Maroney v. Allstate Ins. Co.

Decision Date10 January 1961
Citation12 Wis.2d 197,107 N.W.2d 261
PartiesThomas P. MARONEY, as Receiver of George H. Weaver, Appellant, v. ALLSTATE INSURANCE CO., a foreign corporation, Respondent.
CourtWisconsin Supreme Court

George D. Young, Milwaukee, for respondent.

MARTIN, Chief Justice.

The receiver charges that Allstate acted in bad faith in failing to offer the policy limits of $10,000 to settle the Marschke claim. It is contended that a jury issue is raised (1) as to whether Allstate's acts and omissions with respect to the settlement negotiations prior to trial constituted bad faith, and (2) as to whether the insurer's conduct toward Weaver prior to trial constituted bad faith as a violation of its duty to keep him informed of developments and refrain from any conduct that would prejudice his rights and interests in the matter.

Appellant contends that Allstate knew Weaver's liability was clear, that the injuries were very great and damages would exceed the policy limits; that it knew the Marschkes were willing to settle for the policy limits before trial, but it refused to make such settlement.

In our opinion, no jury issue is raised as to Allstate's conduct of the settlement negotiations before trial. There is some dispute as to whether the insurer knew that the Marschkes were willing to accept the policy limits before trial, but the dispute is immaterial since its counsel states that after learning of the boy's recovery from his injuries and that he was doing manual work in 1953, he revised his estimate of the value of the case to between $7,500 and $8,500. As the trial court observed, it is not bad faith if counsel for a liability insurer refuses to settle the claim of an injured person under the bona fide belief that the insurer might defeat the action or keep the verdict within the policy limits. Considering all the undisputed facts presented in this case, it may be that the insurer acted negligently, exercising poor judgment, but it is not enough to show that it acted negligently in deciding to litigate rather than settle the case. 'Bad faith is a species of fraud, and the evidence to sustain a finding thereof must be clear, satisfactory, and convincing.' Berk v. Milwaukee Automobile Ins. Co., 1944, 245 Wis. 597, 601, 15 N.W.2d 834, 836.

Appellant contends it is also a jury question whether Allstate's actions toward the insured amounted to bad faith. He cites Hilker v. Western Automobile Ins. Co., 1931, 204 Wis. 1, 235 N.W. 413, rehearing, to the effect that an insurance company owes to its insured the duty to inform him if its investigation indicates a recovery will exceed the indemnity so...

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17 cases
  • Kranzush v. Badger State Mut. Cas. Co.
    • United States
    • Wisconsin Supreme Court
    • 30 Junio 1981
    ...238, 155 N.W.2d 104 (1967); Baker v. Northwestern National Casualty Co., 26 Wis.2d 306, 132 N.W.2d 493 (1965); Maroney v. Allstate Ins. Co., 12 Wis.2d 197, 107 N.W.2d 261 (1961); Berk v. Milwaukee Automobile Ins. Co., 245 Wis. 597, 15 N.W.2d 834 (1944); Lanferman v. Maryland Casualty Co., 2......
  • Estate of Genrich v. Ohic Ins. Co.
    • United States
    • Wisconsin Supreme Court
    • 7 Julio 2009
    ...Stat. § 893.55(1m)(a). Therefore, any factual dispute about which date should be applied is not material. Maroney v. Allstate Ins. Co., 12 Wis.2d 197, 202, 107 N.W.2d 261 (1961) (concluding that disputed facts that are "immaterial to the questions of law presented . . . do not afford a basi......
  • Mowry v. Badger State Mut. Cas. Co.
    • United States
    • Wisconsin Supreme Court
    • 30 Mayo 1986
    ...belief that the insurer might defeat the action...." Johnson, 93 Wis.2d at 646, 287 N.W.2d 729. See also, Maroney v. Allstate Ins. Co., 12 Wis.2d 197, 200-01, 107 N.W.2d 261 (1961). Although the "bona fide belief" language applies to a third party's action against the insured, we similarly ......
  • U.S. Fidelity & Guaranty Co. v. Evans
    • United States
    • Georgia Court of Appeals
    • 6 Junio 1967
    ...and in good faith believed the insurer not liable. Olson v. Union Fire Ins. Co., 174 Neb. 375, 118 N.W.2d 318; Maroney v. Allstate Ins. Co., 12 Wis.2d 197, 107 N.W.2d 261. And we have declared that '(i)f there is any reasonable ground for contesting the claim, there is no bad faith.' Pearl ......
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