Detenber Et Al., Administratrices v. American Universal Insurance Co.

1967-12-04

Headline: Family's bad-faith claim against an insurer is denied Supreme Court review, leaving lower courts’ summary judgment in place and blocking a jury trial for the plaintiffs.

Holding: The Court refused to hear the family's challenge, leaving the lower courts' summary judgment against them intact and denying them a jury trial on their bad-faith claim against the insurer.

Real World Impact:

Leaves summary judgment in place, barring a jury trial on the bad-faith claim.
Allows insurer's victory to stand, avoiding a new trial for now.
Highlights possible conflict between insureds' interests and insurer litigation strategy.

Topics: insurance bad faith, jury trial rights, summary judgment, wrongful-death

Summary

Background

The dispute began after two children in a car died in a collision with a bus. The car was driven by Clark, who had liability insurance from American Universal. The insurer defended Clark in the wrongful-death suit brought by the children's representatives. Clark later claimed that the insurer’s lawyer had acted in bad faith during that defense and assigned his own claim against the insurer to the family, producing a separate lawsuit under Kentucky law.

Reasoning

The Supreme Court declined to hear the appeal, so the lower courts’ summary judgment for the insurer stands. The courts below had concluded there was no factual question for a jury. Justice Black dissented and described conduct that he said created a question for jurors: the insurance lawyer changed defenses at trial without telling Clark, filed an amended answer blaming the deceased children, allowed Clark’s guilty plea into evidence, and urged the jury to disbelieve Clark. The dissent also emphasized that the insurer had a $10,000 policy limit, which gave the company a motive to use a strategy that could shift larger damages onto Clark. Under Kentucky law cited by the dissent, bad faith implies conscious wrongdoing, and he argued a jury could reasonably find such conduct.

Real world impact

Because the Court refused review, the family’s chance to have a jury decide the bad-faith claim is blocked for now and the summary judgment against them remains in effect. This decision is a denial of review rather than a ruling on the merits by the Supreme Court, so the underlying legal dispute could be revisited in other proceedings.

Dissents or concurrances

Justice Black would have granted review and reversed the lower rulings, saying the record presented enough evidence of conscious wrongdoing by the insurer’s lawyer to require a trial before twelve ordinary citizens under the right to jury trial.