Levin v. New England Casualty Co.

Philbin, J.

The plaintiff sued to recover the sum of $750, which he contributed to the settlement of a claim against him and which he asserts should have been wholly paid by defendant under its policy. The defendant offered no proof on the trial and the court directed a verdict in favor of the plaintiff.

The plaintiff was insured by the defendant against accidents occurring in relation to the operation of plaintiff’s automobile. During the life of the policy, a person 'was injured through the operation of the automobile and later brought suit against this plaintiff for $10,000, which was subsequently increased to $25,000. The defendant’s liability to this plaintiff was limited to $5,000 under the terms of the policy. The defendant began negotiations for the settlement of said suit, which dragged along till the eve of trial, when the plaintiff, being informed of the negotiations, consulted his own attorneys at the suggestion of the attorneys for the defendant. The claimant finally agreed to accept $3,150 in full settlement of his claim. The defendant refused to pay more than $2,400 and took the position that if plaintiff wanted to so dispose of the case against him he would have to pay the balance necessary to make up the $3,150.

The plaintiff paid such balance and now demands reimbursement from the defendant on the ground that the latter had agreed under its policy to pay any loss that plaintiff might sustain not exceeding $5,000. He also claims, in substance, that he was coerced into paying the $750 because of defendant’s refusal and the belief that if the accident case went to trial a recovery would be had for a substantial sum exceeding the amount for which the defendant agreed to indemnify him. There is no question that the defendant was prepared to defend the suit and to fulfill the obligations of its policy, except in so far as plaintiff claims its refusal to pay a larger sum in settlement was a violation of its duty. The defendant was under no duty to settle the claim. The policy gave it the option of contesting it, if it saw fit to do so. It had the right to await the decision of the court as to the claimant’s demand, or to pay such sum in settlement as it saw fit. The plaintiff apparently believed that it was to his interest to settle rather than face the uncertainty of a trial and a possible verdict against him, part of which he might have to pay. I think the defendant was acting strictly within its rights and in observance of the contract of insurance and that the plaintiff failed to make out a case of coercion or violation of the policy. Judgment reversed, with costs, and complaint dismissed, with costs.