Tully v. Travelers Ins. Co., Civ. A. No. 415-T.
| Decision Date | 03 February 1954 |
| Docket Number | Civ. A. No. 415-T. |
| Parties | TULLY v. TRAVELERS INS. CO. |
| Court | U.S. District Court — Northern District of Florida |
Gwynn & Shelley, Tallahassee, Fla., for plaintiff.
Meginniss, Thompson & Morrison, Tallahassee, Fla., for defendant.
DE VANE, Chief Judge.
This is a suit brought by plaintiff against defendant to recover the difference in the amount of a judgment recovered against plaintiff by a third party and the amount of a liability insurance policy issued by defendant to plaintiff.
The suit is predicated on the allegation of negligence and bad faith on the part of defendant in refusing to settle an action, within the coverage of the policy, brought against plaintiff by one Wiley Richard Lee for injuries received by him by reason of the negligent act of plaintiff's employee in the operation of an automobile owned by plaintiff. The facts in the case are not in dispute and the case is before the court on a motion for summary judgment filed by each party.
The complaint alleges and the evidence shows that on or about September 25, 1951 a Ford truck owned by plaintiff and operated by one of his employees, was in an automobile accident with a truck owned by Kent M. Saunders, doing business as Tom's Toasted Peanuts, and operated by Lee, an employee of Saunders. Lee was severely injured in the accident and brought suit against plaintiff, which, upon trial before a jury, resulted in a verdict in Lee's favor and against plaintiff in the sum of $15,000. The insurance policy issued by defendant to plaintiff carried a maximum liability of $10,000, with the usual provision in such policies that the insurance company reserved the right to take complete charge of the litigation and to conduct the case in such manner as it saw fit to do. The evidence further shows that an offer was made by Lee, through his counsel, to settle the case for $9,000, prior to trial, which offer was refused by the insurance company.
There remains no doubt of the law applicable to cases of this character that by the great weight of authority an insurer must act in good faith towards its insured in the defense and settlement of claims which, under its policy, it has the exclusive right to defend and settle, and is liable in damages to the assured for failure to do so. Auto Mut. Indemnity Co. v. Shaw, 134 Fla. 815, 184 So. 852; American Mut. Liability Ins. Co. v. Cooper, 5 Cir., 61 F.2d 446; Home Indemnity Co. v. Williamson, 5 Cir., 183 F. 2d 572 and Hall v. Preferred Acc. Ins. Co. of New York, 5 Cir., 204 F.2d 844.
The question before the court is whether the undisputed evidence in this case supports plaintiff's claim of negligence and bad faith in failing and refusing to settle the action within the limits of the policy when it had an opportunity to do so.
The evidence discloses that defendant not only carried insurance for plaintiff's protection, but it also carried insurance for the protection of Kent M. Saunders, the owner of the truck being operated by Lee. Immediately upon the institution of the suit by Lee against plaintiff, counsel employed by defendant was notified that defendant had outstanding policies covering the owner of each truck involved in the accident. In acknowledging receipt of the summons served upon defendant, under date of October 11, 1951, counsel for defendant commented upon this fact, as follows:
(Plaintiff's Exhibit C.)
This letter was written before anything other than a cursory examination of the facts in the case had been made. On December 11, 1951, after a more thorough examination had been made defendant's claims manager in Florida sent to its local agent in Tallahassee a memorandum containing the following:
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