
    UKULELE SEUMALO, Plaintiff v. AMERICAN INTERNATIONAL UNDERWRITERS, Defendant
    High Court of American Samoa Trial Division
    CA No. 038-85
    July 23, 1985
    Before GARDNER, Chief Justice.
    Counsel: For the Plaintiff, William Reardon
    For the Defendant, Roy J.D. Hall, Jr.
   On June 1, 1983 Plaintiff had a public liability insuranc policy with Defendant. This policy had a $10,000 limitation. 0 that date Plaintiff had an accident with Nicholas Leoso -in whic Leoso suffered substantial bodily injuries.

Plaintiff contends he reported the matter to Defendan immediately. However, this ' testimony is suspect since hi written accident report to Defendant was dated September 12, 198 which was shortly after Defendant had been alerted to this clai by a letter from Leoso’s attorney dated September 8, 1983 we fin that Plaintiff did not report this matter promptly. His hand aren’t entirely clean.

On September 12, 1983 Defendant responded to the Leos letter with a request for police and medical reports. Counse responded promptly, Samoan time, (six months later) with a polic report, medical consent and an offer to negotiate.

Then, on March 27, 1984 Leoso’s counsel offered to settl for the policy limits--$10,000--the offer to be good for 30 days On March 28, 1985 Defendant acknowledged the demand an apparently forwarded the file to the head office in Sydney. B letter of April 3, 1984 (delivered April 23, 1984 --- speed postal service, Samoan style) the claims manager gave Defendan "the policy limit with which to negotiate" but in view o Defendant’s "tough negotiating practices" he expected settlemen 'at a substantially reduced figure." On April 19, 1984 Leoso’s :ounsel extended the time to settle for the policy limits 21 lays. There was no response. On May 23, 1984 Leoso filed suit, 'he trial court gave judgment for $12,000 in October 1984, the tppellate court double this award. Plaintiff now owes $15,000- on she judgment.

Every insurance contract contains an implied covenant or jood faith and fair dealing. Communale v. Traders and General Insurance Co., 50 Cal. 2d 654, 328 P.2d 198. This includes a luty to effect reasonable settlement of a claim against the .nsured within its policy limits when there is a substantial .ikelihood of recovery in excess of those limits. Upon breach of shat duty by the insurer, the insured has a right of action igainst the insurer for damages proximately caused thereby. Northwestern Mut. Ins. Co. v. Farmers Ins. Co., 76 Cal. App. 3d 03. 143 Cal. Rptr. 415 (Gardner, P.J., concurring).

Here, once counsel got into the case Plaintiff was advised >f. his right to secure counsel and at trial (Oct. 1984.) and >ffer was made to settle for the full policy limit. This came a .ittle late. Almost six months earlier the time to accept the sffer had run out.

The local manager of Defendant company had evaluated the jase as a policy limit case. So had the claims manager at the lome office. With clear liability and serious injuries there was i substantial likelihood of recovery in excess of the $10,000 Limit. Of course Defendant wanted to bargain but it could not do so at plaintiff’s expense. It knew it was on the hook for |>10,000 (which eventually went for $25,000) so it lost nothing by stalling. It did and it cost Plaintiff $15,000. This, Defendant uould have avoided by settling. They took a chance and lost.

Defendant’s story that it tried unsuccessfully to contact Plaintiff falls a little flat. All they had to do was pick up she telephone. He is listed. He has been in business for several years.

Plaintiff did not receive the fair treatment his Insurance Company owed him. However, the facts of this case afford no jasis for an award of damages for emotional distress nor of punitive damages.

Judgment is for $15,000 plus interest.  