King v. Automobile Underwriters, Inc.

187 A.2d 584, 409 Pa. 608, 1963 Pa. LEXIS 717

• Court: Supreme Court of Pennsylvania
• Decided: January 21, 1963
• Docket: Appeal, 52
• Status: Published

Opinions

Opinion

Per Curiam,

Appellant-insured brought this action of assumpsit seeking recovery from appellee-insurer for (1) willful breach of its duty to defend and (2) willful breach of its obligation to settle.

A failure without cause by an insurer to defend— whether willful or not — gives rise to a cause of action. See Cadwallader v. New Amsterdam Cas. Co., 396 Pa. 582, 152 A. 2d 484 (1959). The measure of recovery for breach of this obligation is the cost of hiring substitute counsel and other costs of the defense. The parties have stipulated that appellee is liable for $2,316.25, the amount expended by appellant in hiring substitute counsel and otherwise defending the suit brought against him by the injured party. Hence, appellee has compensated appellant for breach of its duty to defend.

As for the alleged willful refusal to settle, the court below resolving conflicting testimony specifically found that there was no opportunity and therefore no refusal to settle by appellee. Since this finding is amply supported by the record, we are not called upon in this case to re-examine the nature of the insurer’s obligation in this regard.

Judgment affirmed.