Shamblin v. Nationwide Mutual Insurance ( 1990 )

NEELY, Chief Justice,

concurring:

I agree with the final result in this case, but I believe that the majority takes us on a long trip that is unnecessary. Can you honestly imagine a situation where an insurance company fails to settle within the policy limits, the policyholder gets stuck with an excess judgment, and this court does not require the insurance company to indemnify the policyholder? That will happen the same day the sun rises in the West! As far as I am concerned, even if the insurance company is run by angels, archangels, cherubim and seraphim, and the entire heavenly host sing of due diligence and reasonable care, I will never, under any circumstances, vote that a policyholder instead of an insurer pays the excess judgment when it was possible to settle a case within the coverage limits.

When I buy insurance, I buy protection from untoward events. I do not object to an insurance company’s vigorous defense of a claim, including going to jury trial and exhausting every appeal. Furthermore, as a policyholder, I will diligently assist my insurer to vindicate its rights and protect its reserves. However, I draw the line when the insurer decides that in the process of protecting its reserves, it will play “you bet my house.” The insurance company can bet as much of its own money as it wants, and it can bet its own money at any odds that it wants, but it cannot bet one single penny of my money even when the odds are ten million to one in its favor!

Thus, I would replace syllabus points 2, 3, and 4 of the majority opinion with the following simple syllabus point:

Wherever there is a failure on the part of an insurer to settle within policy limits where there exists the opportunity to settle and where such settlement within policy limits would release the insured from any and all personal liability, the insurer is then liable to the policyholder for any damages recovered against the policyholder that are in excess of the policy limits.

This concise syllabus, I believe, creates a clear, bright line rule that even the dimmest lawyer, adjuster, insurance executive or judge can understand. The rule is simple, uncomplicated, eminently just, and serves the desirable jurisprudential policy of effecting the equal operation of legal precepts because it does not allow one millimeter of room for judge, jury or appellate discretion. Furthermore, and much more to the point, this incisive syllabus would severely discourage the running of meters, the building of files, and the needless oppression of the weak and the helpless to which both running meters and big files ultimately lead.