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TRUCK INS. EXCHANGE v. BISHARA5/17/1996
This is a declaratory judgment action in which Truck Insurance Exchange (Truck) seeks a judicial declaration that it did not act in bad faith in refusing to enter into a settlement agreement with an injured third party.
I.
BACKGROUND
The Dotys purchased an automobile from the Bisharas in 1985 upon which new tires had been installed by Elias Bishara approximately one year earlier. Shortly after purchasing the vehicle, two of the tires on the automobile failed while the dotys were traveling through Arizona, causing the vehicle to roll over. The accident resulted in the death of Richard Doty as well as permanent and severe brain damage to John Doty and varying injuries to the remaining family members in the car.
The Dotys filed suit naming the Bisharas, Kelly Springfield, and various other parties as defendants. The primary basis for Dotys' claim against the Bisharas was negligent installation of the tires while the claims against Kelly Springfield and the other entities engaged in the design, manufacture and sale of the tires were based upon product liability theories.
The Bisharas were insured by Truck with a personal injury liability maximum in the policy of $300,000 per occurrence. A settlement demand for the policy limits was made by the Dotys on September 25, 1987, and extensive negotiations between the Dotys and Truck ensued. Settlement was never
concluded primarily due to a clause inserted in the Doty's final proposed settlement agreement to Truck that allowed the Dotys to collect on a judgment against any other tortfeasor for an amount that might ultimately be deemed to be Bisharas' share of fault.
The case was bifurcated for trial with liability issues tried before a jury. The jury found the Bisharas 100% at fault for the accident and damages were set at $4,000,000 by stipulation. Thereafter, the Dotys obtained an assignment of the Bisharas' bad faith claim against Truck in exchange for the Dotys' covenant not to execute upon the judgment.
On appeal, in Doty v. Bishara, 123 Idaho 329, 848 P.2d 387 (1992), we ordered reversal of the district court's judgment and remanded the case for a new trial. Truck then filed an action for a declaratory judgment claiming that the insurer was not guilty of negligence or bad faith in failing to settle Dotys' claims against the Bisharas for the policy limits. Both parties filed motions for summary judgment and the district court granted Truck's motion holding that the insurer's refusal to settle did not give rise to a cause of action for bad faith because Truck was never given the opportunity to fully settle the insured's liability within the limits of its policy.
II.
STANDARD OF REVIEW
A motion for summary judgment must be granted by a district court "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). A review by this Court of a district court's ruling on a motion for summary judgment is the same as that required of the district court when it rules on the motion. Curtis v. Firth, 123 Idaho 598, 610, 850 P.2d 749, 761 (1993).
The parties to this action both filed motions for summary judgment before the district court. The court granted Truck's motion and denied the cross motion by the Dotys. The Dotys argue here that the trial court erred in granting summary judgment in favor of Truck. In evaluating this appeal the Court should liberally construe the record in a light most favorable to the Dotys, drawing all reason
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