on July 15, 1957, naming the administrator of Rardin's estate as the defendant in a wrongful death action. At the same time Heilmann again demanded of McGeachy that Allstate settle plaintiffs' claims.

On August 9, 1957, following McGeachy's receipt of the suit papers concerning the litigation between plaintiffs and the estate of Rardin, McGeachy, on behalf of Allstate, retained defendant to represent the estate in that action. ³ At that time McGeachy informed defendant that Allstate had accepted the case as one of liability and accordingly authorized defendant to pay up to $9,500 on behalf of Allstate in settlement of the case. In addition, McGeachy sent defendant the following documents: the file which had been prepared by Allstate in relation to the accident between plaintiffs and Rardin, McGeachy's copy of the June 12, 1957 letter from Broderick to Heilmann offering to settle the case for $12,500 and the letters of June 19, July 10, and July 23, 1957 from Heilmann to Allstate in which Heilmann demanded that Allstate pay the rull $10,000 coverage under its policy with Rardin in settlement of the case. Thereafter, on August 20, 1957 defendant's associate, John Harmon, advised Broderick that the $9,500 settlement offer from Allstate was still open. Broderick, however, again rejected this offer summarily. Accordingly, on August 21, 1957, defendant filed an answer to plaintiffs' complaint.

Thereafter, on August 29, 1957, defendant received a letter from McGeachy advising him that he could use $10,000 to settle the cases if he felt it was 'wise and expedient to do so.' ⁴ Because defendant was uncertain as to whether this letter in fact gave him authority to pay plaintiffs $10,000, defendant thereupon telephoned McGeachy for a clarification of Allstate's position as to settlement of plaintiffs' claims. In this conversation, according to defendant's testimony, McGeachy told defendant that the limits of Rardin's policy with Allstate were not to be paid to plaintiffs at this time, but that defendant could offer the full $10,000 at a 'propitious moment.'

Heilmann, in the meantime, was in correspondence with Broderick regarding the status of the wrongful death action and on October 15, 1957 reiterated, on behalf of the estate, that 'We stand ready now or at any time to pay the sum that we agreed upon by telephone and which I confirmed by letter.'

In November 1957 defendant and McGeachy again exchanged correspondence, McGeachy asking defendant if Broderick had 'cooled down sufficiently now to be reasonable about the matter and close it out' and defendant replying that he had not and that defendant could 'guarantee * * * that there will be an insistence that the full policy be paid.' On December 30, 1957 Everett C. Rardin, the administrator of the estate of Rardin, died, and thereafter an administrator De bonis non was appointed in his place. On February 5, 1958 Heilmann was advised for the first time, by letter from McGeachy, that defendant had been retained to defend the wrongful death action and was seeking to settle the suit and that Heilmann would be advised when a settlement was achieved.

A pretrial conference in the wrongful death action between plaintiffs and the estate of Rardin was held on September 11, 1958. At that time Harmon represented to the court that his authority was limited to a settlement offer of $9,500 on behalf of Allstate, whereupon trial was set for September 29, 1958.

Thereafter, a letter from Harmon to McGeachy dated September 17, 1958 and one from McGeachy to defendant dated September 16, 1958 crossed in the mail. In Harmon's letter he informed McGeachy that the pretrial conference had been held, stated that plaintiffs would not settle for anything less than $10,000, and concluded by stating, 'There is no doubt but what we will have to pay the full amount in this case, but we do not intend to offer it until the very last minute.' In McGeachy's letter he informed defendant that he (McGeachy) 'would be willing to offer $10,000 at this time' and suggested that defendant make a firm tender of settlement. This Harmon did by letter to Broderick on September 18, 1958. However, in response to this offer Broderick informed Harmon that he (Broderick) would settle only for $12,500 and that Harmon should contact the estate and obtain $2,500 and then send Broderick the appropriate release and dismissals. Thereupon, Harmon wrote a letter to Heilmann on September 23, 1958 in which, after informing the latter that Harmon's office had been retained by Allstate to represent the estate of Rardin in the lawsuit instituted by plaintiffs, Harmon stated that his office had offered plaintiffs $10,000 as settlement of the case but that plaintiffs had not yet indicated whether they would accept such offer. This letter was followed by a wire dated September 26, 1958 from defendant to Heilmann inquiring whether the estate wished to offer anything in addition to the $10,000 which Allstate would offer. In response to this wire Heilmann informed defendant by wire on September 27, 1958 that since Everett Rardin's death the estate was both unable and unwilling to contribute to the settlement, and that the only asset in the estate was an undivided interest in real estate, appraised at $3,000, which was being litigated by the heirs.

A settlement not having materialized, the wrongful death action went to trial by the court on September 29 and 30, 1958 and resulted in a judgement in favor of plaintiffs in the sum of $225,000. Thereafter, on October 2, 1959, after Allstate paid plaintiffs $10,684.75 toward partial satisfaction of the judgement against the estate of Rardin and after plaintiffs had obtained an assignment from the estate of Rardin for any cause of action which the estate might have against Allstate and defendant as a result of the entry of judgement...