St. Paul Fire & Marine Ins. Co. v. U.S. Fidelity & Guaranty Co.
Decision Date | 21 March 1978 |
Citation | 404 N.Y.S.2d 552,43 N.Y.2d 977,375 N.E.2d 733 |
Parties | , 375 N.E.2d 733 ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Respondent, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Appellant. |
Court | New York Court of Appeals Court of Appeals |
The order of the Appellate Division should be affirmed, with costs.
Although an insurance company in exclusive control of its insureds' defense cannot be compelled to concede liability and settle a questionable claim before proof has been developed on all sides (e. g., Knobloch v. Royal Globe Ins. Co., 38 N.Y.2d 471, 381 N.Y.S.2d 433, 344 N.E.2d 364), the defendant in this case refused to settle a claim in excess of its policy limits after liability had already been determined solely on factual issues by a jury (see Di Tomasso v. Brookhattan Utilities, 40 A.D.2d 989, 338 N.Y.S.2d 590, mot. for lv. to app. den. 32 N.Y.2d 609, 342 N.Y.S.2d 1025, 295 N.E.2d 655). Under these circumstances, with liability having been established at trial, the excess carrier alone was placed at further risk due to the defendant's intractable opposition to any settlement of the claim.
Given a record which adequately supports these affirmed findings, amounting to a breach of the defendant's implied obligation to manage its insureds' defense in good faith (see, e. g., Gordon v. Nationwide Mut. Ins. Co., 30 N.Y.2d 427, 334 N.Y.S.2d 601, 285 N.E.2d 849, cert. den. 410 U.S. 931, 93 S.Ct. 1374, 35 L.Ed.2d 593; cf. Insurance Law, § 40-d, added by L.1970, ch. 296, § 1), the imposition of liability for the excess judgment borne by the plaintiff was appropriate (see Kulak v. Nationwide Mut. Ins. Co., 40 N.Y.2d 140, 386 N.Y.S.2d 87, 351 N.E.2d 735; Decker v. Amalgamated Mut. Cas. Ins. Co., 35 N.Y.2d 950, 365 N.Y.S.2d 172, 324 N.E.2d 552).
Order affirmed.
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