Rova Farms Resort, Inc. v. Investors Ins. Co. of America

Decision Date12 June 1973
PartiesROVA FARMS RESORT, INC., a New Jersey corporation, Plaintiff-Respondent and Cross-Appellant, v. INVESTORS INSURANCE COMPANY OF AMERICA, a New Jersey corporation, Defendant-Appellant and Cross-Respondent.
CourtNew Jersey Superior Court — Appellate Division

Marshall Selikoff, Rumson, for appellant (Lane, Evans & Selikoff, Rumson, attorneys).

Robert F. Novins, Toms River, for respondent (Edward F. Liston, Jr., Toms River, on the brief; Novins, Novins and Farley, Toms River, attorneys).

Before Judges FRITZ, LYNCH, and TRAUTWEIN.

PER CURIAM.

The question presented here is whether the failure of a liability insurer, under the circumstances here present, to offer without qualification its policy limits where there was no assurance from plaintiff that the action could be settled at or within the policy limits--I.e., in a situation in which there had been no firm demand--constituted a sufficient lack of good faith to bring the matter within the intent of Bowers v. Camden Fire Ins. Ass'n, 51 N.J. 62, 237 A.2d 857 (1968), and make such an insurer responsible for the entire subsequent verdict which exceeded those limits. Following a trial without a jury, the judge below answered this question in the affirmative. As that inquiry relates to the particular circumstances of this case, where the injuries were so substantial and where thepotential liability of the insured should have been reasonably obvious to a liability insurer irrespective of 'advice of counsel' we agree with the conclusion below.

We acknowledge that Bowers concerned a firm offer to settle within the policy limits and this case does not. While we thus extend the holding of Bowers, we neither extend nor depart from its basic tenet that, in settlement negotiations, liability insurance carriers shall be held closely to good faith in a responsible degree. As was said in Bowers:

Good faith is a broad concept. Whether it was adhered to by the carrier must depend upon the circumstances of the particular case. A decision not to settle must be a thoroughly honest, intelligent and objective one. It must be a realistic one when tested by the necessarily assumed expertise of the company. In cases like the present one, where the insurer recognizes the probability that an adverse verdict at the trial will exceed the limit of its policy, the boundaries of good faith become more compressed in favor of the insured. * * *. (...

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7 cases
  • Rova Farms Resort, Inc. v. Investors Ins. Co. of America
    • United States
    • New Jersey Supreme Court
    • 7 Agosto 1974
    ...of the Court was delivered by HUGHES, C.J. We consider here cross appeals from the Appellate Division affirmance (Rova v. Investors, 124 N.J.Super. 248, 306 A.2d 77 (1973)) of a judgment entered by a trial court, sitting without a jury, generally in favor of a plaintiff against the defendan......
  • American Physicians Ins. Exchange v. Garcia
    • United States
    • Texas Supreme Court
    • 9 Marzo 1994
    ...one jurisdiction apparently supports a rule that would impose such a general duty. 15 See Rova Farms Resort v. Investors Ins. Co. of Am., 124 N.J.Super. 248, 306 A.2d 77 (Ct.App.Div.1973) (per curiam), aff'd in part, 65 N.J. 474, 323 A.2d 495 (1974). In light of the fact that Maloney was in......
  • Marathon Ashland Pipe Line v. Maryland Casualty Co.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 16 Marzo 2001
    ...those limits constituted sufficient allegations of bad faith to survive summary judgment); Rova Farms Resort, Inc. v. Investors Ins. Co., 306 A.2d 77, 78-79 (N.J. Super. Ct. App. Div. 1973) (insurer's failure to offer policy limits constituted bad faith notwithstanding there was no assuranc......
  • Grier Lumber Co., Inc. v. Tryon
    • United States
    • Delaware Superior Court
    • 25 Marzo 1975
    ...v. Cook, 252 Iowa 1012, 109 N.W.2d 188 (1961), or action upon an honest or reasonable belief, Rova Farms Resort, Inc. v. Investors Ins. Co. of America, 124 N.J.Super. 248, 306 A.2d 77 (1973); Eldon's Super Fresh Stores, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 296 Minn. 130, 207......
  • Request a trial to view additional results
1 books & journal articles
  • Issues for excess insurer counsel in bad faith and excess liability cases.
    • United States
    • Defense Counsel Journal Vol. 62 No. 3, July 1995
    • 1 Julio 1995
    ...Ins. Co. v. Guin, 723 S.W.2d 656 (Tex. 1987). (24.)876 S.W.2d 842 (Tex. 1994), citing Rova Farms Resort Inc. v. Investors Ins. Co. of Am., 306 A.2d 77 (N.J.Super. 1973), aff'd in part, 323 A.2d 495 (N.J. 1974) (insurer has affirmative duty to explore settlement (25.)Crisci v. Sec. Ins. Co.,......

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