Werlinger v. Warner

¶1 When a defendant whose liability insurer has acted in bad faith proceeds to make his own settlement with an injured plaintiff, the amount of that settlement may become the presumptive measure of damage in the bad faith lawsuit, but only if a trial court determines that the settlement is reasonable. In this case, a defendant insured with limits of $25,000 obtained a discharge in bankruptcy for his liability for a terrible automobile accident, and then confessed judgment for $5 million as part of a settlement that assigned his bad faith claim to the injured plaintiff. The court found the $5…