Southern General Insurance v. Holt

Andrews, Judge,

concurring in part and dissenting in part.

1. I join in Divisions 1, 3, 4 and 5 of the majority opinion.

2. I respectfully dissent from the majority’s conclusion in Division 2 because basic elements of Fortson’s bad faith excess verdict claim were missing from this case. In order to avoid a directed verdict, basic tort law principles dictate that Fortson introduce evidence that Southern General breached a duty owed to Holt, and that such breach was the legal cause of harm to Holt. Although I agree with the majority’s conclusion that Holt was harmed, I disagree with the majority’s conclusion that the jury was authorized to find that a duty was breached, and that such breach was the proximate cause of Holt’s *773harm.

From my review of the record, I do not find that there was legally sufficient evidence that Southern General breached its duty to Holt to submit this issue to a jury. The duty an insurer owes to its insured in deciding whether to accept an offer of settlement within policy coverage is to “accord the interest of its insured the same faithful consideration it gives its own interest. . . .” Great American Ins. Co. v. Exum, 123 Ga. App. 515, 519 (181 SE2d 704) (1971); U. S. Fidelity &c. Co. v. Evans, 116 Ga. App. 93 (156 SE2d 809) (1967). Here, if Southern General, either through bad faith or negligence, failed to accord the same faithful consideration to Holt’s interests as it did to its own interests, Southern General would have breached its duty. See generally Home Ins. Co. v. North River Ins. Co., 192 Ga. App. 551, 556 (385 SE2d 736) (1989).

Construing the evidence in favor of Fortson, the opponent of the motion for directed verdict, a jury would have been authorized to find that, as of the date of expiration of the offer, Fortson’s attorney had provided information to Southern General indicating that the claim would exceed the limits of its policy coverage. The majority interprets this information as evidence of “failing to settle when the insured’s liability was uncontestable.” In rejecting an excess verdict claim under similar facts, the Fourth District Court of Appeals of Florida stated: “Since when does one party to a lawsuit have to accept at face value the medical information furnished by the other party without even an inquiry? The evidence here shows that appellee, its adjusters, and its counsel proceeded with all due haste to determine and evaluate their position, and they almost made plaintiff’s unreasonable deadline.” DeLaune v. Liberty Mut. Ins. Co., 314 S2d 601 at 603 (Fla. Dist. Ct. App. 1975).

Contrary to the majority’s implication, DeLaune, supra, did not simply uphold a jury verdict for the insurer applying an “any evidence” rule. Rather, the court held, “the evidence fails to prove any negligence, must less negligence rising to the level of bad faith. ...” DeLaune, supra at 602. DeLaune expresses the majority, and I believe better reasoned, analysis as to arbitrary time-restricted offers. See also Adduci v. Vigilant Ins. Co., 424 NE2d 645 (Ill. App. 1981); American Mut. Ins. Co. of Boston v. Bittle, 338 A2d 306 (Md. Ct. Spec. App. 1975); Clauss v. Fortune Ins. Co., 523 S2d 1177 (Fla. Dist. Ct. App. 1988); Baton v. Transamerica Ins. Co., 584 F2d 907 (9th Cir. 1978); Bailey v. Hardware Mut. Cas. Co., 322 FSupp. 387 (W.D. La. 1969); but see Andrews v. Central Surety Ins. Co., 271 FSupp. 814 (S.C. 1967).

The majority opinion, sub silentio, adopts a rule that an insurer is required to give the insured’s interests paramount consideration. This rule was specifically rejected in National Emblem Ins. Co. v. *774Pritchard, 140 Ga. App. 350 (231 SE2d 126) (1976).

Decided July 16, 1991 Reconsideration denied July 31, 1991 Freeman & Hawkins, Paul M. Hawkins, Edward M. Newsom, Michael J. Goldman, for appellant. Kelly, Denney, Pease & Allison, Allen C. Levi, Charles A. Gower, for appellees. Long, Weinberg, Ansley & Wheeler, Sidney F. Wheeler, amicus curiae.

Additionally, assuming for purposes of this decision that Southern General’s failure to accept the policy limits offer prior to the close of business on November 17, 1987, would authorize a jury to find that it had, through bad faith or negligence, breached its duty to Holt at that time, there is no evidence that the breach was the legal cause of Holt’s damage.3

Three days after the expiration of the policy limits offer to settle expired, Southern General offered to settle for the policy limits. This offer remained “on the table” through the entry of the verdict against Holt some seven months later. Thus, it was incumbent upon Fortson to prove that the legal cause of Holt’s harm was attributable to Southern General, rather than to Fortson, or Fortson’s attorney. “No facts sufficiently indicate why [Fortson] found it impossible to accept the offer at [another] time, so as to fairly place the blame for failure of settlement upon [Southern General].” Adduci, supra at 649.

Under the majority opinion, policy limits are meaningless in the face of a “Holt letter.” I cannot agree.

3. Because of my disagreement with the majority’s conclusion in Division 2, I necessarily must dissent from the majority’s conclusion in Division 6.

4. In light of my conclusion regarding Division 2, I believe that attorney Gower’s proper role in the case sub judice would be that of a witness, rather than of an advocate. Therefore, I respectfully dissent from Division 7 of the majority opinion.

I am authorized to state that Presiding Judge Birdsong joins in this dissent.

The majority also concludes “that appellant’s behavior in failing to inform Holt of the settlement offer . . . demonstrates bad faith or negligence in the refusal to settle a claim within policy limits. . . .” However, the majority fails to discuss how this might have contributed to Holt’s harm.