27 Ohio C.C. (n.s.) 536 | Ohio Ct. App. | 1917
The defendant issued to the plaintiff a policy to indemnify it to the extent of $5,000 against loss by reason of liability which might be imposed by law upon plaintiff if any of its employes should accidentally suffer bodily injuries while employed in plaintiff’s factory, and within the provisions of the policy. During the term of the policy one of plaintiff’s employes, named Joe Fogach, was injured, which injuries were accidentally suffered and were alleged to have been suffered through the negligence of the plaintiff herein while Fogach was such employe in plaintiff’s factory. The policy of indemnity provided as follows:
“G. Except as herein elsewhere provided for, the assured shall not voluntarily assume any*346 liability, settle any claim, or incur any expense except at his own costs, or interfere in any negotiation for settlement or legal proceeding without the consent of the corporation previously given in writing.
“L No action shall lie against the corporation to recover for any loss under this policy unless it shall be brought by the assured for loss actually sustained and paid by him in money in satisfaction of a judgment after trial of the issue.”
An action was brought by Fogach against his employers to recover for the injury suffered by him, and while it was pending negotiations for settlement occurred. The case was not settled, but proceeded to trial, and resulted in a verdict and judgment in favor of Fogach in the sum of $20,000, which amount was paid by The Cleveland Wire Spring Company, plaintiff in this case.
The petition in the present action contains three causes of action, the first cause being based on the policy, to recover the amount thereof, to-wit, $5,000. The second cause of action is based upon a clause in the policy rendering the indemnity company liable for immediate and imperative medical and surgical relief, and is for $49.75. These two causes of action have been adjudicated in favor of the plaintiff in this case and are not involved in the controversy now pending between the parties.
The third cause of action was met by a demurrer, filed by the defendant, which demurrer was sustained, and final judgment on that cause of action rendered against the plaintiff.
The petition further averred that this plaintiff did employ counsel, and negotiated with said Joe Fogach and his attorneys for the purpose of settling the claim, and as a result of such negotiations obtained a proposition of settlement in the sum of $7,500; that it communicated the offer of settlement to the indemnity company and agreed to pay, in order to effect the settlement, an amount equal to the difference between $7,500 and the amount of the maximum liability of $5,000 stipulated in the policy to be paid by the indemnity company.
The petition further averred that the indemnity company thereupon stated to plaintiff that it would not pay in settlement any sum of money in excess of $3,500, and that if settlement was to be made, this plaintiff must pay the difference between said amount of $3,500 and the amount of the proposed settlement, $7,500. The plaintiff averred that the
The theory of the plaintiff in this action is that the indemnity company impliedly agreed to exercise good faith in its conduct under the contract of indemnify, and that having, as plaintiff claims, failed so to do, it is liable in tort for the damages proximately resulting therefrom. We are quite in accord with the plaintiff’s contention that the duty rested upon the indemnity company to exercise good faith under the contract relations existing between the parties, and it will become necessary to recur to the averments of the third cause of action to ascertain whether they do set forth such facts as may amount to a charge of bad faith.
The contract of indemnity rendered the company liable only for loss actually suffered and paid by the assured in satisfaction of a judgment after trial of the issue. It, of course, can not be contended that liability arose, by virtue of the provisions of the policy, in excess of the maximum amount of $5-,000 specified therein, and for im
The indemnity company, however, had the right, to estimate and value that probability. It might well take the position, that, while the verdict would probably be in excess of the amount of its policy, it might not be so; and it had the right, under the terms of the policy, to require that the action should be litigated in order to definitely settle and determine the amount of the liability, if any. Evi
The precise question under consideration does not appear to have been determined in very many reported cases, but the principles determining liability in such cases have been announced in some very respectable authorities.
Schmidt v. Travelers Insurance Co., 244 Pa. St., 286, was a case in which under an indemnity policy of $5,000 settlement could have been effected for $6,000, the assured offering to contribute $1,000 to the amount and requesting the indemnity company to make settlement, which was refused. The trial resulted in a verdict and judgment for $9,200. It is true that the report of this case does not show that bad faith was specifically charged against the indemnity company, as is claimed to be charged in the petition in the instant case; but the petition in the case cited did set forth the facts already stated, and the only difference of importance between that case and the case now under consideration is that in this case the defendant
Brown & McCabe, Stevedores, Inc., v. London Guarantee & Accident Co., 232 Fed. Rep., 298, is another case shedding much light on the question under consideration. In that case the report shows that the indemnity company recognized its liability, and this fact distinguishes it from one in which the averment is only that there is strong probability of a verdict being rendered in excess of the amount of the policy. The court, in the case last cited, uses this language in the course of the opinion:
“It has been held that, under a policy like the one in question, the insurance company has a right to settle with an injured employe or not, as it deems advisable, and if it neglects or refuses to do so, and litigates the matter in good faith, and judgment is recovered for more than the face of the policy, it is not liable for the excess.”
While announcing the rule as above státed, it held that the case was not within its terms, because it appeared to be an attempted hold-up of the assured. The averments in the case at bar do not show that the indemnity company undertook to hold up the assured, nor that it exercised bad faith, but rather that the parties were all negotiating in an attempt to make such a settlement as would be advantageous to all parties concerned.
We find nothing in the case of Brassil v. Maryland Casualty Co., 210 N. Y., 235, inconsistent with the views expressed in this opinion.
The judgment will be affirmed.
Judgment affirmed.