Beck v. Famers Insurance Exchange

Facts

Beck, Plaintiff, insured by Defendant, Famers Insurance Exchange, in which the policy provided that Plaintiff would be reimbursed for medical expenses and uninsured motorist benefits if Plaintiff was involved in an accident with an uninsured motorist. On January 16, 1982, Plaintiff was injured in a hit-and-run accident in which the owner of the vehicle that hit Plaintiff and left said the car was stolen, thus denying knowledge of the incident. The hit and run vehicle’s owner’s insurance company denied Plaintiff’s claim, causing Plaintiff to file a claim with Defendant for medical expenses and uninsured motorist benefits. Defendant granted Beck’s claim for medical expenses, nevertheless, Defendant denied Plaintiff’s claim for uninsured motorist benefits. On June 23, 1982, Plaintiff offered to settle the uninsured motorist benefits claim with Defendant for $20,000, which was the policy limit. Plaintiff asserted that the claim was worth significantly more than $20,000, but Defendant rejected Plaintiff’s offer without explanation. Thereafter, Plaintiff filed suit asserting breach of contract, bad faith in refusing to investigate or settle Plaintiff’s uninsured motorist claim, and intentional infliction of emotional distress against Defendant. During trial, Defendant offered to settle Plaintiff’s claim for uninsured motorist for $15,000, which Plaintiff accepted, due to alleged financial pressures resulting from the significant expenses incurred during the ten months after his accident. Plaintiff submitted an affidavit of a former insurance adjuster stating, which stated a prudent insurance company would have valued Defendant’s claim at $40,000. Likewise, Plaintiff contends that Defendant’s delay in settling the claim is evidence of Defendant’s bad faith. Defendant does not introduce any evidence to rebut this assertion in the affidavit. The trial court held for Defendant, and Plaintiff appealed.