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Griffin v. Westfall7/5/2005
o indication that the trial court excluded them. We, therefore, treat the decision as we do an order on summary judgment and review the decision de novo.
An agent is solvent only if he is able to fully compensate the injured plaintiff. Because policy considerations favor full compensation for accident victims, a plaintiff may release an insolvent agent and proceed against the principal on a respondeat superior theory. Griffin contends that the trial court erred in finding Westfall solvent and therefore concluding that the settlement agreement, by operation of law, also released Cloverdale.
Though Griffin urges us to review the trial court's factual findings regarding Westfall's solvency de novo, appellate courts will not reverse a trial court's factual findings regarding the reasonableness of a settlement if they are supported by substantial evidence. Conclusions regarding the legal effects of those facts are reviewed de novo.
In December 2003, Griffin, who claimed damages of $1.2 million, reached a settlement agreement with the Westfalls for $100,000, the limit of their personal automobile liability insurance policy. They had no other personal assets for purposes of the question before us. However, Cloverdale maintained a commercial automobile policy with The Hartford, for vehicles used in Cloverdale's business. The policy limit was $1 million. Prior to settlement, Griffin had propounded discovery to Cloverdale which included this request for admission: 'Admit that Cloverdale Paint holds the insurance policy for their employee, John Westfall, on the truck involved in this accident on July 23, 2002.' Cloverdale's July 2003 response was: 'Deny. Cloverdale Paint has tendered this matter to its insurer. As of this date, the insurer has not yet made a coverage determination.'
Griffin contends that, prior to the discovery cut-off date and subsequent settlement, 'Cloverdale Paint never disclosed any documents, discussions, or correspondence that contradicted Cloverdale Paint's original denial.'
Therefore, he argues that Cloverdale's denial of coverage remained in effect at the time of settlement, making the secondary policy unavailable to Westfall for the analysis of solvency.
This argument is based on too narrow a reading of the discovery response. The response is not limited to denying that coverage exists. Rather, a fair reading of the response was that the matter of coverage had not yet been resolved at the time of the response, albeit it is unclear from the record before us why coverage was in dispute. After the response, but three months before the settlement, Cloverdale provided Griffin with a copy of its insurance policy. It states that the policy covers, among others '{a}ny 'employee' of {Cloverdale} while using a covered 'auto' you don't own, hire or borrow in your business or your personal affairs.' Thus, Griffin was on notice prior to the release of the Westfalls that under the terms of the policy, Cloverdale employees are covered for actions taken while operating their personal automobiles in the course and scope of their employment. There is no dispute that, at the time of the accident, Westfall was operating in the course and scope of his employment with Cloverdale.
We are aware that several months after Griffin released Westfall, Cloverdale supplemented its earlier response to the request for admission: Cloverdale admits that it holds an insurance policy with The Hartford that is a secondary policy applicable to actions taken by Cloverdale's employees within the course and scope of their employment. Because Cloverdale employee John Westfall was acting in the course and scope of his employment at the time of the accide
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