Finkelstein v. 20th Century Insurance

Opinion

BOREN, J.

Appellant, Ronald Finkelstein, appeals following a summary judgment in favor of respondent, 20th Century Insurance

[928]

Company.

1

Appellant alleged causes of action for breach of the implied covenant of good faith and fair dealing regarding insurance coverage and for duress. Appellant premised his causes of action on the respondent’s refusal to settle an automobile insurance claim within the insurance policy’s limits, where appellant deemed himself subject to a substantial probability of a judgment in excess of the policy limits. No excess judgment was ever entered against appellant, who had voluntarily contributed $6,700 above the $75,000 provided by respondent to settle the suit against appellant for an amount below the policy’s limits. We find that an insured cannot maintain an action for bad faith exposure to an excess verdict in the absence of such a verdict, and that appellant was not under improper duress from respondent to contribute his own funds toward the settlement.

Facts

The case arose from an automobile accident on May 5, 1985, which resulted in appellant’s felony conviction for driving under the influence of alcohol. The injured parties sued appellant, who was insured by respondent and had a maximum insurance policy coverage of $100,000 per injured party. The claim by one of the injured parties, Mark Eberle, settled for $45,000. The claim by the other injured party, Norma Eberle, did not initially settle, and the parties prepared for trial. At the final mandatory settlement conference, Norma Eberle initially demanded $95,000 to settle the case. That demand was lowered to $85,000. Respondent offered $75,000, but Norma Eberle refused to settle for that figure. Ultimately, the case settled at the mandatory settlement conference for $85,000, broken down as follows: $75,000 from respondent, $3,300 as a credit for restitution payments already made by respondent on appellant’s behalf (as required pursuant to criminal proceedings against the insured), and $6,700 from the personal funds of appellant.

During a deposition in the present case, appellant explained his reason for agreeing to the settlement. Appellant stated as follows: “I felt that the case should be settled, the victims were victims. I already plead[ed] guilty. It was actually playing on a little bit of my Alcoholics Anonymous Program. . . . I’m a member of Alcoholics Anonymous. When amends have to be made, we make them as quickly as possible, removing the wreckage of our past.” As