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Badillo v. Mid Century Insurance Co.6/21/2005
record contains sufficient evidence to support a rational finding it was the unreasonable acts and/or omissions of insurers in breach of their duty of good faith and fair dealing toward insured that caused a lost opportunity to settle the matter within the $10,000.00 policy limits. This is so, even though Smith did not testify at the trial of this matter.
In effect, one or more of the attorneys for Smith testified they would have recommended settlement within the policy limits had a statement been given and they were convinced insured had no other assets, or limited assets (other than the insurance policy), to satisfy the large claim existent, and no other insurance or tortfeasor was available. To us, the jury was allowed to consider this testimony, reasonable inferences from other evidence submitted at trial and to use common sense to reach a reasoned decision that it was more probable than not the matter would have settled for the $10,000.00 policy limits were it not for unreasonable acts and/or omissions of insurers in violation of the duty of good faith and fair dealing.
It has also been recognized the basic purpose of the rule that a contract (a settlement agreement is one type of contract) may be avoided by virtue of the incapacity of one of the makers thereof is for protection of the incompetent. Davidson v. National Aid Life Ass'n, 1935 OK 922, 50 P.2d 173, 175. It is also quite plain that a client may later ratify a settlement agreement reached by his/her attorney under appropriate circumstances. Yahola Sand & Gravel Co. v. Marx, 1960 OK 206, 358 P.2d 366. Any settlement reached by Young on Smith's behalf by virtue of the former's authorization under the power of attorney, could further have been made subject to court approval had insurers been concerned about the capacity of Smith during the relevant time period. Very simply, in our view, the absence of testimony from Smith did not mandate a directed verdict in favor of insurers because of a lack of proof on the causation element. Thus, the question of whether insurers caused a lost opportunity to settle Smith's claim within the $10,000.00 policy limits was an issue properly left for the jury to decide.
In sum, sufficient evidence was presented from which the jury could properly conclude insurers engaged in unreasonable conduct, breached the duty of good faith and fair dealing owed to insured and directly/proximately caused insured recoverable damages. The trial court did not err in submitting insured's claim against insurers for actual damages to the jury.
PART IV. EXCLUSION OF EVIDENCE CONCERNING SMITH'S CAPACITY DOES NOT WARRANT REVERSAL OR REQUIRE A NEW TRIAL
Insurers claim entitlement to a new trial due to the trial court's exclusion of evidence concerning Smith's capacity during the period of time the Young-hired lawyers were dealing with insurers prior to filing a lawsuit against insured. As generally alluded to in PART III above, at least part of insurers' defense to insured's suit was the assertion no opportunity to settle the Smith claim was actually lost, as Smith was incapacitated during the relevant time period and that she could, thus, not have validly executed a power of attorney to Young or have agreed to settle the case herself during such time period, and it was, therefore, not any act or omission on their part that proximately caused any failure to so settle. Tied to the incapacity argument is insurers' position that the attorneys hired by Young had no authority to act on Smith's behalf, one or more of said lawyers engaged in a set-up of insurers and the lawyer(s) really never had any intention of attempting to settle the case for policy limits. Insurers also argue
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