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Case Citation
Legal Case Name

Contreras v. US SEC. Ins. Co. Case Brief

District Court of Appeal of Florida2006Docket #1765359
927 So. 2d 16 2006 WL 708567 Insurance Law Torts

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: An insurer refused to settle a claim against its vehicle-owner insured because the claimant would not also release the co-insured driver. The court held this refusal could constitute bad faith, as the duty to protect the owner from an excess judgment may require accepting a partial settlement.

Legal Significance: An insurer’s good faith duty may require it to accept a reasonable settlement offer for one insured, even if the claimant refuses to release a co-insured, after the insurer has exhausted its ability to obtain a global release.

Contreras v. US SEC. Ins. Co. Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Arnold Dale, driving a car owned by Deana Dessanti with her permission, struck and killed Flor Osterman. Dale was intoxicated and fled the scene. Dessanti’s vehicle was insured by U.S. Security Insurance Company (U.S. Security), making both Dessanti (owner) and Dale (permissive user) insureds under the policy. The victim’s estate, represented by Carmen Contreras, offered to settle with Dessanti for the $10,000 policy limit. U.S. Security tendered the limits but conditioned the payment on a release of both Dessanti and Dale. Contreras rejected this counteroffer, reiterating the offer to release only Dessanti and U.S. Security, as the estate was unwilling to release Dale due to the egregious nature of his conduct. U.S. Security refused to settle for Dessanti alone, arguing it had a good faith duty to both insureds and could not settle for one without the other. After the offer expired, a wrongful death suit resulted in a $1,000,000 judgment against both Dessanti and Dale. Dessanti subsequently filed for bankruptcy, and her trustee assigned her bad faith claim against U.S. Security to Contreras. The trial court granted a directed verdict for U.S. Security, finding the insurer was placed in an impossible “Hobson’s choice.”

Court Holding & Legal Precedent

Issue: Can an insurer be held liable for bad faith when it refuses a reasonable settlement offer that would release one insured because the claimant is unwilling to release a co-insured?

Yes. The court reversed the directed verdict in favor of the insurer. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est labo

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IRAC Legal Analysis

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Legal Issue

Can an insurer be held liable for bad faith when it refuses a reasonable settlement offer that would release one insured because the claimant is unwilling to release a co-insured?

Conclusion

This case clarifies that in a multiple-insured scenario, an insurer cannot use Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis no

Legal Rule

An insurer's good faith duty obligates it to settle a claim when, Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat

Legal Analysis

The court rejected the trial court's "Hobson's choice" rationale, clarifying that the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit ame

Flash-to-Full Case Opinions

Flash Summary

  • An insurer can be liable for bad faith for refusing to
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nu

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