dissenting. I cannot bring myself to a concurrence in the action of the court in this case. This court has clearly recognized, at least since Home Indemnity Company v. Snowden, 223 Ark. 64, 264 S.W. 2d 642,1 that a liability insurance company, which has virtually absolute control of settlement of a claim against its insured, at least when a settlement can be made by a payment within the policy limits, owes a duty to the policyholder to act in good faith and without negligence. I cannot subscribe to the unsound theory that an insurer should be liable for errors in judgment or want of the clairvoyance necessary to predict the amount of a jury verdict, especially where the question of liability is close and negligence must be compared. I think appellant is being penalized either for its failure to exercise good judgment, measured on the scale of hindsight, or its lack of intuitive ability to foresee, not only the result of the jury’s comparison of negligence, but, the amount which it would award as damages, particularly when a substantial part must have included awards for pain, suffering and mental anguish, present and future, and other elements of damage (such as loss of ability to earn and the husband’s loss of services and consortium) for which no one has discovered an adequate gauge other than the collective judgment of whoever might be the jurors in a particular case. See Blissett v. Frisby, 249 Ark. 235, 458 S.W. 2d 735. And this follows the court’s recent rejection of the idea that poor judgment can be equated with negligence. Tri-State Insurance Company v. Busby, 251 Ark. 568, 473 S.W. 2d 893. Infallibility in predicting the result of a case such as this should not be expected. The great possibility of an error in judgment, when so many intangible and imponderable factors are involved is well illustrated by the fact that the first trial in this case resulted in a hung jury by a vote which both Shackleford and Mays thought was 6 to 6. Shackleford’s testimony in explaining the prayer for damages in the complaint he filed for the Frisbys emphasized the uncertainty in predicting a jury verdict.
In my opinion, the correct rule as to these matters was followed by the United States Court of Appeals for the Fourth Circuit in American Casualty Co. of Reading, Pa. v. Howard, 187 F. 2d 322 (1951). That case bears a striking similarity to this, but the evidence is even stronger there because a demand for settlement was made by the insured, and the action for wrongful death was covered by a $5,000 policy. In reversing a judgment against the insurance company and dismissing the case, that court said:
Lawyers representing liability insurers of motor users are not required to be prophets who can accurately foretell the results of litigation in personal injury cases arising out of automobile accidents, nor does a mere mistake of judgment by these lawyers impose liability on these insurers beyond the policy limits of coverage. If these lawyers act reasonably, in good faith and without negligence in refusing proffered settlements, they, and the insurers they represent, have fully lived up to the duties imposed upon them. See, Bedford v. Armory Wholesale Grocery Co., 195 S.C. 150, 10 S.E. 2d 330; Lynch v. Pee Dee Express, 204 S.C. 537, 30 S.E. 2d 449; Farmers Gin Co. v. St. Paul Mercury Indemnity Co., 186 Miss. 747, 191 So. 415; Burnham v. Commercial Casualty Insurance Co., 10 Wash. 2d 624, 117 P. 2d 644.
The burden was upon appellee to show that appellant’s conduct in the matter was not the result of its failure to use good judgment but was the result of its negligence.2 In order that the question of the legal sufficiency of the evidence to meet this burden may be viewed in proper perspective, I must call attention to certain factors which I consider of some significance, but which are given little attention by the majority.
The first negotiations were conducted with an independent adjusting company acting on behalf of appellant. That company evaluated the claim at $3,000, and the report of its investigation was made to appellant. From this report, appellant’s assistant claims manager formed his opinion that Blissett was not at fault. Mays, the attorney employed by appellant to defend the Frisby suit, and upon whose advice appellant relied, never valued the claim, for settlement purposes, at more than $5,500. Not only did Blissett not demand settlement upon the basis of the offer made by Shackleford as attorney for the Frisbys, he did not even request or suggest that a settlement be made at this or any other figure. Blissett adamantly maintained that he was not at fault, even when he testified in this case. The greatest concession he ever made was his statement in that testimony that he could not have been any more at fault than Mrs. Frisby. Shackleford testified as to Mays’ great faith in Blissett’s defense. Blissett was advised, not only of the various steps taken but, of his right to employ his own attorney to protect his rights in view of the policy limits, but he chose not to avail himself of this right.
All negotiations after the filing of the Frisby suit were conducted between Shackleford and Mays. At one time, Mays asked Shackleford if the Frisbys would consider an amount less than their demand and was told that a lesser offer would be communicated to the Frisbys without Shackleford’s favorable recommendation unless the amount was somewhere near the demand. Shackleford indicated, in retrospective testimony, that he would have recommended a settlement for a total of approximately $8,000, but admitted that he never made an offer to settle for less than $8,700 plus costs. He recalled that Mays expressed the thought that a settlement might be reached. He would not deny that Mays inquired about a settlement in the range of $5,000 to $6,000 although he could not recall it. Mays testified that this inquiry was made at the request of Winchester, appellant’s assistant claims manager, and Shackleford indicated that if the company would offer no more than this, they might as well get ready to try the lawsuit. Shackleford testified that he had the definite impression that Mays’ suggestion of a $5,000 to $6,000 figure was on a “take-it-or-leave-it” basis, even if appellant would authorize it. Winchester confirmed the fact that he had requested that Mays ascertain from discussions with Shackleford whether there was room for further negotiations.
Mays was always of the opinion that the Frisby offer was in excess of a reasonable settlement value, and that total damages would not amount to more than the policy limits, even if the jury should find no negligence attributable to Mrs. Frisby. He doubted liability for certain out-of-pocket expenses3 and felt that Mrs. Frisby’s disability was not as substantial as claimed. He felt that the insured’s liability was highly questionable and that there was a reasonable possibility of a defendant’s verdict.
On the basis of the evidence, giving it the very highest probative value possible, I have been unable to see how there was anything more than a mistake in judgment on the part of the insurance company and its attorney. This brings me to a bit of testimony which appellee and the majority opinion emphasize. That is the testimony of the Blissetts that Mays responded to their question why the insurance company did not settle the claim by saying that “they were being stubborn.” Although there may be some question as to who he thought was being stubborn, the inference to be drawn from this testimony most favorable to appellee is that he referred to the insurance company. I do not consider this to be substantial evidence even though it was admitted without objection. I think that it is not substantial evidence because it has no probative value.
In the first place, this statement by the attorney was not binding on the client. An extrajudicial statement or admission by an attorney (made in the absence of the client and without his knowledge or consent) which is not given for the purpose of dispensing with proof of the fact admitted, is not binding on the client unless the attorney has special authority to make it, aside from his mere employment in connection with pending or prospective litigation. 7 Am. Jur. 2d 121, § 122; Hogenson v. Service Armament Co., 77 Wash. 2d 209, 461 P. 2d 311 (1969). See also, Geesey v. Albee Pennsylvania Homes, Inc., 211 Pa. Super. 215, 235 A. 2d 176 (1968). Such admissions are not evidence. Hicks v. Naomi Falls Mfg. Co., 138 N.C. 319, 50 S.E. 703 (1905). Furthermore, such a statement will not be binding if it. is not a statement of fact but a mere expression of an opinion. Cato v. Silling, 137 W. Va. 694, 73 S.E. 2d 731, cert. denied, 348 U.S. 981, 75 S. Ct. 572, 99 L. Ed. 764 (1952), reh. denied, 349 U.S. 924, 75 S. Ct. 659, 99 L. Ed. 1256 (1952); State v. Edins, 25 N. M. 680, 187 P. 545, 8 A.L.R. 1331 (1920); Hicks v. Naomi Falls Mfg. Co., supra. We have held that the mere statement of a witness’ conclusions without his detailing facts which would furnish a logical basis for his belief is not competent evidence to sustain a judgment. Couch v. Rockafellow, 205 Ark. 1153, 172 S.W. 2d 920. The statement of a mere conclusion has no probative force. United States v. Nelson, 102 F. 2d 515 (8th Cir. 1939), cert. denied, 308 U.S. 550, 60 S. Ct. 81, 84 L. Ed. 462 (1939).
Testimony of no probative value does not constitute substantial evidence. Substantial evidence means that which has probative force on the issues and is of legal significance. Tangora v. Matanky, 231 Cal. App. 2d 468, 42 Cal. Rptr. 348 (1964). Substantial evidentiary support requires evidence having a rational probative force. Consolidated Edison Co. v. L. R., 305 U. S. 197, 59 S. Ct. 206, 83 L. Ed. 126 (1938). In determining the legal sufficiency of the evidence to support a verdict (or to justify denial of a directed verdict) the question for the appellate court is whether the testimony, given its strongest probative force, is of a substantial character. St. Paul Fire & Marine Ins. Co. v. Martin, 204 Ark. XVIII, 165 S.W. 2d 606; Coca-Cola Bottling Co. v. Spurlin, 199 Ark. 126, 132 S.W: 2d 828; Western Union Telegraph Co. v. Byrd, 197 Ark. 152, 122 S.W. 2d 569; Hall v. Jones, 129 Ark. 18, 195 S.W. 399; Cleveland-McLeod Lumber Co. v. McLeod, 96 Ark. 405, 131 S.W. 878. Of course, it follows that evidence without probative value cannot be considered in determining legal sufficiency of the evidence. See Fleming v. Twiggs, 244 N.C. 666, 94 S.E. 2d 821 (1956). I submit that there was no substantial evidence of appellant’s negligence and that a verdict for appellant should have been directed.
Perhaps such a consideration is extraneous, but I shudder to think of the impact this decision will have on the cost of the minimum insurance required by the motor-vehicle safety responsibility act. Ark. Stat. Ann. § 75-1401, et. seq. (Repl. 1957). When liability for a recovery of amounts in excess of these limits may be imposed by a jury passing in judgment upon a difference of opinion as to the probable outcome and award in an automobile collision case, and the perfect vision of hindsight can be utilized, the minimum policy limits may well come to have little meaning in any case in which a claim could have been settled for less before trial, but was not. It also gives me pause when I consider the potential increase in the number of uninsured motorists likely to be driving on our highways because of the cost of protection within the minimum limits. Of course, this would mean that uninsured motorist coverage premiums would inevitably increase. Reverting to the opinion in American Casualty Co. v. Howard, supra, I find this further language of the Fourth Circuit Court of Appeals appropriate, viz:
We have adverted at some length to the duty of the insurer under the policy here to safeguard the interests of the insured. It should be remembered, though, that the premium on such policies varies with the insurer’s maximum limit of liability under the policy. Accordingly, when the insurer fully lives up to its duty, there is no right in the insured to compel the insurer to offer the amount of its maximum limit in order to effect the amicable settlement of a claim against the insured and to protect the insured against a possible judgment in excess of the policy limit. Insured can readily secure all needed protection by purchasing, and paying for, a policy with a high limit of liability on the insurer.
I would reverse the judgment and dismiss the case.
I am authorized to state that Mr. Justice Brown joins in this dissent.
It is interesting to recall that the court limited recovery in this case to the policy limits.
There was no evidence of fraud or bad faith. The first was not alleged. The trial court properly eliminated the latter as an issue.
See Blissett v. Frisby, 249 Ark. 235, 458 S.W. 2d 735.