Whitney v. State Farm Mutual Automobile Insurance Co.
258 P.3d 113
Alaska2011Background
- Whitney drove a pickup and caused a collision injuring bicyclist Giannechini; Whitney’s State Farm policy had $100,000 single limit and $300,000 per occurrence, with potential stacking issues across multiple family policies.
- Libbey, Giannechini’s counsel, sent an April 5, 2007 settlement letter claiming stacked coverage and offering to settle for policy limits of all applicable policies; Libbey provided no legal basis for stacking.
- State Farm responded May 2, 2007 with a policy-limits offer of $100,000 plus interest and fees, declining Libbey’s stacking and imposing conditions; Libbey’s offer prompted no immediate acceptance.
- Giannechini sued Whitney in September 2007; State Farm anticipated a potential excess verdict and determined the claim value between $375,000 and $475,000.
- In October 2008, the parties settled Whitney’s liability for $950,000 in exchange for Giannechini not executing against Whitney, and Whitney assigned rights to pursue State Farm; State Farm later prevailed in federal declaratory relief in November 2008.
- Whitney filed suit in May 2009 alleging bad faith and breach of the duty to settle; State Farm moved for partial summary judgment on the duty to settle, which the superior court granted in part but via a draft order broader than the motion; final judgment in State Farm’s favor was entered June 16, 2010, after stipulations and dismissal of remaining claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the superior court exceeded the scope of the motion for partial summary judgment. | Whitney argues the order swept beyond the narrow issue. | State Farm concedes the draft order was broader than the motion. | Yes; reversed to the extent the order exceeded the narrow issue, remanding for proper proceedings. |
Key Cases Cited
- Jackson v. Am. Equity Ins. Co., 90 P.3d 136 (Alaska 2004) (duty to tender policy limits in response to policy limits demands)
- Bohna v. Hughes, Thorsness, Gantz, Powell & Brundin, 828 P.2d 745 (Alaska 1992) (established Bohna/Jackson duty framework for tender of policy limits)
- Guin v. Ha, 591 P.2d 1281 (Alaska 1979) (implied covenant of good faith and fair dealing in insurance)