Williams v. GEICO Casualty Co.
2013 Alas. LEXIS 8
Alaska2013Background
- Insurer GEICO sought declaratory relief to clarify duties under a policy following a tort case arising from a rental-truck crash; both Landt and Dushkin were heavily intoxicated; Shapsnikoff died from injuries after being hit and later loaded into the truck.
- GEICO offered settlements at policy limits multiple times; offers for both Landt and Dushkin were rejected; the estate later settled with confessions of judgment for about $4.68 million each.
- The insureds assigned their GEICO claims to the Shapsnikoffs; GEICO filed to determine who was driving, the occurrence count, and potential breaches; the superior court ruled largely in GEICO’s favor.
- The court held there was no second occurrence and no substantial likelihood of an excess verdict for a second occurrence; Landt and Dushkin were in material breach by confessing judgment, extinguishing coverage; GEICO was awarded attorney’s fees as prevailing party.
- The Shapsnikoffs appeal GEICO’s non-breach finding, the second-occurrence ruling, the excess-verdict standard, the confession of judgment, and the attorney’s-fees award; the Alaska Supreme Court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to settle when multiple insureds may be liable | Shapsnikoffs contend GEICO should have settled for Landt alone or for both in separate settlements. | GEICO sought to settle for a single policy-limit release to avoid unfairness and argued it had to defend both insureds. | GEICO did not breach; settling for one policy limit to release both insureds was proper. |
| Whether there was a second occurrence | Shapsnikoffs contend that loading Shapsnikoff into the truck constituted a second occurrence. | GEICO argued no second occurrence occurred given timing and injuries. | No second occurrence found; findings supported by evidence. |
| Substantial likelihood of excess verdict on second occurrence | There was substantial likelihood of an excess verdict necessitating a full policy- limits offer. | There was not a great risk of excess verdict for the second occurrence. | Not a substantial likelihood; single-policy settlement appropriate. |
| Breach by confessing judgment; cooperation clause | Confession breached the contract; bad faith excuses coverage. | Insurer properly refused non‑defensible settlements; cooperation clause breached by insureds, not insurer. | Insureds breached by confessing judgment; no coverage remains; GEICO not in breach. |
| Attorneys’ fees to GEICO | Policyholders claim awarding fees to insurer is improper. | GEICO prevailed; fees appropriate; AS 09.17.080(d) not applicable here. | Affirmed award of attorney’s fees to GEICO. |
Key Cases Cited
- Jackson v. Am. Equity Ins. Co., 90 P.3d 136 (Alaska 2004) (duty to offer policy limits when substantial likelihood of excess verdict)
- Stewart v. Elliott, 239 P.3d 1236 (Alaska 2010) (duty to defend and settlement standards in Alaska)
- Casey v. Semco Energy, Inc., 92 P.3d 379 (Alaska 2004) (contract interpretation of insurance and coverage expectations)
- DeNardo v. Cutler, 167 P.3d 674 (Alaska 2007) (implied covenant of good faith and fair dealing in insurance)
- Whitney v. State Farm Mut. Auto. Ins. Co., 258 P.3d 113 (Alaska 2011) (insurer's duty to settle and consequences of bad faith)
- Bohna v. Hughes, Thorsness, Gantz, Powell & Brundin, 828 P.2d 745 (Alaska 1992) (interpretation of settlement duties under policy and coverage)
- In re Protective Proceedings of W.A., 193 P.3d 743 (Alaska 2008) (quoting and applying case law on insurer duties)