Merritt v. Reserve Insurance Co.

110 Cal. Rptr 511 (1973)

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Merritt v. Reserve Insurance Co.

California Court of Appeal
110 Cal. Rptr 511 (1973)

Facts

Dewey Merritt (plaintiff) was driving a truck owned by Sterling Transit when the truck collided with the rear of a truck owned by Stafford Company (Stafford). Stafford was insured by Reserve Insurance Company (Reserve) (defendant). Merritt brought suit against Stafford for his injuries. Stafford presented the action to Reserve, which refused to cover the amounts in excess of Stafford’s policy coverage and assigned Stafford legal counsel for the defense action. The decision was affirmed on appeal. Merritt was paid only a portion of his personal-injury award, and he filed another suit against Reserve for bad faith. Testimony suggested that the potential liability assigned to Stafford was miscalculated. The jury found in favor of Merritt. The lower court found in favor of Merritt. Reserve appealed.

Rule of Law

Issue

Holding and Reasoning (Fleming, J.)

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