*2 BOOCHEVER, J.,C. W- Before RABINO BURKE, JJ., ITZ, DI- CONNOR and MOND, Senior Justice.
BURKE, Justice. *3 appeal presents arising This issues from company’s insurance refusal to uncondi- tionally its insured and the insured’s defend subsequent to settle the case. decision Roberts, (here- and Appellee Bayless Inc. R) B & one of defendants inafter three wrongful action. B & R’s de- in a death its fense in action was undertaken carrier, appellant Conti- insurance Company, pursuant nental Insurance to of its As the case terms insurance contract. con- trial Continental became proceeded R, its through one of vinced B & officers, cooperate had breached result, case. in the defense of the As a RB & that it would Continental informed only if R would continue B & defend to a of Continental’s agree reservation of the deny liability ground later accept R alleged breach. B & refused to therefore, and, such a conditioned defense from case. Continental withdrew action, agreed tort B & R settled the $618,000, entry of a consent for its chief then Continental and and sued judg- the amount of the adjuster recover punitive damages. ment as well as in an went to trial and resulted case award $622,000 R, damages to B based on jury’s and its finding that Continental Stanford, negligently adjuster, Arthur defense, B R’s conducted & duty to had breached its insurance Continental and Stan- defend insured. appeal. We affirm brought then ford superior court. of the
I. Facts 22, 1970, May Marvin Warbelow On Brown, Gibbs, Smith, Hagans, M. Sanford injured explosion paint of a fatally by Gibbs, Anchorage, appellants Erwin & using paint an aircraft. which he pot cross-appellees. filed an action subsequently His widow Matthews, Matthews, Jr., wrongful a survival action Warren W. death and court, naming Parr- Anchorage, superior Lance C. defendants Bailey, Dunn & Decora, Inc., R, paint pot; ish, Fairbanks, Cross-appel- owner of the appellee and paint pot; manufacturer of the lant. 2, 1971, slightly the seller air affidavit on December Sears, of the Roebuck and and a after Warbe- year more than a half supplied air regulator compressor months la- injured. low was About eleven paint pot. pressure to ter, 25, 1972, deposi- on October Roberts’s of its Pursuant to the terms Gantz, who Anchorage. tion was taken in contract,1 Continental undertook the de- present deposition, was unable to be at the action, retaining an R of B & in the fense associates, Link, one sent of his Jonathan attorney, Richard Gantz of experienced During the appear on B & R’s behalf. Thorsness, Lowe, Hughes, Gantz and Clark knowledge of deposition denied all Roberts During Anchorage, purpose. of the transfer circumstances case, investigation of its the course paint pot Roberts’s to Warbelow.3 investigator sent take a deposition testimony was in conflict with Roberts, from Robert an officer statement in- previous statement to Continental’s explained his state- of B & R. Roberts *4 vestigator signed Wheth- and his affidavit. lend agreed paint that he to the ment had for attempted prepare er Link to Roberts Warbelow, cus- who was business pot to deposition by showing copy of his him and close friend of Roberts. This tomer disputed. or previous statement affidavit to attorney was forwarded Gantz statement Although Link was aware of the contradic- it to an affidavit which prepare statements, who used stop not tion Roberts’s he did planned support of a motion for with taking deposition he file in of the to consult signed Immediately following deposi- summary judgment.2 Roberts this Roberts. deposition, policy provided pertinent part (empha- 3.During made the fol- Roberts 1. The added): lowing statements: sis company pay Sears, will on behalf of Are for Roebuck & [Counsel Co.] Q. insured insured all sums which the shall be- you familiar with the circumstances how legally pay damages obligated as come got paint possession into tank because of Marvin Warbelow? bodily injury A. or A. No. [Roberts] property damage B. you got posses- know how it into his Do Q. applies, by an to which occurrence, caused sion? company shall and the have A. No. any and defend suit you know the loca- Do how it left O.K. Q. damages seeking on account of such insured bulk tion where it was at Standard Oil bodily injury damage, any property if or even plant got to Cathedral Bluffs? and groundless, allegations the suit are Only they somebody picked up. A. that it — fraudulent, may make in- false or and such That is all I know. vestigation any or and settlement claim expedient, but the suit as it deems Decora, Well, for how do [Counsel Q. you Inc.] any pay obligated not be claim or shall got suppose Marvin that that Warbelow suit or to defend after paint pot, get it if he did all? at applicable company’s liability has limit of picked up A. it and took it. Whether Just judgments payment of been exhausted it, he one of his men took I took it or hired settlements. don’t know. Nobody you permis- came and for asked Q. affidavit, was 2. Roberts’s which based on sion it? to use investiga- to the information tor, his statement (cid:127) A. No. pertinent part: stated in early spring winter or Some time in the late you do year for And [Counsel Q. Warbelow] of the 1970 the decedent Marvin Warbe- you personally do know how Mar- indicated me that he to do low wished not — vin looking pot? painting paint he was obtained some and that Warbelow that paint pot purpose. 1 told I him that A. No. n had piece particular equipment seen this paint to me as a which pot lying been identified Link, [Attorney B Did counsel for & R] Q. that, around, while I had you going know that Marvin was to use ever it was in or whether it idea what condition pot? paint workable, take it if was he could he wanted No, A. 1 didn’t know. gift or a to. Whether it a loan was pot never used the discussed we had had no use it. Roberts, they imposed dis- The no sanctions met with tion Link change deposition respect the need to R in Warbelow’s claim. Gantz cussed 30(e), Alas- signed. See Rule it subsequently before informed Stanford of the situ- however, Gantz, subsequently R.Civ.P. ka suggested ation and Stanford al- deposition, not to correct decided might appropriate be Continental at Roberts though he write a letter to did B R point send & a reservation of in his state- out the inconsistencies pointing rights request, letter. At Stanford’s Gantz necessity of tell- emphasizing ments and drafted a form letter sent it to Stan- ing the truth at trial. ford. began The trial of the Warbelow matter When moved Decora for sanctions and 27,1972, November Fairbanks. imposed, when were again sanctions Gantz jury, to the Gantz stated opening statement explained might possi- that it Roberts paint pot to War- Roberts had lent the for Continental to raise a defense ble facts, which This statement below. ruling. judge’s based on the Gantz offered affidavit, was in based on Roberts’s representation of B to withdraw from the outlined in Gantz’s accord with the facts inter- potential of his conflict of R because descrip- pretrial memorandum. Since this The first time Gantz discussed this est. paint acquisition of the tion of Warbelow’s Roberts, was sat- with Roberts indicated he with Rob- was inconsistent pot, representation. Following isfied Decora, deposition, one of the other erts’s early with Gantz Jan- another discussion *5 case, Civil moved under defendants firm uary, B & R retained the of 37(d) and of for sanctions a dismissal Rule Ingraham Niewohner in Fairbanks to and B & against Decora the cross-claim filed Continental, represent its interests. 9, to Arthur Gantz wrote R. On December turn, Hagans, of Smith retained the firm Stanford, adjuster, in- claims Continental’s and Brown. deposition presented dicating that Roberts’s 7, 1973, attorney Ingraham “very By January problem” might be dam- a “real and the insur- had learned of the status of the aging.” The letter also informed current for case, Decora had moved including ance the fact that Decora and cross-claim $108,- and dismissal sanctions had with for settled Warbelow Sears might file a similar and that Warbelow $350,000 respectively, 125 and and that motion. a offer B Warbelow had made settlement $160,000.5 8, Ingraham January R of On & subse- predicted, As Warbelow Gantz had demanding ac- wrote Continental joined Decora’s motion for sanc- quently outstanding settlement offer of cept the court, 19, On December the trial tions. $160,000,contending that such an offer was 37(d), Rule dismissed Civil proceeding under 9, policy January On Conti- a within limits.6 against Decora as B & R’s cross-claim Ingraham the reserva- swearing.”4 nental delivered to for Roberts’s “false sanction R.Civ.P., explicit response, 37(d), gave ure. Parrish during subsequent but Rule Alaska authorizes 4. recess, comment, impose party fails to when a without court to appear sanctions Among paper deposition. dropped piece the authorized table for of paper he front of Gantz. This dismissing 160,- figure order . . . sanctions “[a]n had the any part proceeding or thereof the action that this 000 written on it. Gantz assumed was 37(b)(2)(C) 37(d), Alaska relayed . .” . . Rules and this information a settlement offer imposition The of sanctions R.Civ.P. court’s to Roberts. Parrish later to Continental and appealed, do on was not and we not comment Ingraham offer was out- told that a settlement propriety. Also on December its $160,000. standing recommended for Gantz jurors had declared a mistrial because several developed offer, accept the but it refused. that Continental serious time conflicts. Selection January jurors for a trial started on new $100,000. policy was 6.The face amount of 1973. provided payment Since also fees, however, $160,- attorney’s costs January, Following resumption of the trial in 5. necessarily figure exceed did Parrish, approached attorney Gantz Bob limits. Warbelow, fig- possible settlement discuss jury. case was tried before a At the pre- The which Gantz rights notice tion of notice, which The di- 20. moved for a pared on December end of the trial Stanford B R from letter to & of a in the form liability, on the issue of his rected verdict Brown, E. attorney Keith Continental’s that motion on the the court denied but continue would that Continental stated fiduciary did owe a ground Stanford R but would of B & its defense conduct this deci- appeals B R. duty to & Stanford coverage to disclaim “reserv[e] granted B & R’s mo- The court then sion. against Bayless found liability be should against verdict Continen- tion for a directed findings Roberts, upon the based B R’s breach tal on the issue of & rejected the Ingraham Judge Taylor.”7 clause, jury instructing the cooperation a reservation' under proposed defense coopera- duty that B & R had fulfilled letter day that Brown’s rights on thé same granting of appeals the tion. Continental uncondi- delivered and demanded this motion. This de- defense Continental. tional call rejected, telephone in a mand jury on four The case then went to the that Continen- Ingraham, Brown stated Stanford, (1) in his individual issues: Did to defend B was to continue tal’s intention adjuster, negligent- act capacity a claims rights. On R under a reservation (2) act B R? Did Continental ly toward & into a consent B & R entered January (3) Did B & R? Conti- in bad faith toward $618,- judgment in favor of Warbelow (4) negligently toward & R? nental act B R day Warbelow and & That same duty to defend B breach its Did Continental agreement whereby Warbelow signed an & R? execute on the agreed not to had acted jury found that Stanford except its claim of B & R assets return, B & R B R In that he was liable to & negligently Continental. against Conti- its claim agreed prosecute that, $10,000. although found assign any proceeds of and to nental faith, it in bad had not acted claim to Warbelow.8 negligently and had breached had acted with B & R. In accordance to defend agreement, compliance *6 8, 1973, instructions, jury B R filed suit then February the court’s complaint The and Stanford. $618,000 damages Continental B R awarded to & defend refusal to alleged that Continental’s $4,000 negligence and in dam- Continental’s rights consti- reservation of except under a ages for its failure to defend.9 fiduciary duty to B & of its tuted a breach subsequently moved for a re- Continental breached also that Stanford R. It paid the amounts of the verdict duction adequately fiduciary duty failing to under by Decora and Sears to Warbelow claim and in fail- investigate the Warbelow agreements. The court de- settlement their Continental, R, ing fully to inform & motion, appeals and Continental nied that the case. Continental of the facts of Gantz and that decision. Both Continental Stan- counterclaimed, B R alleging that & then judgment notwith- ford also moved for obligation under the breached its had trial, or for a new on standing the verdict of the claim. cooperate in the defense to liability court later ruled that Stanford’s are as we 9.The continued: “If the facts 7. The letter them, ruling joint obligation Judge’s and Stan- re- of Continental if the was understand and and, such, effect, part of Mr. Roberts “a of and not the statements ford mains constitute a wilful failure cooperate verdict cumulative of the Continental thereof, a result the law suit and as in favor of B & defense of there . ." The total . . coverage.” may $803,358.25: $622,000; be a lack of insurance R prejudgment $101,510.40; verdict of amounting 6%, interest at agree- subsequent $73,201 to this 8. In a amendment attorney’s under fees of pursue agreed its claim R.Civ.P.; ment B R also and costs of Alaska Rule $6,646.85. Thorsness, Gantz; Hughes, against Richard Clark; Adjust- Lowe, Gantz and Underwriters Stanford, ers; assign and to and Arthur proceeds to Warbelow. thereof appeal contends on that he had allegedly com- Stanford various errors the basis of The court denied during the trial. duty mitted B R his contract with to & under motions, and and Stan- these Continental subject which would him B R has appeal that decision. & ford also liability. He relies on two Califor personal cross-appeal, contending that filed a the proposition nia cases which stand for inadequate instructions gave trial court that, adjuster party since is not a a claims good faith of Continental’s the issue insurance, is he not bound contract reversed, that, it should if the is good implied covenant of faith issue. a new trial on that have dealing duty and thus owes no to com fair Adjuster Liability of II. Insurance Gruenberg Aet ply with that covenant. v. Stanford 566, 108Cal.Rptr. Insurance 9 Cal.3d na manager the branch Arthur Stanford 480, 487, 510 1032, 1039(1973); P.2d Iverson Adjusting Company in An- of Underwriters Court, (Cal. Superior Cal.Rptr. v. is a sub- chorage. Adjusting Underwriters App.1976). Corporation and sidiary of Continental Iverson, sued his the insured department of Con- functions as the claims supervisor for company’s claims failure Company, sub- tinental Insurance another Corporation. Conti- sidiary accept of Continental limits. settlement within War- assigned adjustment nental that, although The Iverson court held against B & R to below claim Stanford. settle would consti- unreasonable failure to case a breach of the insurer’s contractual complaint B & instant tute R’s allegation relevant following included the dealing, faith fair duty good n toStanford: supervisor no contractual claims owed adequately failed Defendant Stanford 127 Cal.Rptr. good faith to insured. claim, failed investigate Warbelow court, however, specifi- at 51. The Iverson the facts which he plaintiff inform one cally distinguished that situation from determined, fully inform and failed agent which an the insurer committed attorney or the defendant Continental The held against the insured. a tort the case. by it of the facts of employed upon depend would agent’s that the gross These acts were done recovery: theory plaintiff’s disregard for the interests wanton al- employee is argues that [Plaintiff] Roberts, in breach Bayless and Inc. and ways regardless his own torts liable for fiduciary duty. of a employer is also liable. whether his on this adduced at trial evidence proposition argument ignores First, categories. plain- issue into two fell if his conduct employee only is liable that, although proof tiffs introduced Stan- *7 duty. Iverson did tortious breach inconsistency of the in Roberts’s ford knew good by him. duty breach a faith owed 13, 1972, testimony on November by [plaintiff], it alleged No other tort 1972, 9, by Gantz on December informed having abandoned its untena- apparently prob- a “real deposition presented that the pleading incorporates claim that the ble lem,” B R of the not inform & he did for fraud. cause of action de- potential policy conflict of interest and that, Second, al- testified fense. Stanford Iver- (citation omitted). under Id deposition Con- though prior to the Roberts could not be held reasoning, Stanford son’s tinental him to settle had authorized duty of fiduciary of the liable a breach $10,000, he had never communicat- case arising insurance con- good faith out of the of- Gantz nor had he ever ed fact to tract, negli- liable for but he could held during the course of fered that amount general arising out of breach gence evidence, case. At the close of the Stanford ordinary care. tort issue moved a directed verdict is consistent This conclusion R, the trial court liability to & and Fulton Insurance our decision in Austin v. denied the motion. 288 1972). Austin, acknowledges gener that the
Co.,
(Alaska
In
Continental
289
rights
reservation of
coverage
able
the
situation.
first,
the
asserts a
insurer
where
arise,
validity
may
if
defense,
the
of The first conflict .which
the
admits
the insurer
particular
a
it can later assert non-cover-
insurer knows
policy but contends
the
coverage
only
it
offer
a token de-
age,
may
not
within the
is that
does
come
claini
situa-
the
In the second
of
insured.
If the insurer does not
by
policy.
fense
its
provided
tion,
policy
defending
asserts a
de-
which it is
where the insurer
think that the loss on
fense,12
the claim
policy, may
the insurer admits
under the
it
not
will be covered
coverage provided
the
the
possible
comes within
be motivated to achieve the lowest
policy itself is
ways
contends that the
policy but
in other
treat
the inter-
settlement or
insured’s
of
the
unenforceable
because
its
its
second
ests of
insured as
own. The
policy.
the
In
of
breach of
condition
a particular
when success on
conflict arises
contract
short,
repudiates the
the insurer
the
theory
recovery
of
case
prior
to
because of
perform
and refuses
in the denial of cover-
insured would result
party. Boise and Fer-
by the other
case,
breach
age
policy.
In that
under
possible approaches
guson represent
two
would have an interest
company
The case at
coverage defense situation.
seeing
piaintiff
obtain a verdict
however,
policy
bar,
an asserted
involves
which no cover-
theory
based on the
under
defense,
we
not
that the two
do
believe
example,
plain-
age would result. For
if
necessarily
the same con-
involve
situations
negligence and an inten-
tiff
both
decision,
reaching
our
In
siderations.
of recov-
tional tort as alternative theories
therefore,
only
de-
we consider
operating
an
under a reserva-
ery,
insurer
ques-
open the
We leave
fense situation.
covertly
rights might
of
frame
de-
tion
has the same obli-
the insurer
tion whether
com-
upon
a verdict based
fense
achieve
coverage
in the
de-
gations and liabilities
tort,
it
the intentional
so
mission of
fense situation.13
later assert
the defendant
could
covered,
policy provided no
since the
purpose
the Boise rule —that
The
of
torts.
In the ab-
coverage for intentional
com-
accept the insurance
insured need not
rights agreement,
sence
a reservation
defense under
pany’s offer of a conditional
would be liable for
the insurer
conflicts
rights
avoid
a reservation
—is
regardless of whether
and its
indemnification
interest between
intén-
negligence
foresee-
verdict established
of conflicts are
types
insured. Two
deny coverage
estopped it to
under the
between
tense
For
discussion of the distinction
12.
defenses,”
“policy
“coverage
policy.
see
defenses”
Declaratory
Browne,
Judg-
The Demise
Afean, however,
only
dealt
with the conse
Testing the Insur-
as a Device for
ment Action
quences
P.2d at
of the failure to defend. 595
Postscript,
Duty
A
24
to Defend:
Clev.St.L.
er's
have not been confronted
646-47. We
(1975).
29-30
Rev.
decide,
question,
and we do not
whether
duty
a claim under a
insurer’s defense of
Fire,
of Afcan v. Mutual
recent case
estop
coverage
contest
defend clause does
(Alaska
Inland Ins.
293
425,
Security
v.
Insurance
66 Cal.2d
58
attorney employed
part
173,
insured,
13, 17-18, 426 P.2d
177-78
Cal.Rptr.
company to defend
Resort,
(1967); Rova
Inc. v. Inves-
from as-
Farms
the insurance
forecloses
America,
474,
tors
cooperation clause
Insurance Co.
N.J.
serting
breach of the
(1974).20
Dyke
507-13
Van
v.
A.2d
think
its insured. See
White,
devolving
“responsibility
upon
349 P.2d
insurer
55 Wash.2d
(1960).
accurately
under modern conditions” is
de-
*12
scribed as follows:
the trial court’s deci-
We therefore affirm
It
has more than a
of care of an
B & motion for a directed
grant
sion to
R’s
litigation;
ordinary man unskilled in
it
verdict.
good
must exercise more than mere
faith.
Liability
V.
Above Face Amount
It
professional
by
is a
which advertises
all
Policy
of
its
of
communication
skill in
media mass
jury found that Continental had
settlement,
investigation,
litiga-
and
the
it
B R
negligently,
awarded &
acted
and
cases. It asks the
liability
tion of
individ-
$618,000
damages.
compensatory
Since
ual,
is
these
who
an amateur in
matters
to find that Continental had
jury
the
failed
deeply
who
concerned over
but
would
faith, Continental contends
acted in bad
personally
a
he is
case which
interest-
denying
erred in
its
that
the trial court
his,
ed,
judg-
substitute its skill for
its
notwithstanding
judgment
motion for
judgment,
his
its
ment for
and
conduct
argues
verdict or a new trial. Continental
his own acts.
It
then becomes
for
liability
not exceed
that
its
could
chargeable
greater duty
with
—even
jury’s finding
Continental
limits: “The
that
greater
surgeon
the brain
must exercise
its
cannot
‘negligently defended
insured’
knowledge, judgment, and skill
a brain
damages greater than
support an award of
operation
general practi-
would
than
$100,000obligation under the
the carrier’s
It
not an
tioner of medicine.
is
extraor-
policy.”
degree
care
is
dinary
of care but the
argu
reject
Continental’s
particular circum-
required under these
jurisdictions holding
join
ment and
those
diligently
It must use skill
and
stances.
insurer, defending an action
case,
that an
investigate a
it must
adequately to
insured,
against the
is bound to exercise
must select
negotiation,
use skill
it
of
degree
of
which a man
ordi
care
trial
the lowest
skilled
counsel—not
nary
exercise in man
prudence would
priced
indi-
member of
bar—and that
affairs,
if
agement of his- own
and
vidual,
it, may
by
so
bind
selected
is
fails to meet that standard it
insurer
It
by
is not a
insurer
this derelictions.
of
to the
for the excess
liable
insured
liability
spot
comfortable
for
insurer
limits,
judgment
irrespec
over the
occupy, but
seeks the business on the
it
is to say,
tive
fraud or
faith. That
bad
attorney,
its
an
basis of
skill. Even as
undertaking a defense must
an insurer
abstractor,
may
physician
accountant or
faith,
only good
but also
exercise
degree of
if he fails to use the
be liable
diligence
ordinary care
reasonable
and
handling
professional
of a
skill
and caution.
expect
that one is entitled to
matter
abilities,
training and
possessing
and
one
like
Appleman,
7C J.
Insurance Law
Prac-
legal
4687,
1979)(foot-
accept
so
duties
(Berdal
at
must
insurer
tice
ed.
§
omitted,
added).
responsibilities.
emphasis
*13
conduct of
inde-
with
negligent
proceed
for the
an
ruled on. We will
such
liable
attorney
trial
whom the carrier has
pendent
action,
you
until
have contacted
litigation.
v.
hired to conduct
Merritt
have
insurance carrier and
received
Co., Cal.App.3d
34
Reserve Insurance
this is in
with their
word that
accordance
Cal.Rptr.
(1973), the
110
511
California
[Emphasis
wishes.
added.]
Appeal
independent
of
that if an
Court
held
overriding
of
Further indication
this
con-
attorney,
by
perform
retained
an insurer
cern
insurer
for the
can be discerned from
services, negligently
professional
conducts
suggested
was
fact that it
Gantz who
insured,
of
“the remedy
the defense
that
time
the company
Stanford at
that
negligence
is found in an action
this
rights
sent a
of
letter
should
reservation
malpractice and not
counsel for
in a suit
prepared
and Gantz who
a draft
impose
counsel’s
vicari-
employer
company’s
same for the
consideration. Giv-
liability.”
at 527. The Merritt
ous
Id.
circumstances,
reject
en
we
these
hold-
reasoned
the insurance
court
ing
expressed
in Merritt for the view
in
negligent
be
for the
should not
held liable
Farm
Smoot v. State
Mutual Automobile
contractor,
independent
especial-
acts of
(5th
1962):
Insurance
295 agreement. Judgment sence a contract —a settlement Because YI. Reduction adjudication certainly It was not an Settlement on and Decora the Sears of the Warbelow claim. The nature merits 10, 1973, January B & R On judgment24 aptly a consent has been Warbelow, and agreement reached by described one court entered for the judgment consent compromise one on the consent or based $618,000. contends amount parties. agreement between the A com- legal has judgment the same that a consent judgment is a promise or consent bilater- and that judgment as a verdict effect parties adjust al wherein the contract R against B & for the consent consent, by their difference mutual there- $618,000 action sub in the Warbelow putting an each end to lawsuit with ject by the amounts to reduction balancing hope gain against party and Deco- negotiated by Sears settlements fear of loss. [Citations omitted.] re argues ra. It that such reduction Among R-5, quired by Joint Inc., the Contribution Parkerson v. 595 So.2d Act, 09.16.010 particularly AS Comment, Tortfeasors generally See (La.App.1974). and 09.16.040.23 Judgments, Consent Harv.L.Rev. (1959). the statute does not We conclude been the result of a
require amount awarded If a reduction Although judicial of the merits of the judgment. determination under the consent case, subject it have to reduc- might Warbelow and & R been settlement reached 09.16.040(1);25 or, inwas es- tion under under AS judgment, was entered as a AS *14 tal, guidance given it Release not sue. a as to how or covenant to When release covenant not sue or not to of costs and at- or should determine amount against judgment given good torney’s might B enforce is in faith to fees be awarded verdict, persons litigation, in for one of two or more liable tort the Warbelow and its & R in injury wrongful therefore, partly upon or the same death the same must have been based (1) discharge any it impermissible speculation. does not the other injury Our review of the liability or tortfeasors from wrongful to convince us that the court entire record fails provide; unless its terms so regard. death this erred in it but reduces claim others any stipulated by the amount the extent release or the the consideration pertinent part: provides in 23.AS 09.16.010 covenant, or in amount contribution, (a) Except Right as other- it, paid for whichever is chapter, provided or in where two wise greater: and severally persons jointly lia- become or more ble in tort for the same (2) discharges it it the tortfeasor to whom injury person or liability given all for contribution to is from death, wrongful property for the same or any other tortfeasor. among right them is a of contribution there judgment though has been recov- even not judgment has characterized the 24. Continental any of ered all or them. judgment” a rather than as a “confession only (b) in The of contribution exists judgment.” it more “consent We believe is paid more of a who has than favor tortfeasor judgment.” properly a “consent considered liability, pro rata share of the common his by judgment distinguished consent is A recovery is limited and amount total confession, judgment by in a that its from pro paid by him excess of his rata in special be- is the settlement characteristic compelled to make No tortfeasor is share. contribution terms, amount, parties or of the tween the conditions the first parties beyond pro his own rata share rendered; judgment of the to be liability. of the entire presupposes agreement of the it, act a basis and the latter an (d) enters into settle- A tortfeasor who They differ in that of defendant alone. also to recov- with a claimant is entitled ment er contribution from another a certain amount of su- the court exercises tortfeasor entry judgments by pervision confession, over the liability injury wrongful for the whose jurisdiction equitable over extinguished by is the settlement death nor subsequent status. their paid respect any in amount in settle- (1947) (foot- Judgments at 269 § 49 C.J.S. was reasona- ment which is excess what omitted). *15 wrongful death AFFIRMED. (1) discharge any the it not of does liability the
other tortfeasors from wrongful death unless its terms MATTHEWS, J., injury or participating. not neys supra. the Quoted constituted evidence on the state of 26. in note 23 Fourth, improperly was admitted. law that fact, closing argument behalf of in 27. In objects superior to the court Continental Continental, Hagans argued attorney that the judge’s jury the to disre- failure to admonish $618,000 pre- was unreasonable settlement cisely $458,000 allegedly improper argument gard to which already had received because Warbelow Fifth, objection. judge the had sustained jury, The from Sears and Decora. superior challenges court’s fail- the Continental ure to therefore, deciding was that the settlement jury give the written instructions reasonable, presumably the amount of the took Responsibility. have Professional Code of prior settlements into consideration. arguments con- of these considered each alleged they five additional merit. has clude that are without First, grounds it contends for reversal. cross-appeal that the In a B & R has superior error court committed reversible the gave superior instructions on erroneous admitting in issued Continental to nental the damages, into evidence the insurance good the faith and the issue of Continental’s Second, by B & R. Conti- punitive damages Because we affirm award of objects trial court’s instruction the superior'court judgment B the in favor of the of jury $4000 B R it should award & R, unnecessary the for us to consider & it is if it found that Continental cross-appeal, R since B & issue raised in the Third, B R. to defend & breached Continental flicts of interest only judgment urges if the is re- us to do so monograph on con- contends that a versed. and the in insurance cases testimony who were attor- of several witnesses fendants, and that amount due from B & R' the claim provide; but it reduces so by the any should be reduced the amount of the against others to extent the settlements. Sears and Decora by the the stipulated release amount covenant, the consid- or in the amount of nominally by brought suit B & R the it, is the paid for whichever eration Continental, the found jury Conti- greater; and negligence theory. The nental liable on a
(2) discharges to whom B R jury the tortfeasor had been instructed that & it $618,000.00 damages resulting contribu- as liability is from all claimed given it jury not negligence. tortfeasor. from that was tion to other prior as settlements and instructed section, the amount of According judgment the amount of the B & R against B & R was to be judgment subject by was to reduction sum amounts-stipulated reduced $458,125.00. party Warbelow was real release and Decora. of Sears Continental, suit interest contest Continental’s as- B & R does not failing to and the trial court erred in reduce judgment subject a confessed sertion that required by the Contribu- as Instead, it the statute. to reduction under (AS Act 09.- Among tion Tortfeasors Joint negotiated characterizes 09.16.040)by amounts War- 16.010and normally settlement, be which would not was to receive under the other settle- below subject by the amount to reduction results in a dou- ments. To hold otherwise in the same ac- other settlements achieved recovery. ble points to fact that the tion. B & R recovery prohibiting double The doctrine attorneys rep- negotiated by the figure was received supports payment the rule that a and states that there resenting parties, for a not to sue plaintiff covenant why judgment was reason special potentially in tort must someone liable However, “settlement” was re- needed. damages recoverable from the deducted figures indicate judgment, and duced to whose liabilities arise persons from tort of B R and Warbe- that was the intent out of the same circumstances. $618,000.00as low treat amount Rogers Babler Luth v. Construction liability of all three defendants. the total Lath, (Alaska 1973). In 507 P.2d had made an offer settle- Warbelow injured acci- plaintiffs, in an automobile January ment B & R on dent, a covenant to sue entered into $160,000.00,apparently based on amount of pay- potential defendant consideration the limits of the belief that this covered $3,500.00. -later Judgment ment under its insur- Continental’s against Rogers & Babler in obtained ing ($100,000.00plus costs and attor- & R $7,000.00. amount ney’s fees). It seems obvious prior as to the confession instructed *16 judgment was to of the confessed amount to the situation here judgment, similar plus the amount of two cover this sum as to the where the instructed settlements, to the nearest prior rounded the trial prior settlements. held dollars. thousand proper procedure in re- employed damages by the ducing the awarded Judgment $618,000 Confessed Id. prior amount of the settlement. Total of Sears and Decora I it was error not Similarly, believe that ($350,000 Settlements - $108,125) 458,125 of B R’s to reduce the amount $159,875 and Decora the amount of Sears settlements. is re- when confessed settlements, duced the two B R amounts to almost the identical
of & last settlement offer.
sum as Warbelow’s $618,000.00 represented the value
the Warbelow claim all three de- notes See Crisci commensurate Here, course, jury: R “A or consent of B & was reasonable settlement agreement judgment is which under the circumstances with Warbe- one based on a settlement existing merits. at the time that was entered into than a An low rather automatically ordinary prudence company or reasonable and liable made as is insurance might caution dictate be advisable.” full such settlement amount required negotiated by regardless whether the determine insured of the settlement was reasonable under trial amount amount or reasonableness thereof. circumstances, apparently recognized properly which it did. instructed supra at 181-82 Gantz and Continental believed that his Appleman, J. at § 7C omitted, added). Continental, (footnote emphasis first was to loyalty litigation throughout the course of the he also contends that an Continental acted and on the insurance behalf of may not be liable held example, company. For' on December negligence policy limits for the over superi- advised Stanford of the Gantz Gantz, arguing attorney such as that one imposing or court’s order sanctions. In a independent is contractor. position his he letter stated: to Stanford testimony that was Much of introduced negligence of Conti at trial establish It the action is our taken actually related to conduct nental Judge sufficiently is serious Gantz, attorney retained Continental legality sufficient as to the there is doubt represent B & R.21 we action that should file a Petition Supreme to the Court ask adopt Review urges us to the rule petition stay held of the trial until that vicariously an insurer cannot be
Notes
notes ble. AS 09.16.040 Quoted supra. provides: in note BOOCHEVER, Justice, dissenting might have Chief 09.16.010,26 judgment such' a part. from Sears B R to contribution entitled & case, is not the however. and Decora. Such majority opinion except agree I with the entéred, judgment was Although a consent judg- of the the that I believe the amount liability resulted from settlement B & R’s the amounts by ment should be reduced adjudication. agreement, not from paid as a result of settlements previously negotiated settlement was amount of the Decora. B & R entered a with Sears the settlement parties, $618,000.00 judgment for on Jan- confessed that had by jury uary found to be reasonable 1973. At that time Warbelow had negotiated and Decora previously of the Sears settlements before evidence settlements,27 $350,000.00 and with Decora Warbelow and B Sears Since both $108,125.00. of the fully & R were aware Sears they agreed when Decora settlements 09.16.010(d)specifies: AS $618,000, it must be the case for settle A tortfeasor who enters into a settle- they, jury, like the took those assumed that is not entitled to ment with a claimant into consideration prior settlements tort- recover contribution from another $618,000amount. Neither agreeing on the injury or whose for the feasor 09.16.040)nor (AS and AS the law 09.16.010 extinguished by the wrongful death is not requires that one settlement common sense respect amount settlement nor prior amount of a settle- be reduced paid which is in excess of in a settlement proper- superior court therefore ment. what was reasonable. reduc- motion for a ly denied Continental’s recover and Decora could not Sears judgment. tion of the contributions from & R. VII. Conclusion provides: AS 09.16.040 not to sue. When Release or covenant allega Having considered all covenant not to sue or not a release or Continental,28 we urged by tions of error givén good faith enforce there was no error. conclude that persons liable in to one of two or more supe therefore affirm injury or the same tort for the same rior court.