CRISCI V. SECURITY INSURANCE CO.
66 Cal. 2d 425, 58 Cal. Rptr. 13, 426 P.2d 173 (1967)
NATURE OF THE CASE: Security (D) appealed from a judgment awarding damages to Crisci (P)
including damages for P's pain and suffering, because D failed to settle a claim which
resulted in a judgment that exceeded policy limits.
FACTS: DiMare was a tenant in an apartment building owned by Crisci (P). She fell when a
tread on a staircase gave away. She suffered physical injuries and developed a very severe
psychosis. DiMare sued P, claiming that P was negligent in inspecting and maintaining the
stairs. DiMare claimed that her mental condition was caused by the accident, and asked for
$400,000 as compensation for physical injuries, mental injuries, and medical expenses. P had
$10,000 of insurance coverage under a policy issued by Security Insurance Co. (D). This
policy obligated D to defend the suit against P, and authorized D to make any settlement it
deemed expedient. D hired an experienced lawyer, who decided that P would lose a verdict of
at least $100,000 if the jury believed that the fall caused the psychosis. However, D still
rejected $9,000 and $10,000 settlement offers, offering DiMare only $3,000 for her physical
injuries and nothing for mental. The case went to trial, and the jury ruled for DiMare for
$101,000. D paid $10,000. P paid the rest, leaving P indigent, and causing a decline in
physical and mental health. P sued D for refusing to settle the claim. P received $91,000
for D's refusal to settle and $25,000 for mental suffering. D appealed, claiming that P
could not recover unless P proved that D's refusal to settle was based on dishonesty, fraud,
or concealment.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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