Even though the jury found that the defendant-insurer had been negligent, the jury also found that the insurer had not breached its duty of good faith and fair dealing. South Carolina does not recognize a cause of action for negligence that is separate from a cause of action for bad faith against an insurer.
We affirm the trial court’s grant of the insurer’s motion for judgment notwithstanding the verdict.
As we read Nichols v. State Farm Mut. Auto. Ins. Co., 279 S.C. 336, 306 S.E.2d 616 (1983), it recognizes a single tort encompassing bad faith and negligence, not separately viable claims for bad faith and negligence. The claim in these cases is that the insurance company has breached the covenant of good faith and fair dealing that is implied in every insurance contract. Indeed, precedent explains an insurance company commits “bad faith” when (among other elements) there is bad faith or unreasonable action in breach of an implied covenant of good faith and fair dealing arising on the contract.
To be sure, it is appropriate for a jury to consider an insurance company’s negligence when deciding whether the insurer breached its duty of good faith and fair dealing and thereby acted in bad faith. In this context, there is no tort against an insurance company for negligence that does not also cross the threshold of breaching the duty of good faith and fair dealing arising out of the insurance contract.
The underlying litigation arose from a three-car accident. Antoine Johnson t-boned plaintiff’s car, pushing her into the path of William and Mary Kuck’s car. Plaintiff’s insurer provided her a defense when the Kucks sued her, and the insurer defended in Johnson’s name when plaintiff sought underinsured motorist (UIM) coverage.
In defending the Kucks’ claims, the attorney hired by the insurer argued and presented expert testimony that plaintiff’s headlights were illuminated at the time of the accident; however, in defending plaintiff’s UIM claim, the insurer argued and relied on evidence that plaintiff’s headlights were off at the time of the accident.
Plaintiff argues the insurer acted in bad faith or unreasonably by taking disparate positions about her headlights in different cases. We respectfully disagree.
The UIM statute entitled the insurer to defend the UIM case “for its own benefit.” S.C. Code Ann. § 38-77-160. The insurer did precisely that.
It bears mentioning that the insurer did not take disparate positions. The insurer was not a party to the cases the Kucks brought against plaintiff. The insurer obtained counsel to represent plaintiff. In the UIM case, the insurer stepped into Johnson’s shoes, defended its own interest as allowed by statute, and justifiably relied on several pieces of evidence suggesting plaintiff’s lights had not been on. There was a reasonable ground for the insurer to assert in the UIM suit that plaintiff’s headlights were off. Thus, the insurer did not act in bad faith in taking that position.
Finally, we are not aware of any authority supporting the proposition that an insurance company acts in bad faith by not offering to settle the case for the full amount of its authority or reserve. We reject the suggestion that the insurer’s internal valuation of the case constitutes an “undisputed” sum owed to plaintiff. It may be that the insurer had a duty to answer truthfully if asked whether it was offering the maximum amount of its authority, but that question was not asked here and is not before us.
Hood v. United Services Automobile Association (Lawyers Weekly No. 012-002-23, 6 pp.) (Per Curiam) Appealed from Jasper County Circuit Court (Kristi Curtis, J.) Eric Marc Poulin, Angeline Larrivee, Roy Willey and Alexis Wimberly McCumber for appellant; Robert William Whelan for respondent. S.C. App. Unpub.