Edgerson v. Cleveland Electric Illuminating Co. ( 1985 )

Where a party or his representative concedes that there was some liability ("although minimal"), that party has a duty to make an offer to settle within that range. Failure to do so constitutes a breach of good faith which warrants the application of R.C. 1343.03(C).

In this case, Adalet's insurance company, through its agent, conceded partial liability for the injuries sustained by Edgerson and stated that it would have offered between $10,000 and $12,000 (with a reserve of $15,000 to $25,000) had it believed that the $250,000 demand by Edgerson was negotiable.

Where, as here, the plaintiff reduced his demand from $1,000,000 to $350,000 and then to $250,000, but refused to lower it further in the absence of any offer from the defendant, the court was justified in concluding that the demand was negotiable.

A party cannot insulate himself from prejudgment interest by arbitrarily concluding that his adversary's demand is unrealistically high and, therefore, unworthy of any offer of settlement any more than a claimant can decide that his adversary's offer is so unrealistically low that he should not make a demand. Since Adalet conceded that it had some liability, its failure to make an offer amounted to a lack of good faith. Hence, the award here of prejudgment interest was proper.

CEI's denial of liability was based largely on the fact that Edgerson testified in his deposition that he thought the electrical shock he received came from a small electrical box located on the tower. The box was neither owned by nor supplied with energy from CEI. In addition, CEI relied on Edgerson's pretrial testimony that he was lying in a prone position while painting and was "quite a distance" (eight feet) from CEI's wires. The testimony, when combined with the opinion of Edgerson's own expert witness who admitted that it was physically impossible for electricity to arc eight feet³ (the distance between plaintiff and the wire), supports CEI's position that it need not have made an offer. A party is not required to make an offer of settlement pursuant to R.C. 1343.03(C) if in good faith it believes it is not liable.

As to the issue of the retroactivity of R.C. 1343.03(C), I agree that it is remedial in nature. The prejudgment interest statute is similar in principle to the application of the comparative negligence statute which the Ohio Supreme Court held may be applied retroactively. See Wilfong v. Batdorf (1983),6 Ohio St.3d 100, 104.

³ Based on the voltage, the spark of electricity would arc only one-half inch between two conductors.