Opinion
Upon respondent's petition for rehearing filed October 14, 1975,
Former opinion filed September 25, 1975, 273 Or. 600, 540 P.2d 364, Rehearing denied November 20, 1975.
C.S. Emmons, of Emmons, Kyle, Kropp Kryger, Albany, and McMinimee and Kaufman, Tillamook, for the petitioner.
No appearance contra.
REHEARING DENIED.
McAllister and Tongue, JJ., did not participate in this decision.
Plaintiff has filed a vigorous petition for rehearing. Running through the petition is the contention that the award by the jury of $50,000 in the original case of plaintiff against Byrd, the insured, forecloses consideration of the apparently reasonable settlement value of that case in determining whether there was sufficient evidence of the insurer's bad faith in the present case to go to the jury. It is this court's opinion that it is not possible to determine intelligently the issue of the insurer's bad faith without consideration of evidence bearing upon the apparent value in settlement of plaintiff's original case against the insured prior to verdict. In the present instance the evidence shows that with full knowledge of all relevant facts as they were subsequently disclosed at trial, everyone, including plaintiff's experienced lawyer, evaluated the case at much less than the policy limits.
The petitioner chides the court for deciding the issue on the basis of good faith with no consideration of due care. A careful reading of the leading case in Oregon, Radcliffe v. Franklin Nat'l Ins. Co., 208 Or. 1, 298 P.2d 1002 (1956), leaves one somewhat in doubt although it appears to have adopted the criterion of good faith (as that term is used in this kind of case) in deciding whether to negotiate and/or settle. In Kuzmanich v. United Fire and Casualty, 242 Or. 529, 532, 410 P.2d 812 (1966), we said that "only a decision made by an insurer who exercises due diligence in apprising itself of the material facts is entitled to be considered as made in good faith," citing Radcliffe. There is no contention in this case that defendant did not fully inform itself of the relevant facts. To the contrary, the complaint takes great care in alleging that defendant was in possession of all relevant information and, therefore, should have offered to settle. Most authorities agree there is little difference between the concepts of "good faith" and "due care" where the duty of the insurer, as we stated in our original opinion, is to "act as if there were no policy limits applicable to the claim and as if the risk of loss was entirely its own." See R. Keeton, Liability Insurance and Responsibility for Settlement, 67 Harv L Rev 1136, 1146-148 (1954).
Plaintiff is particularly concerned about the negligence aspect of the case because, as he points out, there is evidence that defendant neither made an offer nor informed Byrd of plaintiff's offer to settle for the policy limits, and contends that these are acts of negligence which necessitate a jury determination. However, as we held in the original opinion and reaffirm here, the court looks at the composite whole of all facts in deciding whether there is sufficient evidence to go to a jury. A plaintiff does not automatically get to a jury by showing there is present the kind of evidence which in some other case was considered probative of negligence or bad faith.
There is often language used in an opinion which, in retrospect, the writer wishes he had not used. Such is the case concerning the language which the writer used in the original opinion wherein he said that the evidence of plaintiff's experts to the effect that the defendant's conduct constituted bad faith "carries no more weight than does testimony in a negligence case that certain acts constituted negligence." That language was not very informative. As plaintiff's attorney points out in his petition, in many negligence situations experts give testimony as to the level of conduct which is considered appropriate in certain circumstances with which the average individual cannot be expected to be familiar. Assuming that the ethics of insurance defense are sufficiently esoteric that the members of the court, or of the jury, may be helped by the opinions of experts on these matters, this court is not bound to follow blindly their testimony in deciding whether certain conduct can be found to be sufficiently outside of appropriate norms that it should be submitted to the jury. If it were otherwise, expert witnesses and not this court would decide what constitutes a prima facie case of bad faith.
The petition for rehearing is denied.