Self v. Allstate Insurance Company, 69-490 Civ. T.

• Decision Date: 09 June 1972
• Docket Number: No. 69-490 Civ. T.,69-490 Civ. T.
• Citation: 345 F. Supp. 191
• Parties: Bonita Jean SELF, Plaintiff, v. ALLSTATE INSURANCE COMPANY, a foreign corporation, Defendant.
• Court: U.S. District Court — Middle District of Florida

345 F. Supp. 191

Bonita Jean SELF, Plaintiff, v. ALLSTATE INSURANCE COMPANY, a foreign corporation, Defendant.

No. 69-490 Civ. T.

United States District Court, M. D. Florida, Tampa Division.

June 9, 1972.

B. J. Masterson, Masterson, Sundberg & Rogers, St. Petersburg, Fla., for plaintiff.

Vernon W. Evans, Jr., Shackleford, Farrior, Stallings & Evans, P. A., Tampa, Fla., for defendant.

OPINION

JOSEPH P. WILLSON, Senior District Judge (Sitting By Designation).

This diversity action is based on an insurance company's alleged bad faith in failing to settle certain personal injury claims within the limits of an insured's automobile liability insurance policy.

This civil action came on for trial non jury. In a pretrial stipulation counsel agreed on a number of facts essential to the disposition of this case which are as follows Plf. Ex. 2:

"AGREED FACTS"

"1. That the plaintiff, Bonita Jean Self, was involved in an automobile accident in St. Petersburg Beach, Florida, on May 30, 1967, and at that time her policy of insurance with Allstate Insurance Company was in full force and effect with limits of liability in the amount of $10,000.00 with injury to any one person.

"2. That as a result of the accident of May 30, 1967, a lawsuit was filed by Beatrice Kilian and Frederick John Kilian, her husband against Bonita Jean Self, John Christian Acker and Campbell's National Car Leasing, Inc. in the United States District Court for Tampa, Florida, Case No. 68-443 Civil T.

"3. That either prior to or during the trial of the original case 68-443 Civil T. the co-defendants, John Christian Acker and Campbell's National Car Leasing, Inc., entered into an agreement with the plaintiffs, Beatrice Kilian and Frederick John Kilian, limiting their liability, which type of agreement has come to be known as a `Mary Carter Agreement'.

"4. That Allstate Insurance Company was not aware of said `Mary Carter Agreement' prior to rendition of verdict upon the trial of that case.

"5. That upon the trial of the aforementioned case, the jury returned a verdict in favor of Beatrice Kilian and against Bonita Jean Self, John Christian Acker and Campbell's National Car Leasing, Inc., in the amount of $26,700.00 and in favor of Frederick John Kilian against Bonita Jean Self, John Christian Acker and Campbell's National Car Leasing, Inc., in the amount of $8,500.00 and costs were subsequently assessed in the amount of $612.70.

"6. That the judgment entered in favor of Beatrice Kilian and the judgment entered in favor of Frederick John Kilian remain unsatisfied to this date.

"7. That in the case styled Kilian v. Self, Acker, and Campbell's National Car Leasing, Inc., the parties were represented by the following counsel. For Bonita Jean Self, Robert Nunez of St. Petersburg, Florida; for Acker and Campbell's National Car Leasing, Inc., the firm of Macfarlane, Ferguson, Allison & Kelly of Tampa, Florida; for Beatrice and Frederick John Kilian the law firm of Hardee, Ott & Hamilton, of Tampa, Florida. Additionally, Bonita Jean Self was represented by the firm of Masterson, Lloyd, Sundberg & Rogers of St. Petersburg, Florida, but this firm did not participate in the actual trial of case No. 68-443 Civil T."

In the trial of this case witnesses have been heard, and the record in the prior case, that is, the Kilian case tried before Judge Ben Krentzman, No. 68-443 Civ. T., which was affirmed per curiam by the Court of Appeals, Kilian v. Campbell's National Car Leasing, 5 Cir., 433 F.2d 356, was introduced in evidence.

To reach the bad faith issue involved in the instant case, a review is necessary of the issues surrounding the injuries to the Kilians and of the settlement negotiations which took place thereafter among counsel for all parties. At the pretrial in the Kilian case, the facts agreed to were stated as follows Court's Ex. A:

"AGREED FACTS"

"The plaintiff and the two defendants were involved in a three-car automobile collision a short distance north of the intersection of Pass-A-Grille Way and 21st Avenue in Pass-A-Grille Beach, Pinellas County, Florida, on or about May 30, 1967, at approximately 3:30 P.M. The said intersection is controlled by a red, amber and green stop-and-go light. The plaintiff BEATRICE KILIAN was a passenger in an automobile owned and operated by her husband. The defendant BONITA JEAN SELF was the operator of an automobile owned by her, and the defendant JOHN C. ACKER, JR. was the operator of a vehicle owned by the defendant CAMPBELL'S NATIONAL CAR LEASING, INC. CAMPBELL'S NATIONAL CAR LEASING, INC. is a Florida corporation. All of the defendants are Florida residents. The plaintiffs are residents of the State of Texas. All of the vehicles were being operated in a northerly direction at the time of the accident, the order of the vehicles being that the first or northerly vehicle was that of the defendant SELF, the second or middle vehicle was that in which the plaintiff BEATRICE KILIAN was a passenger, and the third or southerly vehicle was that being operated by the defendant ACKER. The front of the KILIAN automobile struck the rear of the SELF automobile and the front of the ACKER automobile struck the rear of the KILIAN automobile. The time sequence as to when who struck who is disputed."

At the pretrial it is to be noticed also that Kilians, as plaintiffs, made the following contentions Court's Ex. A:

"PLAINTIFFS' CONTENTIONS"

"1. The defendant SELF made an improper stop in the middle of the northbound lane of Pass-A-Grille Way to talk with or pick up some boys on the side of the street and without pulling to the curb or giving any signal for stopping.

2. When the vehicle operated by the plaintiff FREDERICK JOHN KILIAN necessarily stopped behind the defendant SELF'S automobile, the defendant ACKER was not paying attention to his driving and did not see that the plaintiff's vehicle had necessarily come to a stop and crashed into the rear of plaintiff's vehicle, driving the plaintiff's vehicle into the defendant SELF'S vehicle and injuring the plaintiff BEATRICE KILIAN.

"3. That both the defendant SELF and the defendant ACKER were guilty of negligence in the operation of their vehicles and that each contributed to the injuries sustained by the plaintiff."

It should be stated also at this point that both defendant drivers in the Kilian case were minors, that is, Bonita Jean Self was 18 years of age, and John Christian Acker, Jr., was 20 years of age at the time of the accident. The Kilians were and are represented by C. J. Hardee, Jr., Esq., an experienced trial counsel of the Florida Bar. He at all times contended that both defendants were guilty of concurrent negligence in the Kilian accident. It was apparent that the Kilians were not guilty of any negligence so that from Mr. Hardee's viewpoint he had a good case on liability against two insured defendants.

His clients desired to settle the litigation. Their first demand was $30,000.00, but just prior to trial it was reduced to $15,000.00, and it is noticed that under the Mary Carter compromise the Kilians settled their case against Acker for $8,000.00. It is this Court's conclusion that had Allstate conducted settlement negotiations in good faith the claim against Miss Self, Allstate's insured, would have been settled well within the policy limits. It is clear in this record that Allstate arbitrarily refused to offer a single dollar in settlement of the Kilian claims.

This Court agrees and has adopted certain excerpts from the memorandum brief submitted by B. J. Masterson, Esq., attorney for Bonita Jean Self, on the issues before me. He says:

In the present case the carrier's insured was an eighteen year old girl.

The carrier recognized her immaturity by filing a motion for the appointment of a guardian ad litem to protect her interests. The carrier asked the court to appoint its attorney, Robert F. Nunez, as guardian ad litem and the court did so. As is stated in 17 Fla. Jur., Infants, Sect. 33, p. 340, "The guardian ad litem is responsible to the minor for his conduct in connection with the litigation as if he were a regularly qualified guardian." The appointment of the guardian ad litem was made pursuant to Federal Rule 17(c) and had the effect of making the minor plaintiff a ward of the court for the purpose of the litigation. It also had the effect of imposing an even higher duty upon the carrier's counsel to protect the interests of the ward.

The case thus presents a situation in which the insured, a young girl, who had been sued for damages for substantial personal injuries, was entirely dependent upon her insurance carrier for protection. The carrier had selected her attorney. The carrier controlled the investigation of the accident, the trial of the lawsuit, and the settlement negotiations. It also had its attorney appointed guardian ad litem of the minor insured. The insured was excluded from all participation in the preparation and trial of the case and from all settlement discussions. Plaintiff's Exhibit 1 (the Allstate file) conclusively establishes the extent to which the carrier controlled the case. The summaries of depositions, the evaluation reports, the reports of the status of the litigation and the determination not to negotiate are all matters of communication between Allstate and Mr. Nunez. . . . The end result of Allstate's handling of the entire case was a judgment for $35,812.70 against the young girl they were under a duty to protect. . . .

The result in the case of Kilian, et al. v. Self, et al. should have surprised no one. The report of the police officer who investigated the accident is incorporated in Plaintiff's Exhibit 1. It shows that the only driver charged with a violation of law was Miss Self. The depositions of the Kilians and their testimony at trial was that Miss Self had stopped suddenly (See page 98 of Excerpts of Transcript of Testimony). Finally, and most important of all, the "Attorney's Suit Status Report"

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