APPEAL FROM THE CIRCUIT COURT OF DOUGLAS COUNTY. Honorable Al F. Turner, Judge
Respondent's Motion for Rehearing Overruled. Motion for Transfer Denied September 9, 1993.
The opinion of the court was delivered by: Parrish
State Farm Fire & Casualty Company (State Farm) appeals from a summary judgment that included an award of damages in favor of Eugene C. Metcalf and William E. Metcalf (claimants). The trial court declared that State Farm had issued a policy of automobile insurance that applied to an automobile accident in which Sharon K. Metcalf was killed and that the limits of liability provided by that policy were $25,000 per person, including death, and $50,000 per occurrence. The trial court further found for State Farm on two counts of a counterclaim brought by claimants (Counts I and II) and for claimants on a third count of the counterclaim (Count III). The trial court awarded damages in Count III in the amount of $975,000 "because of State Farm's bad faith refusal to defend and settle . . . wrongful death claims against State Farm's insured." This court affirms in part, reverses in part and remands.
Lance Lee Metcalf and Sharon K. Metcalf, claimants' parents, were killed in an automobile accident on May 30, 1990. The automobile in which they were riding, and which was operated by Mr. Metcalf, left a roadway, went down a steep embankment, and came to rest approximately 75 feet away from the roadway. Mr. Metcalf was the named insured in two policies of automobile insurance issued by State Farm.
The following chronology relates to legal proceedings that occurred after the automobile accident:
August 17, 1990 State Farm filed a petition to
require administration for the
Estate of Lance Lee Metcalf in
declaratory judgment could be
brought to determine validity
of the household exclusion part
of State Farm's automobile
liability insurance policy.
Thomas Cline was appointed
personal representative for the
Estate of Lance Lee Metcalf.
September 12, 1990 State Farm filed an action
seeking declaratory judgment
regarding automobile insurance
policies that named Lance Lee
October 11, 1990 Claimants filed a wrongful death
action against the Estate of
Lance Lee Metcalf seeking
damages for the death of Sharon
October 15, 1990 Thomas Cline, Personal
Representative of the Estate of
Lance Lee Metcalf, sent a letter
to State Farm notifying State
representative had been served
with summons and petition in
the wrongful death action. The
personal representative's letter
tendered defense of the suit to
State Farm. It also advised
State Farm, "The estate will not
accept any reservation of
rights, and demands that the
company immediately honor its
contractual obligations . . .
afford coverage for the claims
being asserted, and afford the
defense required by the policy."
November 5, 1990 State Farm ...